FreeConnect is a service available to Australian businesses that works a bit like Freephone. Businesses receive calls from online visitors to their FreeConnect profile page. The idea is quite straightforward but the concept of a click-to-call portal seems to be the first of its kind.

Click-to-Call is yet to realize its potential. You can have plugins like Skype but the caller pays for the calls. There are click-to-call solutions available from VoIP providers that work pretty much like Freephone services i.e. calls are routed by the service provider to the numbers (either nominated by the business or assigned by the VoIP provider). FreeConnect effectively provides - all those businesses who sign up - the ability to turn their existing phone number to a Freephone number. It has gone for the portal approach rather eStara-like case-by-case approach whereby the vendor typically implements click-to-call capability over the client website.

DU blocking Skype looks a bit out of place because: 1, DU is a progressive new provider/competitor of Etisalat, and 2, DU itself benefits from the use of IP transportation of voice minutes. Not only does DU secure low termination rates from VoIP providers globally, it also facilitates exchange of VoIP traffic between some of the Middle East carriers – possibly earning a cut in the middle.

DU chooses not to pass on the benefits of lower ILD costs to end users because it has regulatory protection. The regulator in the country is interested in VoIP within the country and not the cross border VoIP. Apparently the regulatory features like emergency services and legal intercept are yet to be tested resulting is substantial delay in VoIP roll out.

I can see the value that this Echoes platform creates for a mobile carrier. However this is surely not for a wireline operator. If Microsoft’s Echoes is for real and the company is targeting wireline telcos as well, this could turn out to be yet another attempt to pitch applications to a telco without due consideration towards the lack of OSS/BSS integration. Wireline telcos are not slow adopters of fancy apps because they just happen to be conservative to the core. They have a dozen hooks to worry about.

And they prefer to have one humungous underlying platform that can be extended to accommodate all Voice 2.0 services. Echoes does not seem to be that extended underlying platform. It seems to be an extended IM platform, not an extended telco app server, which is what wireline telcos utilize and open up to offer new services.

This announcement from ECI caught my eye yesterday. It has been a long time since I last heard about MSAN+Voice. ECI has integrated VoIP access gateway module into its MSAN product. There are several MSANs with VoIP access gateway modules out in the market. ECI claims to be unique in that the vendor has integrated the module onto the network interface card, freeing up an additional slot for a subscriber line card that would otherwise be occupied.

Anyway, MSANs have a clear business case for operators that are unnecessarily running two parallel voice networks: narrowband voice and broadband voice. A VoIP enabled MSAN bridges the two disparate networks. A customer can either migrate to a VoIP line or choose to keep its PSTN line. Both will be served by the same network. Obviously there needs to be interoperability between MSAN and the softswitch being used by the operator. ECI claims to have proven the interoperability in the trials and deployments it is involved in.

Our estimates suggest that 5.3 million IP PBX lines were sold in 1Q08. These include those IP PBX lines that were shipped as part of hybrid TDM/IP systems. We have previously reported line estimates from pure IP PBX systems only.

Geographical split shows that EMEA leads. The 5.3 million IP PBX lines sold during 1Q08 generated $875 million in revenues worldwide. Avaya leads the market with 25.1% market share worldwide. That lead is followed by Siemens with 23% and Cisco at number three with 17.7% market share worldwide. (Market shares by line shipments).

It has been over two years since some of the first peering federations were announced. Following the Netherlands setup facilitated by XConnect there was a lot of enthusiasm about the CableLabs’ peering RFP. However, two years into trials, there has been no official announcement from CableLabs. An equally bigger peering RFP put out much later by GSM Association was finalized during the early part of 2008.

What I had heard some six months ago was that the CableLabs peering contract was awarded to a smaller ENUM server company (my guess is NetNumber since they are the most widely selected routing database vendor in the cable segment). However a bigger player in form of NeuStar was brought in for some handholding.

Peter Blackmore is actually going to take charge as CEO of UTStarcom from July 1st. The present CEO - Hong Lu, an equally charming guy - updated us yesterday on NGN voice and the service providers they are trying to win over. Hong revealed that one of its softswitches in China (just outside Shenzen) is serving around 3 million subscribers. That is perhaps the biggest single softswitch POP I have heard about.

Anyway, back to the interview with Peter. I caught up with him right after the company’s analyst event here in New York today. We talked about (1) UTStarcom’s ability to cross sell its complementary triple play product lines to customers, (2) company’s strong focus on IPTV, (3) reasons for offloading the IP CDMA business, (4) strategy to address opportunities in Eastern Europe, and (5) strategy to address the issue of lower gross margins in the handset business.

Apart from the video content above, I would add the following notes from his presentation that we sat through earlier during the event:

Alcatel-Lucent will be demonstrating its Voice 2.0 capabilities at NXTComm next week in Las Vegas. Alcatel-Lucent is currently engaged in setting up a developer program. The purpose is to provide a Service Creation Environment based on its IMS application server allowing development of Voice 2.0 applications via its existing Web 2.0 APIs.

