My Ten "Converging World" Predictions for 2006

My Ten "Converging World" Predictions for 2006

Summary:  Well, it seems that everybody has been posting their top ten predictions for 2006. In the converging worlds I cover here, I foresee the fast-approaching New Year as one for new forms of competition, unprecedented cross-sector alliances, under-the-table sleight of hand, political machinations, lawsuits, and more acquisitions.

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TOPICS: Unified Comms
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Well, it seems that everybody has been posting their top ten predictions for 2006. In the converging worlds I cover here, I foresee the fast-approaching New Year as one for new forms of competition, unprecedented cross-sector alliances, under-the-table sleight of hand, political machinations, lawsuits, and more acquisitions. 

So then, dust off the crystal ball. Here are my ten predictions for 2006: 

  1. Enterprise VoIP Specalists will Fend Off New Competition. Some of the smaller stand-alone VoIP operators will boost their marketing to SMB and enterprise users. Look for some serious QoS enhancements from the stand-alones. Yet as earnest and authentic some of these enhancements are, the stand-alones will face an uphill fight against entrenched enterprise VoIP players such as Cisco and Avaya. 
  2. Consumer VoIP Will Be a Battle Between Built-Up IM and Bundled Broadband. The real competitive battle for VoIP consumers will be between services that  were once hatched in the world of IM and are now building out full-fledged outbound and inbound VoIP, and the broadband Internet service providers that via attractive price packages, will bundle VoIP in with existing products. In such a scenario, the stand-alone VoIP providers lose. 
  3. Softphone Licensing Deals Will Proliferate. I look for 2006 to be a year of licensing deals between softphone providers as Skype, SIPphone's Gizmo Project, etc. and a whole host of service providers looking for a softphone option. Licensing contracts will be struck with major VoIP providers as well with websites and web-based services not normally thought of as VoIP players. The real competitive dynamic here will be the battles in the licensing arena between softphones with IM roots and/or capability, and those that, like CounterPath Solutions (formerly Xten) were developed and grew up in the more traditional softphone UI world.
  4. "Net Neutrality" Will Be Talked About,  But Not Much Will  Be Done. "Net Neutrality" is, in part, the concept that Internet service providers should treat all legal content equally, and not be allowed to prohibit or surcharge, competing services that are  carried across their networks. An example would be, say, AT&T not charging Vonage for transmission of its services- at the same time Vonage and AT&T-owned CallVantage are direct competitors. With 2006 being an election year, Congresspeople of both parties will talk loudly about sculpting a net neutrality law, but a select few powerbrokers who believe in little if any regulation will block enactment of any meaningful net neutrality statutes.
  5. Broadband Providers Won't Violate Net Neutrality Directly. Election-year politics will keep the major broadband providers from attempting in-your-face net neutrality violations. That's because an egregious initiative involving surcharges will make it more difficult for broababdn provider's friends in Congress to block or water down net neutrality legislation. Still, I'd look for a few attempts- namely, attempts to impose de facto preferential treatment based on obtuse fine print language in subscriber contracts, or even more isolated incidents of port blocking of a technical nature so arcane enough that the broadband monopolies will be able to sustain plausible denial.
  6. We Won't Be Any Closer to True Mobile E911 VoIP. We'll see a whole raft of provisioner-carrier alliance announcements that will attest to the provider now offering "true E911." As I have written before,  we won't have full E911 until all devices that could carry mobile VoIP are GPS-enabled, with caller location trackable to  specific geographic points that could be matched with specific emergency response agency coverage territories.  Because the imperative for doing so has yet to be widely raised, the consumer electronics industry has no real incentive to do this, and the infrastructure won't be modernized until GPS VoIP is on the way.
  7. Vonage Will Go IPO Rather Than Sell. With more than $650 million raised, Vonage will  announce an Initial  Public  Offering in  the February-March time frame. Although the ultimate strategy of an IPO will be to bulk the company's valuations up for an eventual sale, I see 2006 as a year in which the company will want to use market valuations to prove their worth to a potential acquirer.
  8. Mobile Video Entertainment Content Deals Will Proliferate. We'll see a flood of licensing-driven deals between tv networks, producers, movie studios, and cell carriers. Some will enjoy modest success, but be hyped up in the general media to a level beyond the true numbers of paying subscribers.
  9. TiVo Will Be Acquired In A Bidding War.. Some readers are puzzled about why TiVo's technology to make free transfers of recorded shows between TiVo boxes and iPods is troubling to key power brokers. Well, the content police and the licensing police are a joint force here. Yet because some of these same providers see TiVo as a potential distribution ally, they will look for a way to accentuate TiVo's positives. I see an acquisition of TiVo as the preferred strategy. With both consumer electronics and digital content interests, Sony would be the logical acquirer. Still, Philips and TiVo have been distribution partners since TiVo's earliest days. That's why I think that Philips and Sony might get into a bidding war for TiVo. 
  10. IDT Will Acquire The Rest of Net2Phone. I've written before that News Corp. (with MySpace) or Amazon would be a much more suitable acquirer to unlock the potential of this iconic brand.  But absent an acquisition attempt from either of these two that I am not detecting as of yet,IDT appears to be in the driver's seat. If they don't get what they want via an offer, they are resolute enough to fight this out in the courts.

