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“Peter possesses a keen sense and insight for turning telecom services and products into customers and dollars. He is passionate about this industry, his work and the people he serves. Visit his site, read his blog and sign up for his newsletter at marketingideaguy.com and you will discover what makes Peter a sought after marketing consultant.”

Cynthia de Lorenzi, CEO, Patriot Computer Group
A Lesson From Netflix for You
On Rad's Radar
Sunday, 04 December 2011 08:38
Netflix lost 800K customers last quarter. In this article, Netflix explains that it made some errors in communication and branding. Netflix did a poor job of communicating the price increase to its customers. It did a poor job of explaining its value proposition as well. I would suggest that many companies in our space have similar issues with customer communication, especially of the value prop.

One thing that came out of this situation for Netflix is that they raised their rates; hence, raising revenue even with almost 1 million customers left. One way to increase revenue is to raise your rates. One thing that companies fear is that if they raise prices they will lose customers. So what? Even losing 800K out of 24M, Netflix gained a big revenue jump.

One thing I try to stress is that it isn't really about how many customers you have, it is how many profitable customers you have!

Ask Kodak. In its fade to black, Kodak in 2001 lost $60 per camera sold. Many companies try to break even on hardware to make huge margin on consumables (like Xbox, printers, cameras, etc.).   

In the move to managed services, carriers are realizing that customer interaction is very important. We don't know how this will scale, but I do think that the company that is most effective at delivering these services, especially ironclad security, will ultimately command the most customers and ARPU. At the end of the day it is about value that translates into ARPU (average revenue per customer) for any company. That value needs to be communicated effectively and clearly. Some of that is called Branding. 

 
Read more... [A Lesson From Netflix for You]
 
Letter to EMS Financial Customers
On Rad's Radar
Sunday, 04 December 2011 08:25
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From: EMS Financial Services [mailto: This e-mail address is being protected from spambots. You need JavaScript enabled to view it ]

Sent: December-03-11 6:17 PM

Dear EMS Customers and Friends,

You are undoubtedly aware of the difficult situation EMS finds itself in. However you may or may not be aware that a forensic examination of EMS accounts has revealed evidence that the Original Founder, Principal and Managing Member of EMS, Mr. James Nicholson, has misappropriated and mismanaged substantial amounts of EMS funds, having sole and complete access and control of all financial banking throughout the period.

Upon the company becoming aware of these matters that were created by Mr. Nicholson, he resigned from his position on September 9, 2011.

The remaining EMS employees proceeded with full corporate due diligence, while commencing negotiations with various interested parties to secure the liquidity in order to honor all deposits. We have used all efforts and resources to work with any and all potential investment groups around the world.

We are saddened to advise that we have no further resources or opportunities available to restore or correct the actions and mismanagement that have occurred, and are forced to cease operations.

The team has been and is in communication with the legal and governmental authorities in order to further pursue all matters related, and would expect them to continue their investigation into the matter.

We profusely apologize for this situation, and we will continue to the best of our abilities to keep you informed of any further developments.

The EMS Staff

Best regards,

Ems Financial Services
Read more... [Letter to EMS Financial Customers]
 
Well That Was Unsatisfying
On Rad's Radar
Friday, 02 December 2011 06:47

Tuesday night was kind of the last straw. While watching CinemaNow through my LG Blu-Ray player, the movie - 30 Minutes or Less - must have stopped to buffer 10 times and actually stopped 3 times - in 90 minutes!

I called my ISP, BHN of Tampa Bay, which is always interesting. First, they remotely re-boot the modem. Then you call back if that didn't fix anything. Then they make you do a speed test from their local site, which showed 8 MB x 0.8 MB. As I explained to tech support, that test doesn't mean anything except that last mile is good. I'm testing from Tampa servers that are On-Net! Then I tested with the FCC speed test site and DSL Reports test, which all gave different answers. Natch.