The developer program is intended both for extending legacy IN features on to the Web as well as to introduce new web-enabled applications. Alcatel-Lucent’s IMS application server has IN interfaces that will be exposed through Web 2.0 APIs, while existing products such as the Contact List Server, Presence Server, etc are already offering Web 2.0 interfaces.

Veraz has introduced a smaller version of its softswitch. iMN is a mini ControlSwitch (Veraz’s flagship product). I thought this was the long awaited Class 5 application server that Veraz has been working on. It turns out that iMN is a small version of ControlSwitch, supporting both Class 5 and Class 4 applications in a single platform.

It is pre-packaged i.e. many of the parameters on the ControlSwitch which can be customized are pre-configured to make it easy to install and turn-up quickly for smaller applications. The mini platform supports 15,000 subscribers. Carriers that deploy the iMN and later decide to scale beyond 15,000 subscribers would then migrate to the ControlSwitch.

Espial has scored IPTV middleware licensing deal with Motorola. License is for full platform including client side as well as the server side middleware to be pre-integrated with Motorola IPTV STBs. Components will be licensed as per customer requirements.

Motorola is the leading IP STB supplier. As of 1Q08 it had shipped over 4.4 million units worldwide on a cumulative basis. Espial and Motorola will be actively working together across Europe and Asia.

Verimatrix is among very few IPTV vendors that are able to re-use the existing wireline IPTV solution architecture to support Mobile TV. Extending the same architecture means that a telco – offering IPTV and looking to add mobility play – will be able to offer Mobile TV utilizing the existing Verimatrix content security solution in the network. No additional investments from security standpoint.

Other IPTV vendors, especially the middleware and the encoder vendors, have found it hard to replicate the wireline IPTV capabilities over in the mobile TV arena. Maybe things will change once IMS standards are in place for IPTV.

Verimatrix content security platform supports over 5 million end devices receiving IPTV services. I spoke to Steve Oetegenn, Chief Marketing Officer, Verimatrix at NXTcomm today. Steve thinks a standalone mobile TV offering may not be a huge market but when bundled with other services, it can create substantial value.

GSMA IPX initiative could change several things for cell operators. To start with, it can lower down interconnection costs substantially for cell operators. There are several value added services that could be enabled across multiple cell operator networks. Dawn Hogh, VP Marketing, Veraz Networks spoke to me today about her company’s support for the GSMA IPX spec.

The spec support involved enabling features such as certain type of transcoding and end-to-end QoS. Veraz has been pushing its peering solution for the last several months now. With the GSMA IPX support, it is now able to sell the peering solution to cell operators as well. But it will be the VoIP wholesale carriers that Veraz will be targeting first. VoIP wholesalers like iBasis, Telecom Italia and BICS are looking to cash in on the new opportunity (the multilateral GSMA IPX peering contract was awarded to NeuStar some time back). Veraz already has three customers for this GSMA compliant peering solution. BICS is one of them. Veraz will be making the BICS announcement on Monday.

It seems plausible to assume that IP-In-IP-Out could have a major impact on the IPTV encoder business. IPTV encoders are somewhat analogous to media gateways in VoIP business. As the IP-IP peering in the VoIP world grows, the media gateway business should go away along with the change because the hardware needed to do the legacy-to-IP conversions are not required.

However just like VoIP media gateways are re-inventing in VoIP along the lines of transcoding etc, something similar is happening in the IPTV business. IPTV encoders are moving towards a more sophisticated mpeg2/mpeg-4 transcoding in addition to the conversions. So even in an IP-in-IP-out world, the encoder is at the center of the deployment. There are also compression challenges where a high bandwidth (HD) stream may be required to be compressed in order to cater for lower edge data rate.

Thierry Fautier, Director Telco Solutions, Harmonic discusses the subject in this conversation. He also lists some of the major IPTV market trends.

Robby Benedyk, Senior Manager Global Marketing, Tekelec co-authored PacketCable ENUM Server Provisioning Specification that deals with the way ENUM is handled in Cable networks. Tekelec has announced a commercial ENUM solution, which Robby discusses in this video. Cable MSOs are very active in the area of VoIP peering.

The specs have also been submitted to the IETF and as a result could be extended over to the GSMA IPX project initiative. Once that happens, Tekelec will substantially increase its target market for the newly announced ENUM solution.

The timing is certainly right for Sonus to position itself in the VoIP over WiMax market, which is starting to ramp up in parts of Eastern Europe, Africa, and Asia. There is nothing new in terms of the capabilities that Sonus has to support for VoIP over WiMax. The existing product line will do. However there is a much wider choice or codecs that Sonus offers for VoIP over WiMax implementations. A wider choice of codecs gives a Wimax service provider flexibility in terms of the bandwidth it provisions for VoIP.

Once mobile Wimax kicks in, we can expect vendors like Sonus to tweak the platform a bit more in order to be suitable for VoIP over Mobile Wimax.

