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Communications in 2007
[January 16, 2007]

Communications in 2007

President and Editor-in-Chief
(The following is taken from Rich Tehrani’s VoIP blog:)

Any look at the future of any industry would not be complete without analysis of recent events. In the case of communications, 2006 seems like the transitional year of all time for a number of reasons. Next week, Jan 23-26 marks this year’s first continental US communications trade show, Internet Telephony Conference & Expo in Ft. Lauderdale, Fl. This article is intended to set up the debates and discussions that will take place during this event.


There is more money floating around in this and every other market than at any time during recent memory. As long as the money keeps flowing, the transformation and consolidation of the communications industry will continue to take place. The positives of this consolidation will be a smaller amount of stronger companies. The negatives will be less competition and less choice.

Incumbents: AT&T/Verizon (News - Alert)

This is the first full year with AT&T is back together and it remains to be seen how the world will react to the competitive pressures of this massive telecom provider. In addition, Cingular as a brand will disappear and AT&T will be able to sell true quadruple play services under one single unified brand.

In addition this is the first full year since the FCC made it easier for phone companies to gain national franchise rights to provide video programming.

Cablecos Get Spanked

It seems the FCC has had it with the cable companies as it has forced the industry to accept the CableCARD standard in an effort to ensure more competition from the consumer electronics market. The goal is to allow consumers choice by not forcing them to lease set top boxes from cable companies.

Any way you look a this it shows the FCC is focusing more on consumer needs. Many still believe the agency is slanted towards the ILECs but if this was the case, things have changed recently. Read below for more on this topic.

Network Neutrality

AT&T was forced by the FCC to accept net neutrality principles in exchange for the right to merge with BellSouth. AT&T says they will abide by these principles for two years – except where it applies to their IPTV service. Some have suggested that the IPTV loophole should not have been allowed at all.

This will be a pivotal year to see how AT&T abides by its net neutrality promises. In addition it remains to be seen how AT&T and Verizon will compete with triple play offerings from cable companies. In addition it will be interesting to see how the phone companies leverage mobile services as a differentiator from cable.

One also wonders what will happen to single play providers like satellite (who can in reality provide expensive and relatively slow broadband as well) and Vonage.


A few years back (December 2004 actually) I introduced the concept of the VoiPod or a VoIP phone by Apple. Apple did release an iPhone but it seems to be downplaying the device’s ability to use WiFi telephony. In fact I would guess Apple will downplay the device’s ability to use wireless VoIP as long as Cingular doesn’t allow wireless song downloading to compete with Apple’s iTunes service. In short it seems Apple made a deal to preserve GSM voice minutes in exchange for Cingular preserving iTunes downloads.

The important question for the entire telecom industry is whether this device will change the telecom landscape. It is possible the iPhone could be a runaway success stealing massive share from Nokia, Samsung, Blackberry and Microsoft (News - Alert). I predict it will. In a few years this may put Apple in a position where the wireless carriers will have to negotiate to get Apple devices on their networks. This idea has interesting ramifications.

The Motorola Razor showed us how a consumer electronics device could drive the public mad and get them to switch service providers. I have suggested the VoIP industry take advantage of these trends. On the one hand, the iPhone may have closed this opportunity – not leaving room for VoIP companies to come up with killer devices. On the other, the iPhone may not be VoIP-enabled at first. This means consumers may still want a dual mode device.

Unified Communications

This is the first full year since Microsoft, Cisco and others have declared they are serious about unified communications. Now that the announcements have been made it remains to be seen what will come of them. Will enterprise customers buy new equipment that is unified communications enabled.

Some smaller PBX players have already told me their customers know what they want and it isn’t unified communications. They buy PBXs, IVRs and ACDs according to one prominent industry source. Is more education needed before CFOs open their wallets? Lets see what 2007 brings.

VoIP Prices Increasing

This is the fist year in which Skype has had a price increase. This is dramatic news. It changes the landscape of telecom. It signals a shift in how this eBay (News - Alert) company works (disclosure – I own eBay shares) and shows Skype is under pressure to generate more revenue. This is the news that companies who make money from voice calls wanted to hear. This can only be seen as a Christmas present for Vonage. It remains to be seen if Skype (News - Alert) will be forced to continue to raise process to generate revenue. If so this, leaves much more breathing room for other players in the market.

It should be noted that Skype didn’t raise prices technically – they stopped a free promotion.


This is a pivotal year in the world of IMS and vendors are going to have to figure out how to sell products to a market which evolves so rapidly. Challenges include interoperability as well as coming up with service consumers will pay for.


These markets are poised for rapid growth. IPTV may face increasing pressure from Internet TV solutions and WiMAX may see challenges from congestion on unlicensed frequencies.


But I introduce these concepts as a framework for discussion only. Next week there will be much more discussion about these and other topics. 2007 promises to be a year filled with excitement in telecom and I am more enthused than ever at the prospects for customers, vendors and the industry as a whole.


Rich Tehrani is President and Group Editor in Chief at TMC (News - Alert). In addition he is the Chairman of the world’s best attended VoIP event, Internet Telephony Conference & Expo.

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