Some interesting things in the Comcast financials for 2Q 2015.

Resi ARPU: Total revenue per customer relationship +4.5% to $143 per month

69% of customers take at least 2 products; 37% take 3 products

69% of residential customers receive speeds of 50Mbps or greater

Voice revenue decline of 2.1% to $903MM with 11.3MM customers and penetration at 21%

Business Services revenue increased 20.4% to $1.2Bn for the Quarter! Almost a $5B B2B CLEC! Penetration at ~25% for small and less than 10% for mid-sized businesses.

Top 6 in Metro Ethernet ports in the US in 2014, after ATT, L3, VZ, C-Link and TWC.

Windstream reported revenue for 2Q 2015 this month. This is after the REIT spin-off, Communications Sales and Leasing Inc. (CS&L), which now trades on NASDAQ.

The numbers break down like this:

Total revenues were $1.4 billion for 2Q2015
Consumer service revenues were $314 million
ILEC small business revenues were $108 million
Carrier service revenues were $156 million
CLEC Small Business service revenues were $146 million
Enterprise service revenues were $485 million

Gary Kim has a comparison of WIND and Frontier (soon to own more VZ assets) from 2012. “At December 31, 2011, Frontier had 3,103,800 residential customers and 309,900 business customers. For the six-month period ending Dec. 31, 2011, Frontier earned $692 million in business customer revenue, and $544 million in consumer revenue.”

“For Windstream, results were even more pronounced. Business revenue in the fourth quarter of 2011 were $888 million, while consumer revenues were $118 million.” Compare that to 2015 where consumer revenue is now $314M (which represents 22.4% of revenue)! After buying RLECs, data centers, KDL fiber and a strategy for out of network CLEC business revenue.

Another RLEC that grew up for comparison: “Of $4.4 billion in CenturyLink second quarter 2015 revenue, business revenues represented $2.7 billion while consumer revenues were about $1.5 billion. In other words, the business segment represents 61 percent of company revenue,” writes Gary Kim.

“Frontier Communications total revenue of about $1.4 billion as well, with consumer revenue of about Total residential revenue was stable at $615 million for the second quarter of 2015, while total business revenue was $621 million. So a bit more than half of revenue was generated by business customers.” [Gary Kim again]

It is interesting how important low-margin consumer revenue is to the RLEC business model matrix.

Vonage is on a buying spree that started with Vocaolcity in 2013 for $130M ($105M in cash). Next it set its sights on the mid-market where it moved from Hosted PBX to UCaas via the Broadsoft platform. It grabbed up TeleSphere first for $114 million in cash and stock. Then it grabbed Simple Signal for $25M. This past week saw Vonage buy iCore for $92M.

In May of this year, Vonage bought gUnify, the middleware for BroadWorks to integrate with Google, Clio, Zendesk, Salesforce, etc. A quiet move that was mixed in with Q2 earnings noise.

“For the first quarter of 2015, Vonage reported revenue of $220 million compared to $221 million in the year ago quarter.” Yet “This is the Company’s first full quarter of results including Telesphere, a Vonage Company, which was acquired on December 15, 2014.” So revenue went down despite the acquisition?

“Vonage Business results include Vonage Business Solutions (“VBS”, Vocalocity) and Telesphere, and will include SimpleSignal in the second quarter. Revenue at Vonage Business was $42 million in the first quarter, a year-over-year increase of 49% on a pro-forma basis, as if the Company had owned Telesphere for all periods. Customer churn was 2.2%, an increase from 1.6% in the year ago period. Ending seats were 338,000, up from 196,000 seats at the end of the first quarter of 2014, reflecting strong organic growth and the addition of Telesphere.” [press release]

The consumer side had some losses – “Vonage’s Consumer business reported revenue of $178 million in the first quarter of 2015 compared to $202 million in the prior year period.” Business revenue – inorganic and organic – are barely keeping up with the consumer losses. And “Average revenue per line (“ARPU”) was $27.97, down from $28.54 in the year ago period.”

142K seats were added — no idea how many came from acquisition and how many were “organic”.

Some day – 2 years maybe – Vonage will be 75% Broadsoft shop selling B2B UCaaS with a minimal amount of consumer business, mainly from its mobile apps and international play.

PingTone was grabbed by Fusion last year. Globalinx got acquired by Birch. Take the big guys out – Sprint, VZ, XO, Comcast & the cablecos – and the Broadsoft customer base in the US is shrinking in number. No idea how that plays out, especially for the 275 smaller customers, who are now dwarfed by Birch, Vonage, Comcast and VZ.

It would be a good question to pose at Connections, BSFT’s annual customer executive forum. Likely, remember what happened to the M6 platform? That is likely the same answer. Three other factors: (1) BSFT is pushing its own white-label service; (2) its alignment with the Big Boys; best example being what it did for VZ; and (3) the BSFT tax is high. The maintenance fees or software licensing fees are higher for BSFT than any other platform. What happens when it has to live off just those fees because no one is dropping $1M for a new softswitch?

On examination of the members of the Cloud Comm Alliance, new members are coming from Europe. Old members are changing logos and hanging new signs.

Just something to ponder.

Do you have an employee on-boarding process? Here is the Amazon one from a BI article.

It” is called “New Hire Orientation”, or NHO. At Microsoft (referencing my personal experience), this is called “New Employee Orientation, or NEO. Every company has one, and they call it something. Here’s what happens at ours, precisely:”

New employees get a good breakfast (fruits, pastries, cereal, that kind of thing)
They immediately get a laptop and backpack
They get a “Welcome to Amazon” introduction
They fill out benefits paperwork
They learn a bit about the company, including our leadership principles
They hear a story about how important our customers are, as “Customer Obsession” is widely known to be our first and foremost leadership principle
They hear from a guest speaker about their experience at Amazon
They get their badge picture taken, and receive their badge
At the end, the employee’s Manager is waiting for them to welcome them to Amazon, and the new employees get taken out to lunch

“This happens from 8 AM – 12:15 PM, or 9 AM – 1:15 PM. Anyone else know of any other company that has a somewhat similar process for new employees?” from Business Insider

I hope you also have a client on-boarding process.

So AT&T calls customer to tell them to get off the copper. Migrate to VoIP. As if it were that easy.

SIP trunks typically do not play well with fax. AT&T and Level3 do not recommend their SIP trunks with faxes.

Enter the efax services. However, if a healthcare office is going to go efax, there are HIPAA compliance issues. With some fax services, it is store and forward, so how is the data stored? Is it encrypted?

The HIPAA/HITECH law describes that a service provider that has contact with Protected Health Information (PHI) must provide a BAA (business associate agreement). Efax by J2 doesa good job of explaining the BAA here. The federal government explains it here.

There are companies that specialize in healthcare faxing, like Scrypt.

There is a PhD who explains how to fax within compliance using efax by J2 enterprise.

The problem can be the email. As efax sends the fax via an email attachment, it means that email may have to be compliant too. Even Faxage suggests secure email.

“If you use a cloud-based service, it should be your business associate,” David Holtzman of the U.S. Health and Human Services Department’s Office for Civil Rights, Privacy Division, said in this Yahoo small business article. “If they refuse to sign, don’t use the service.” [source]

Want to see some BAA examples? Here and Here.