Broadsoft will be announcing availability of Web 2.0 APIs next week. The company had announced an open API developer program a couple of months back. The REST interfaces promised to the developers will be released along with the announcement next week. So far Broadsoft has managed to enlist over 300 developers in the program. With the developer friendly Web 2.0 APIs, the company expects that number to increase substantially. With such APIs in place, the ‘Sandbox’ will start working off the web where developers can test their applications.

Attendance was low for sure. A lot of people walking along the central isle …. But exhibitors along the ends of the hall saw very little traffic.

Lots of Analysts and Press. Announcements were not so exciting though.

Exhibiting companies: mostly infrastructure guys. No startups, no emerging companies ….. and no debates around Telco 2.0 on the floor.

The overall theme appeared to be access again. Not much talk about apps. Some video and IPTV stuff was being talked about. Wimax and LTE ... not much around that topic either.

There are several approaches to prioritizing multiple applications on a converged network. Zeugma does it with a product that analysts are beginning to call Service Delivery Router. One of the major issues – going back to the RSVP days – in convergence is how to offer a multi-tiered service. For example, it would be plausible to assume that somewhere down the line a service provider would offer a two-tiered voice service … one that is a high-quality high-price HD voice service, and the other that involves an inexpensive best efforts voice service. Zeugma product does exactly that sort of thing for multiple application types.

In a recent short report on Voice 2.0 we took an early look at how various vendors and service providers are approaching the delivery of these communications aware mashups. I think it is fair to comment that the delivery models are yet to be established. These short interactions with Sylantro and MetaSwitch present a couple of contrasting views and should be viewed along with posts like the ones on Broadsoft and Ribbit.

There are over 1.3 million live IPTV subscribers on ECI’s MSAN product. The biggest such platform deployment for ECI is at France Telecom. Not all FT’s IPTV customers are on ECI MSAN though. Some are on Alcatel-Lucent platform. I am in touch with some other MSAN providers and will do a post early next month that provides a breakdown of IPTV subs by the type of MSAN they are being served by.

With reference to analyst relations:

1. Make an effort to understand the technology your clients develop, and the ecosystem around the company product. This is the most important tip.

2. Get one-para quotes from your clients on major industry developments so that an analyst knows the overall stance of your client on the subject. This could sometimes result in a phone briefing.

3. Get the photos of products / diagrams / senior management on something like Flickr. Make sure there is a good variety available.

4. Turn white papers into short video presentations. I would rather go through a short video describing a company’s position than download a pdf (and print it, and then read it). For now, videos might be watched by fewer. But they stick. If you want to continue with the pdf white papers you can now include Flash in pdf files. So perhaps some video content could be added inside these pdf files.

We need Web type APIs into IPTV middleware for tighter integration of applications on TV. There is already a wealth of apps available on Web. While some of these could be offered by CATV using DOCSIS transport, they are optimised for IP networks. The key to making them available over an IPTV subscription is leveraging the ergonomics of a TV remote control rather than let subscribers access these applications by browsing Web over a TV screen. Using something like Flickr on a TV with the help of a remote control calls for open APIs to the client and server side middleware. This is why Microsoft’s recent announcement (to open up its middleware) seems important.

The video conversation with Brian Caskey from UTStarcom below discusses some of this. We started by briefly talking about IPTV prospects in general. UTStarcom has so far adopted an end-to-end solutions approach to IPTV deployments rather than open APIs to its middleware.

The Korea Communications Commission will start issuing IPTV licenses in August. Live TV over broadband internet has been given a green signal. Hanaro Telecom and Korea Telecom have been offering an over the top, VOD type IPTV service so far. The two collectively have signed up over 1.5 million IPTV subscribers so far. These two – and LG Dacom – have expressed intentions to invest over $350 million in IPTV services.

Since it is IP based TV, one could presume that the viewer stats would be similar to web stats. The difference however is that in IPTV, the client side is usually a very intelligent piece of software that ‘caches’ in a lot of intelligent info such as the program synopses etc. As such, a server alone will not pick up all the necessary bits. Someone like Oki – the vendor has just announced a stats solution – has to integrate a piece of utility on the STB as well.

OKI’s stats solution is built with the broadcaster in mind. JR had the end user in mind when he blogged this piece a few months back.

Mirror numbers are a nice way to circumvent high calling rates. But they are best applied to apps like Jangl etc (provided you have luck monetizing the service). So when Jaxtr announced ‘offnet’ calling to any phone number for low price, I was a bit disappointed. After all there are over a million companies out there offering convenient low cost long distance calling service.

A 2.0 company such as Jaxtr leads you to believe for a while that we are communicating in (additional) new ways that is something out of this world and then offers simple low cost telephony. I bet you a thousand dollars that Jaxtr did not have plain old telephony in the original business plan. Jaxtr’s offnet calling is somewhat analogous to SkypeOut type services. And yet if you think about what is wrong with Skype, it is the dependence on those termination revenues.

If Skype had sought an alternative direction for monetization, we could have had a true Voice 2.0 company today. Termination business has made Skype complacent and at the same time threatened its prospects due to thin margins. There is something not so graceful about a Voice 2.0 company offering simple termination. This is emerging merging with the ordinary.