Today is a proud moment for Yankee Group—one that validates our company’s influence on a national scale. David Vorhaus, a senior analyst here at Yankee Group, is taking a leave of absence to join the National Broadband Task Force at the FCC. The mission of the task force is to research and write the National Broadband Plan, which defines how broadband will be adopted across the country, to establish benchmarks for the plan and to help inform how broadband stimulus dollars should be invested.
It’s no surprise that a Yankee Group analyst has been tapped for such an important post. Yankee Group’s depth of expertise on broadband and regulatory issues is unmatched in the industry, and in addition to David, several other Yankee Group analysts—including Dianne Northfield, Vince Vittore and Benoît Felten—have devoted numerous reports, webinars, podcasts and client projects to the topic throughout the year.
It’s clear that Yankee Group has our finger on the pulse of broadband reform. Not only has David been tapped for this prestigious post, but our open letter to President Obama—sent during Obama’s first week in office—has also garnered results. The letter addressed a number of broadband-related issues, including the need to recommit to building a public safety broadband network and fund the USDA’s Rural Utilities Service (RUS) broadband program. Yankee Group received feedback from Michael Copps, the acting commissioner of the FCC, and our suggestion about funding the RUS has been incorporated into the federal stimulus package. And Yankee Group continues to influence the larger broadband discussion, as our own Benoît Felten was recently invited to present on fiber to the home (FTTH) at the FCC.
It’s an exciting and natural step that one of our very own was invited to step up to the national stage. Please join me in congratulating David.
I found myself stuck in one of the all-too-common, huge traffic snarls on my way for a client meeting in Mumbai, India and wondered if professionals in that city and in India, overall, could telecommute and do their bit to prevent traffic congestion and make a dent in the air pollution. In conversations with friends and colleagues I was surprised to learn that telecommuting was not practical in Mumbai and Bangalore, one reason being that reliable high speed broadband connections are still not available at a reasonable price. As someone explained to me, the practical definition of broadband in major cities in India today is a “sometimes on” connection with speeds ranging from 64-256 Kbps. Though national policies have been defined to provide for an ”always-on” connection with minimum speed of 256 Kbps, adherence to that policy is a different, seemingly unrelated issue.
It is evident that consumers would tolerate any speed when given a choice between no broadband and some broadband! Broadband adoption stands in contrast to the huge strides made in introducing mobile phones to a large middle class population. Setting aside the fact that broadband penetration as of June 2008 had only reached 4.38 million subscriptions (less than 1 percent of the population) according to the Telecommunications Regulatory Authority of India (TRAI), I wanted to highlight the challenges faced by this small percentage of the population that has broadband:
·Frequent Downtimes: Most ISPs have higher downtimes compared to mature economies, which occur due to a variety of reasons such as power outages, cable faults etc. The downtimes vary from a few hours to a couple of days in a month.
·Cap on usage: This is almost an unwritten rule followed by Indian ISPs where heavy users are capped either by data limits (as low as 400 MB to 1-2GB per month). Traffic-shaping is applied to links experiencing congestion during high-usage times of day. when a certain limit is crossed. Some ISPs like BSNL and Bharti offer unlimited downloads for an extra fee and have also introduced high speed BB packages.
Sadly, in India broadband adoption has not lived up to the promise from a few years ago. The absence of a wider base of users and the lack of active promotion of content creation in areas such as education, agriculture, health care, and e- governance in regional languages make it all the more difficult for benefits of connectivity to be shared amongst everyone. It is unlikely this situation will change dramatically if the “rationing” mindset that limits data downloads is not replaced by a more progressive outlook that can take advantage of a middle class willing to pay for reliable high speed broadband access. Yankee Group believes that while the widespread adoption of broadband is critical in supporting social and economic prosperity in India, it is also as important to deliver high speed broadband reliably to customers that have it today.
How many customers does it take to matter in the world of wireless infrastructure? Well, if you are trying to partner with customers on the product roadmap for an important technology, maybe one is enough. And if it’s one of the biggest operators in the world, even better. So Mary Chan, president of Alcatel-Lucent’s 4G/LTE group is excited to have won the Verizon deal. It has given them a real goal to execute on this ambitious transformation for the industry.
Most operators would prefer to work with one partner who can share the risk and reward of a multi year technology roll out. ALU is betting on that as it rolls out its wireless LTE plans. The desire to be seen as an end to end player in this technology space is a differentiating factor for ALU as highlighted in the diagram below.
