Category Archives: Telecommunications

Competitive Edge of Small Carrier

VoIP Peels the Apple

The Internet phone calling capability that we know as VoIP has already taken two quantum leaps forward this month in the names of iPod Touch and iPhone. These milestones further validate VoIP as the future of voice communications.

As most know, Apple has been able to grow its family of hot products through the help of others – independent “app” (application) developers. Now, through a new VoIP app offered by Sprint called the ZTE Peel, Apple’s iPod Touch has been given permission to act like its its big brother, the iPhone.  Functioning as an iPod Touch case, the Peel has a built-in 3G-to-WiFi hotspot, giving your iPod Touch the same calling capability as an iPhone and, at the same time, enabling your lap top (PC or Mac) to connect to the Web through it. And when compared to other major rate plans, the economics are reportedly great.

The Apple family made yet another stride this month in the VoIP app world, this one taking a long time to birth. Following over a year of issues on competitive feature duplication which included FCC involvement, Apple finally sanctioned the Google Voice app as one of its 300,000 apps available to iPhone users. Through this VoIP app, you can now make calls and send text messages through a phone number from Google. The Google number will be displayed by the receiving devices when phone calls or text messages are made. According to the New York Times, users will have access to “free text messages on their Google Voice phone number, and to voice mails that can be transcribed and emailed.” Additionally, the Times reports that the “service is especially beneficial to people who use the Google Voice service in a web browser, making it simple to bounce between a desktop and mobile phone, and have communications remain in the cloud.”  (NYT, “Apple Approves Google iPhone App,” Nov. 16, 2010).

Both of these moves by Apple point to the flexibility, interoperability and economics of VoIP in mobile consumer applications. They also reflect a dynamic that has been incubating for over a decade – mass market adoption of VoIP. And for the same reasons that VoIP benefits consumer applications, VoIP is working its way into business phone applications as well, particularly in hosted “cloud” services, once again reinforcing its long-touted promise.

Private Parts

Information is a powerful and valuable tool, especially to those who stand to profit from it. Imagine if Internet spies could access the websites you’ve visited, links that you’ve clicked on, things that you’ve purchased, and information you’ve shared. The fact is they already do! And chances are they’ll continue to reap more of your personal information over time, for which advertisers and other third parties are paying a premium.

One of the fastest growing businesses on the Internet is the business of spying on you, according to a recent study conducted by the Wall Street Journal. The study concluded that “Internet tracking technology is getting smarter and more intrusive” and  revealed “new tools that scan in real time what people are doing on a Web page, then instantly assess location, income, shopping interests and even medical conditions.” The study also found that “the nation’s top 50 websites on average installed 64 pieces of tracking technology on the computers of visitors, usually with no warning.”  (WSJ, “The Web’s New Goldmine,” July 30, 2010.) The reality is there is a huge value in following you around the Internet, wherever you go.

How do the Internet spies accomplish this? They install small files on your computer known as “cookies” when you visit a website – not necessarily with your knowledge. Through cookies, your Web activities are recorded, tracked, and cross-referenced with other data bases and programs. Although cookies have been around since the mid-90’s, most consumers have no idea of what they are, let alone of their power and utility.  In more recent times, other files and programs known as “beacons,” “Flash cookies” and “third party tracking” have also emerged and with a greater dimension of spy sophistication. And, here’s the clincher, these spy activities are not necessarily illegal. Courts have ruled that the simplest flavor of cookies is perfectly legal; they haven’t ruled yet on the more sophisticated Internet spy techniques.

In addition, the information that you place voluntarily on the Web is generally considered fair game for everyone – up to a point. We saw what happened last year with Facebook’s Beacon fiasco. Beacon, a new feature launched by Facebook in 2007, was an advertising system by which your activity on Facebook’s member sites may have been shared among your Facebook friends without your approval. A number of Facebook users came unglued when they learned about it. Once and other advocacy groups jumped on the bandwagon, it became headline news. As a result of a class action law suit, Beacon was shut down last year, and Facebook’s CEO publically apologized. But the fact remains, your “shared” information is readily accessible by others on the Web, and who knows how it’s being used?

Smart mobile phones, with all of their “apps,” are also disseminating personal  information via the Web unbeknown to its users. Do you know, for example, that if you post a picture on the Web with your iPhone, the picture’s GPS coordinates (where the picture was taken) are also provided? So the young teenage girl who posts a picture of herself at home plus a comment on Twitter that states, “My parents are out of town and I’m all alone at home,” just notified the Twitter world not only that she’s alone and at home but, through the picture, provided her address as well, assuming the picture was taken in her home. The ramifications of this one application are mind boggling for those who don’t know about it, which is the majority of people! And that’s just one example of thousands of iPhone apps.