So the tech sets an appointment for today. "Maybe it's the modem." The tech shows up, looks at the modem and my router, and has me run a speed test from BHN. It comes back at almost 10MB x 1MB. "We're good here," he says and starts to leave. "What?!" I said. "I'm just the middle man here. The test shows you are getting your speed." with that he left.

The speed test only tests last mile - the controlled loop that is On-Net. The Internet is off net! My issues are that I have congestion to most streaming sites, which means that BHN network management is pretty poor. I don't know if they peer with YouTube or Level3 or Limelight or if they purchase transit from Level3, but that pipe is maxed out.

I get a mailer from VZ thrice a week to move to FiOS.

fios-ad-2011.jpg

I pay $141 for triple-play plus an extra IP and the HD DVR. Granted the VZ price will be over $100 with fees, but I will get the NFL Network just in time (BHN doesn't carry it) and maybe an a better Internet experience. Who knows? The downside is that it will take VZ two days, a lot of holes in my walls and 4 pieces of equipment to install it.

Without a bundle, like buying DirecTV and Internet separate, the consumer gets raped. Way more than $100 per month.

I don't mind paying the money --- just give me what I pay for! BHN in 2 years has replaced the set-top box twice and visited 3 other times now. That's expensive for BHN and no fun for me. BHN didn't even try to upsell me to wideband or lightning or anything.

Anyway!

Today, VZW announced that it will buy SpectrumCo.'s 122 advanced wireless services (AWS) spectrum licenses, covering 259 million users, for $3.6 Billion. SpectrumCo. is a joint venture between Comcast Corporation, Time Warner Cable, and Bright House Networks. This deal needs FCC approval.

Does this mean that cable is giving up on 4G? No. According to the BizJournal, the cablecos will become authorized agents to sell VZW products -- and at a future date become wholesale customers (MVNO).

FYI, ISP's are going about data caps the wrong way. Nice article.
Read more... [Well That Was Unsatisfying]
 
Cell Phones Offer No Privacy
On Rad's Radar
Wednesday, 30 November 2011 11:09

Beyond the fact that radio frequencies can be listened to with Radio Shack parts - I'm not even talking NSA spycraft here - two reports out this week show that malware is present and accounted for on cell phones. Awesome, right? I mean, how long did that even take?

One article details how the IEEE has found that as many as 2000 free smartphone apps carry malware. Who says free is good?

Smartphones are a gateway to corporate information, email, data on applications, passwords and more.This is one more issue that corporate IT has to deal with.

Last week, an Android developer named Trevor Eckhart revealed that Carrier IQ had installed a rootkit on smartphones that logs user keystrokes. "The new video Eckhart released, however, shows that the software also reports the content of text messages and even logs encrypted web searches," reports TJS. There is no way to turn the software off either.

"If this flap doesn't make people wake-up to the need for better privacy laws regarding what information tech companies can collect without user permission, we're not sure what will."
Read more... [Cell Phones Offer No Privacy]
 
A Bad Day for AT&T
On Rad's Radar
Wednesday, 30 November 2011 09:36

The FCC released its order today declaring that the AT&T-T-Mobile merger was not good for consumer, public good or competition. And AT&T was not pleased that the FCC released the Staff Analysis - all 157 pages of it.

AT&T probably didn't like Commissioner Copps blasting them for wasting serious staff hours and expense analyzing this transaction over the last 7 months.

The findings - in summary - are as follows:

The big 1: this merger would put control of cellular - 75% - in the hands of 2 carriers.

There are "substantial and material" questions about its competitive effects on roaming, wholesale, and resale services, backhaul, and handsets.

It would likely NOT produce jobs, despite AT&T claims. (When has a merger resulted in job creation? How about some perjury charges for these claims!)

"Here is something else worth highlighting: T-Mobile has built a business model targeting budget-conscious consumers. "With lower-income consumers increasingly thinking of mobile as their only broadband service, and with no guarantee the new entity will continue to serve this population, many consumers may find themselves priced right out of broadband. That is not a direction the country can afford to go."