I spoke to Mary Chan earlier this week and here is what I learnt about their wireless/LTE plans:
Create one organization within Alcatel Lucent to provide end to end service on the wireless LTE technologies.
Leverage its strength in IP wireline products and technology and bring it to bear for the IP mobility solutions and achieve scale. Focus on adding policy management, mobility management features to the Evolved Packet Core (EPC) architecture.
Go it alone and not co-develop the RAN aspects of the architecture with NEC.
Launched the ngConnect program last month to allow partners to develop applications on the LTE technology platform.
The streamlined organization structure within ALU creates a point of differentiation for them. My belief is that this was one of the reasons for Verizon choosing to partner with ALU. Given that LTE is the next big wave in infrastructure spending, it is a crucial win for ALU to remain competitive.
Although there is a risk of sending mixed messages by not partnering with NEC on the core Radio Access Network (RAN) architecture and yet being open to partnerships under the ngConnect umbrella, it makes business sense. ALU is focusing on what they are known for- solid proven engineering of the wireline and wireless products and solutions. It demonstrates the ability to focus on their strengths and change what was not working that well in the first place.
They must pay careful attention to managing this “open’ eco system to truly encourage greater innovation and creativity rather than apply a heavy hand in the management of the program.
One customer win is a solid start to make the LTE possibilities real. I am looking forward to hearing more details of their wireless LTE strategy as CTIA concludes this week.
It has been a little more than a month since Satyam’s founder, B. Ramalinga Raju declared he falsified profits for years and had inflated Satyam’s balance sheet by more than one billion dollars, leaving the company struggling for survival.
Being one of those that has watched India’s progress in the IT space with a sense of pride, this shocking news filled me with a sense of being let down. The awesome progress India has made in the last few years with IT services leading the way has opened my horizons as well; so I do feel a part of all the good things it stands for. It also had remarkable success adopting the Anywhere revolution with millions of subscribers still joining communication network every month proving that ubiquitous connectivity can have deep and wide economic and social impacts.
One of the downsides of the flat world is that greed is global too and does not make any distinction of geography.Excessive greed and the lack of comprehensive oversight can spell disaster in emerging as well as mature economies. However, the silver lining is that it seems this racket was conducted by one corrupt individual (happened to be the CEO) and his cronies. It certainly has impacted Satyam, but by and large the international business community has had a measured response. Hewitt associates reports that over 60% of the companies in that region are still hiring and seeing modest growth as well. Satyam could be doing much worse so the talk of a strategic buyer to infuse the much needed capital into the company and the few new deals coming into the door must be relief to the rank and file who work there.
Drawing on a theme from President Obama’s chief of staff that a crisis cannot be wasted, India Inc. should seize this opportunity to send a clear message that it will reform the laws as necessary, provide a transparency and set the benchmark for corporate governance. In the coming months, we must see that the rule of law prevails and an example is made out of these white collar thugs- there is a price to pay for breaking the law, in India, despite one’s personal wealth and political clout. This will be tough to do, especially in an election season.
The business world is watching more than ever before to see if India Inc. handles the crisis with decisiveness and openess. It will certainly influence their investment decisions in the years to come.
The communication industry is anxious to go through the details of the stimulus package to find some things to cheer for all. All of us at Yankee Group, including our expert on regulatory issues, Dianne Northfield, and I have been watching the developments with great interest. We feel the administration needs to do more to advance the nation towards ubiquitous connectivity—what we call “Anywhere”—with the unification of wired and mobile broadband networks to create new capabilities for citizens, businesses and governments alike.
Ultimately, we feel that the economic stimulus package will have minimal impact on extending broadband access in the U.S. because it lacks the backing of a national broadband policy (NBP).
The U.S. is one of the few nations around the world that has failed to embrace a national broadband vision and strategy. A national multiyear broadband policy must be articulated, made easily accessible to the public, and must strike a balance between outlining objectives, priorities and tangible outcomes. Read the rest of this entry »
3.5 B Euros of revenue in Q3 of 2008 and a merger that has been executed better than the some of their peers in the industry. My observations from the NSN event at Barcelona held a couple of weeks ago.