Here’s the point – Personal information provided through the Web that is placed in the wrong hands can and will be exploited, on the one hand. On the other, the Internet still represents a free and open information exchange, unburdened by government regulation. The controversy over Internet privacy, which has been brewing for some time, is now gaining steam and will get serious attention over the next few weeks when the Federal Trade Commission and the Commerce Department square off on this matter. Commerce officials lean in the direction of the Internet’s self-regulation, whereby, according to the New York Times, “companies post their privacy policies online or consumers check a box agreeing to abide by them.” Trade commission officials, however, are for a stricter policy that requires a “do not track option” on a website. (New York Times, “Stage Set for Showdown on Online Privacy,” Nov. 10, 2010.)

Internet companies, federal regulators, the Obama administration, Congress and perhaps above all, consumers have a stake in the outcome of this privacy debate. Where do you stand?

Demystifying SIP

The telecom industry has a tendency to shoot itself in the foot. It seems that every time a revolutionary idea emerges, it’s given a technoid sort of name that confuses the general public. SIP is no different.

Everyone knows what an apple is. Not everyone knows that the apple belongs to the subfamily Maloideae of the family Rosaceae. Why? Because no one cares…there’s no practical reason or value in knowing. And besides, who remembers this scientific jargon?

Likewise, everyone knows what a phone call is. Most everyone now knows what the Internet is. Very few people know what SIP is. The fact is the telecom industry, once again, labeled a revolutionary Internet communications capability – SIP – an acronym (no shortage in the industry on these) that describes its technical function, not unlike T-1, MPLS, DTMF, SMDS…the list goes on forever. And once again, the telecom industry has managed to intimidate and confuse the very people who need what it has to offer!

So let’s demystify this SIP thing once and for all. SIP stands for session initiation protocol (bare with me…it gets easier), a signaling protocol used for controlling multimedia over the Internet. More recently it has become associated mostly with the protocol for Internet phone calling that we know as VoIP. SIP enables VoIP calls to be made by most new business phone systems that are connected to the Internet with a high speed facility – DSL, fiber optics, wireless, etc.  A “SIP trunk” refers to the call path from a business phone system over a broadband connection and through the Internet – an alternative way of providing phone calling rather than the standard landline. If a phone system is not SIP-enabled, phone calling is still made possible by placing a protocol converter between the phone system and the Internet connection.

One more thing – why use SIP? There a few major reasons:

  • Cost reduction – The savings over traditional phone lines can be huge!
  • Scalability – Easy to implement, program and use.
  • Universality – It speaks the language of the global Internet.
  • Receptivity – The future of communications will be SIP-driven.

SIP – It’s that simple…well, almost. There are more technical aspects to SIP, but these are the basics. But the fact remains – the concept should have been given a different, more creative name by the telecom industry that everyone understands. Telecom should probably emulate the creativity of, let’s say, the computer industry. After all,  everyone knows what an apple is, thanks to Steve Jobs.

Small Carrier, Big Value

Uncle Sam doesn’t like monopolies, theoretically. So in 1984, he broke up Ma Bell into small pieces after she became too big and too controlling over a century of operation. The result was seven regional “Baby Bells” plus AT&T. Uncle Sam, wanting more competition, also kicked the door open for new comers in the industry with the idea that more is better, and we witnessed long distance companies like MCI and Sprint become large corporations over night. In 1996, he was at it again by prying open the local exchange (dial tone service) to competition, which gave rise to a new breed of carrier – the CLEC (competitive local exchange carrier), like TCG and MFS. To keep the Baby Bells whole, Uncle Sam let them play in the long distance industry, and he let the cable companies play in all of it. Around the same time, wireless companies were building their cells throughout the US, exceeding all subscriber growth projections. Shortly, there were thousands of telecom companies in the US providing some type of voice, data or video service.

From then to now, many of these companies –  wireline and wireless, voice and data, including all of the Baby Bells and AT&T, have consolidated, resulting in the majority of the US telecom services market, once again, being controlled by a few, like Verizon and  AT&T. Ironically, all of these large mergers and acquisitions were sanctioned by yours truly – Uncle Sam. The regional, mid-size carriers have become virtually extinct, leaving mainly the smaller ones that have managed to survive. The telecom industry has come full circle and, no doubt, it’s healthier today than a quarter-century ago.