While AT&T claimed that it couldn't build out its LTE network, documents and Congressional testimony refuted that claim. One document leaked online said that AT&T could build it all out for $4B - one-tenth the price of the merger.

As VB points out, every claim made was refuted.

Now starting tomorrow the rumors will fly about Sprint buying T-Mobile or some such bull. And there will be speculation about what happens to T-Mobile now. Well, T gets a $4B break up fee from T, so it could give $4B and AWS spectrum to Clearwire or Lightsquared or DISH to build out an LTE network that T could use. Or it could merge with Leap or MetroPCS or Cricket or US Cellular or DISH. Endless speculation to follow.
Read more... [A Bad Day for AT&T]
 
The Cellular Battle
On Rad's Radar
Monday, 28 November 2011 08:56

I don't mean the AT&T-T-Mobile merger, although that is just one battle in the war for cellular supremacy. (Other battles are Sprint with Clearwire, Sprint with the cablecos and the MVNO model.)

"Former T-Mobile CMO Denny Post says carriers should focus on retention, rather than relentless promotions aimed at new sign-ups." Post says that it is the end of the New-to-Wireless Customer Era and that cellcos must re-think customer care.

Post continues, "It is going to become an absolute competitive scrap battle, [because] any customer is going to have to come from somewhere else."

This isn't just the cellular market. Look at broadband, landlines, cable TV, voice - all flat.

While VoIP revenues are increasing, it is because TDM revenue is decreasing. Hosted UC or Hosted PBX sales are more than voice sales, but functionality, productivity, efficiency, collaboration and one-inbox. (At least, in my humble opinion).

And while the FCC has a $4B fund to get more broadband deployed, those sales will go to the first network operator that provides it IF the price is right. Although even in rural, it is a battle between satellite, local wi-fi, dial-up, and 3G/4G data cards - which isn't exactly a slam dunk customer acquisition market. Everywhere else, it is

The nice thing is that Channel churn numbers are better than direct sales. Now if the Channel could just cross-sell and upsell better....
Read more... [The Cellular Battle]
 
L3 Sells Coal Mine
On Rad's Radar
Monday, 28 November 2011 07:50
Not many people knew that Level3 owned a coal mining operation. It was sold off last week. I do not know if L3 still owns the software integration business. (I can't find any indications in the earnings reports.)

According to the earnings, it looks like L3 is bringing less than $4B in revenue at $927M in 3Q2011 and $913M in 2Q2011. L3 closed its acquisition of Global Crossing on October 4, 2011. L3 refinanced approximately $1.36 Billion of GC debt. GC also had notes for $430M, $750M and $150M (at 9% and 12%). It was a $3B transaction that was supposed to have just $1.1B in debt attached. Looks like more. VentureBeat wrote, "Both companies are losing money. Level 3 lost $622 million last year and has been unprofitable since 1998. Global Crossing lost $172 million in 2010 and last turned an annual profit in 2003."

Most of the L3 revenue is wholesale business like being the back office for most of the VoIP Providers out there - directly and indirectly through resellers. L3 says that very little - maybe 1% of total revenue - comes in from the Channel, which is likely since, again, most of the revenue is in wholesale, which the channel doesn't sell. L3 is hoping the channel will sell some CDN, Vyvx Broadcast and website optimization services. Meanwhile, also selling big bandwidth, transport and voice.

By its own numbers, L3 should be doing better. It has 27,000 metro route miles with 100K enterprise buildings within 500 feet of its fiber. It has over 200 data center facilities with over 2 million square feet of space. It has a unique video broadcast platform and optimization services (Vyvx, CDN and similar offerings). Combined it should be doing more revenue, but some of it is commoditization and price pressure. Some of it is the reputation it garnered during the last round of acquisition integration. L3 is certainly a good alternative to the RBOC's, when it has fiber in the area.

 
Read more... [L3 Sells Coal Mine]
 
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