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:
- 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.
- 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.
- 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.
- "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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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!