However, as much as size has worked to the competitive advantage of the industry giants, in many ways it has also encumbered them. With consolidations come large scale integration of systems and processes, employees and corporate cultures, networks and technologies, which can take many years and lots of resources to complete. At the same time, a faltering economy hasn’t helped them to keep stride with competitive pressures as well as the demands of an increasingly cost-conscious consumer and tech-savvy enterprise. In addition, the monolithic bureaucracies that have emerged to help structure these large organizations have also weighted them down. As we learned from the Ma Bell phenomenon, size and muscle come with a price, and it’s often the small  business and consumer that ultimately pay.

By contrast, many small carriers have not only survived the industry consolidations over the past several years but have thrived because of them. The sheer force of the large competition has compelled the small carrier to fine tune its internal and external strengths, cut costs and increase efficiencies, pay closer attention to the customer, enhance its value proposition and competitiveness, and ultimately capitalize on its smallness. And as Mark Twain once said, “It’s not the size of the dog in the fight but the size of the fight in the dog.”

The fact is there are many advantages in doing business with a small carrier. Below are the major ones:

  • Great Prices – Unburdened by huge overhead and capital requirements, the small carrier is usually able to offer the most competitive prices to its customers.
  • Highest Quality – This is, perhaps, the most misunderstood claim. After all, how can a small carrier offer the highest quality of service, equal to that of a capital-rich telecom giant? It’s simple: Small carriers buy “best-in-class” network services from the largest carriers on a wholesale basis and then resell them to businesses. In this way, the quality playing field is kept level.
  • Responsiveness –  With minimal departmental layers and red tape, the small carrier can usually address customer needs on a real time basis.
  • Flexibility & Customization – Smaller carriers are generally not shackled by systems or processes. How many times have you been told by a large telecom, “I’m sorry but the system won’t let me change this price.” Or “I can’t add that service feature because it’s not in the system.” Small carriers are more apt to customize prices or services or both.
  • Personal Touch – A small carrier often knows its customers on a first name basis. Doing business with a small carrier, therefore, takes on more of a personal dimension.

Like everything else, the telecom industry will continue to morph, and small carriers will need to adjust. With the proliferation of IP (internet protocol), new IP  network technology, now offered at affordable prices for small carriers, is making it easier than  ever before for a small carrier to differentiate itself with value added services, like those in unified communications, and be all-the-more competitive with the industry giants. For those of us with a few gray hairs who have been in the industry for awhile, it looks a little like 1984 all over again!

Speak English, Please

Customer Support Should Speak Simple EnglishAs Mark Twain once said, “The more you explain it, the more I don’t understand it.” A recent study shows that confusion and frustration caused by the language barrier still plague the customers of companies outsourcing their customer care centers outside of the USA.

It’s no secret that American companies continue to cut costs in the wake of the worst recession in US history. And for service intensive industries like telecommunications, outsourcing call center functions has been a major trend in cost containment, prevalent among even the industry giants.  Ironically, the customer is the one who has suffered the most for it.

According to CFI Group, a leading authority in customer satisfaction, the issue is significant: “In general, customer frustration with offshore centers yields poor scores across the board.” The grim reality is that CFI’s satisfaction index rating is 27% lower for customer experiences where the perceived location of the call center was outside the US. CFI reports, “Callers have a difficult time understanding offshore agents, which leads to an ineffective and inefficient process.”

In light of this study, the obvious question becomes, “Is outsourcing customer care to foreign companies a viable, long term cost cutting strategy – all things considered?”

Perhaps it’s still too early in its adoption phase to tell. The fact is that companies which have opted to outsource could actually be experiencing a negative net impact. While direct service costs may be reduced, the savings may be offset by loss of revenue from directly-related customer churn, as well as the impairment of good will, which eventually translates into loss of revenue. Furthermore, as statistics show that it’s normally easier and less costly to generate a dollar of revenue from an existing customer than from a new one, marketing to a less-than-satisfied customer base could lead to higher sales acquisition cost.

The good news, according to CSI, is that customer satisfaction with call centers in general has been trending steadily upwards in small increments in recent years. With that trend, it will be interesting to see if American companies will be able to justify to their stake holders, their customers included, the outsourcing of customer care to foreign companies.

What’s your opinion on this?