Yes, 2006 will be a pivotal year for the converging worlds of IP Telephony, VoIP and Broadband. Not only will we report, but we'll try to "thought-lead" as well!  

 

Topic: Unified Comms

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  • Prediction 10---- IDT

    You may be right Russell, but I know there will be a huge battle for this asset. Think lawsuits, SEC and Delaware courts.

    Also IDT's machinations have not worked out recently---- remember the ill fated IDT Spectrum, problems in Haiti, and locking reporters out of the IDT annual Meeting. Not to mention IDT is in the bottom 1% of shareholder friendly companies.....ever wonder why ?
    integsol
  • Never forget

    the WiMAX Steamroller! We should start seeing it in the fall . . .
    Roger Ramjet
  • Double Vision x Sixth Sense = Bloat

    1. A true vision since Cisco and Ayaya have signed up the QoS specialists (the LECs) as sales channels.

    2. Score one more for our hero (Russell) - this is a clear and concise read of market dynamics.

    3. Again, super-blogger scores. Is there no end to this man's talent?

    4. Get real Russell. The LECs have been pushed very hard indeed by regulation in the past twenty years - even C-LECs. An election, of any kind, is seen as a window of opportunity by these poor hapless low-margin businessmen. Any funding (sorry; lobbying) at this time is money well spent (sorry; invested) in ensuring a level playing field for the supply of communications services... The irony is that the politicians will speak the language of the voter. I, at least, am apologetic; I'm sorry that politicians are such scum.

    5. Yes tensions are high and LECs, in particular, will be caught red handed trying to deliver to shareholders before their political puppys are fully house-trained. A good solid goal here.

    5. Probably a good pass, but no goal here. Remember Russell, while the LECs have the ear of the politicians, to expect as much horse-trading over E911 as you'll see over QoS-Preference-Neutrality.

    7. A truly innovative play here. However, as AT&T's acquisition showed, some major carriers are emerging from the shadow of the dot-com-telecom-bomb (don't get too excited, there are still plenty of squad injuries). The directors of Vonage will be in a beauty contest with a whole series of other, cheaper (ahem), contestants. They can't afford to keep the richest, most eligible, potential partners lusting when there are other, more accessible, sweeties on offer... Being serious for a moment; It's not just about who has the biggest hooters, it's also about reach, potential reach, markets, brands, and, and, and... Not so much a waiting game, more a; I can do anything she can do better, anything she can do I can do... (etc.). 2006 will be the year of the VoIP acquisition, that means Vonage Management's task for January is: To sell now, or grow till 2007? Too experimental, though if you score with this I'll be the first to applaude.

    8. Now your falling back on more familiar plays. I don't see this one working in the current league - too many of the current crop of coaches have seen this idea when they watched carriers play the on-line TV game (and lose heavily). They know how to handle it. They will add to public curiosity (through hype, as you suggest), in order to try and measure likely future success as acceptance grows but the best technology [WiFi, not 3G (too small in every way except coverage) or WiMAX (not enough coverage)] will still not have enough QoS (particularly predictability - and that includes cost predictability) or privacy to grab enough attention. The bigger the bandwidth required, the more likely that you can grab human attention - but, attention on the move is subject to major distractions (a form of urgetnt-attention-seeking competition, in effect). The best model is therefore not one where the user pays-per-view, or pays-per-hour (e.g. credit-first) because this actually detracts from the customers' experience unless they are in a stable environment (at which point, other competition enters the picture (sorry, pun unintended).

    9. TiVo was an expensive content industry mistake (they would say that 'mistake' is a bit strong, but would probably settle for 'experiment'). They might be prepared to pay quite a lot of money to erase it. If Phillips and Sony get into a bidding war I can see the content industry weighing in to look for cheaper ways to undermine it. That said, surely a cable-technology-deficient tech supplier is a better bet as a TiVo acquirer? Some company with a desire to grow their neutral supply position in last mile wire transmission with a PVR option? I can think of at least two (excuse me while I ring my broker). It doesn't really matter who - a TiVo acquisition prediction counts as a goal - it's over the line.

    10. Stating the obvious here Russell, you must be running out of subs who have been coached in the full team repertoire. IDT would not acquire so much of Net2Phone without first putting a clause in the contract that they have first refusal on the rest. True, players like News Corp are known to play dirty when the ref is unsighted - and why let a competitor pay less? But Net2Phone didn't get into this with their eyes shut either. I guess it's down to a price versus future-earnings-potential-with a-good-reputation kinda deal... Sorry Russell, I'm kicking this one into touch.

    Still, I think you scored well enough to win the game - you got it kid!
    Stephen Wheeler