The Good
The elements to be a successful end-to-end network builder that can build,operate and run networks exist. Their product portfolio ranges from good core network component technologies, solid radio access products such as the Flexi base station platform that provides software based upgrade options to LTE from HSPA+, the billing and OSS software products and the managed services unit which has won some significant business across the world.
Every executive I spoke to consistently talked about NSN helping operators define a better customer experience which is evidence of alignment within the company.
Ubiquitous connectivity. Broadband everywhere. As Mika Vehviläinen, the COO explained the NSN vision to us, it felt like an internal Yankee Group meeting talking about making the Anywhere vision real for our customers. I did follow up with the NSN leaders and they agree that the Anywhere vision will be seen as table stakes in the communication world within the next decade.
An expanded focus on software under the leadership of Mike Mathews, the new head of strategy, to enhance the company vision in the coming months.
The Bad
NSN executives admitted that though they were present in Americas, a much better job needs to be done to present their value proposition.
The economic environment has taken a toll on all network vendors including NSN, as revealed by their financial statements. It will be a very tough year for network builders to win new business in this economic climate as described in a Yankee group report “It’s the Economy, Stupid: Yankee Group’s 2009 Predictions” published last week.
In order to make the vision a reality, NSN will have to demonstrate that an engineering company understands the end customer experience (consumers and enterprises) and that it can think and act like a B2P (Business to People) company it aspires to be. I personally believe that enhanced customer experience at all touch points will be a differentiator for the service provider since I worked for one in the past that executed successfully on providing the ICE (ideal customer experience). However, this is an old story which is often paid lipservice to – we will see how NSN executes on this concept.
The Ugly
The NSN analyst event was held at the Nokia world event and clearly it was far away from the limelight. The Nokia keynotes did not mention NSN’s role in building and powering the network and connecting people which is Nokia’s mission.
I left unconvinced that NSN was leveraging the Nokia’s experience with end consumers to the extent possible, especially since the NSN vision is about enabling a rich customer experience. Clearly it is tough to integrate a consumer oriented culture at Nokia with the engineering mindset at NSN. We shall find out.
p.s: The post got delayed due to my move to Boston the week following the event. Apologies.
The current economic turmoil has many service providers, vendors and other enterprises asking themselves what’s to come. How will failing credit, jeopardized revenue and spending reductions impact the telecommunications landscape and affect the Anywhere revolution, a global transformation toward ubiquitous connectivity? What critical decisions must be made for 2009? How can your company come out on top?
Last week, Zeus Kerravala, Declan Lonergan and I hosted a webinar to discuss Yankee Group’s predictions for 2009, looking at the Anywhere Network, Consumers and Enterprises. Check out the replay to hear:
How the inevitable demand for ubiquitous connectivity – via broadband and wireless – will shape the industry in 2009
Predictions of the expected impact of a struggling economy on the telecommunications industry.
The winners and losers of 2009.
Recommendations for Service Providers, Vendors and Enterprises
The webinar runs about an hour: audio (mp3) and slides (pdf).
There are 1000+ mobile devices — and still counting — a proliferation which enriches the lives of consumers in ways unforeseen just a few years ago. The cell phone has evolved from providing simple voice features to being an essential part of the consumer’s connectedness to the world. Today’s mobile devices have also driven enormous market activity and innovation as new ecosystems and new players emerge.
We’ve all shared stories about feeling more lost without our cell phones than without our wallets. As Yankee Group views it, the role of low-cost devices will enable the Anywhere connectivity revolution to touch twice as many people as the PC revolution reached in the past 20 years. Our research focuses on the devices and trends that are transforming how people access and interact with the Anywhere Network.
Today, the evolution of mobile devices is one of the most interesting and rapidly changing domains in the Anywhere economy as the inherent nature of mobility demands a unique mix of new services, applications, technologies and user interfaces. These devices will rapidly get smarter and we will see new winners and losers.
I am very pleased to share with you that Andy Castonguay, Yankee Group Director of Research, is now leading our investigations of this intersection of experience and electronics, replacing John Jackson who has decided to leave Yankee Group to pursue other opportunities. Well recognized in the industry and a long-time member of the Yankee Group team, Andy brings a unique perspective to our research on Access Devices that helps our clients understand the role of the mobile consumer device in a larger context. He will study how the interplay between consumer attitudes, behaviors and readiness and network technologies powers the development and adoption of new services, business models and ecosystems.
