The common errors of Telecom CEOs

With a recent spate of Telco CEO's complaining about the evil deeds of Google and Apple and some other stupidity, I start to wonder how hard it is to be a Telco CEO. So sit back and enjoy the rant. :-) Let's look at some of the errors of most telco execs.

Error 1. Lack of basic managerial skills and telco knowledge
Of course Richard Obermann of Deutsche Telekom got me irritated, when he said he wanted to charge Apple and Google. However Maxime Lombardini, the CEO of (my beloved) Free.fr, made the exact same mistake. A mistake Ed Whitacre, then CEO of AT&T had made years before and which gave me my opener on a primer on peering and transit. The main reason this viewpoint irritates me is; they complain about their underinvestment in their network. They then point at two companies who are very visible, but don't really matter in the equation. If Apple hadn't existed, someone else would have come with a bandwidth hogging device in a matter of 0-2 years. If Youtube hadn't existed, Dailymotion and Facebook would have existed and would have delivered the goods. What I mean to say is that user behaviour wouldn't have changed and somewhere between 2010 and 2013 we would have hit the exact same limit as now.

You think a Telco CEO would know that his companies projections about network growth were completely off and that his team doing network planning should be sacked. However, the painful thing is, these guys seem to believe their own stories. They actually don't know what pays for their network. They don't understand peering and transit. They can't extrapolate growth models and they don't know consumer behaviour. Hullo, anybody home? Those are the things a CEO should keep track of!

Error 2. Google and Apple Envy
Whenever you hear a telco exec speak about other companies, it  mostly is Google and Apple. Google and Apple is what they are afraid of, are envious of, that they blame, that have caused the world to change, that have made them miss a target, it's all Google and Apple's fault etc etc. Worse still, they compare themselves to these global giants and then alude to how they will compete with them, because competing with Google and Apple will let the halo of Jobs and the colors of Google shine upon them and will make them somehow worthy of the enormous pay they get and compensate the lack of charisma they generally have.

Google and Apple are great examples to look at if you like reading Forbes, Harvard Business Review and Wired. They are less interesting to look at when you are a telco exec. There are no similarities between their company and a telco:

1. They are global companies competing on a all continents with varying success, telcos are masters of a local business, literally rooted in the soil of their home country and some countries they acquired. Telcos wouldn't know what to sell in Nigeria, whereas Apple and Google need to consider how to monetize Nigeria, as it is a 160 million people market,  that is already actively using their products. 
2. Apple is as dependent upon blockbusters as Pixar and MGM. A telco will report steady flows of capital. A bad year is a couple of percentage point less revenue than projected. Apple can only mess up so many times and everyone leaves them. They know, it happened in the nineties. 
3. Google is in a constant state of flux, running the world's largest computer and changing it, while it remains operational. If it messes up, people move to Bing. So change in the face of uncertainty is essential to its business.  A telco can plan for a major transition 3 to 10 years ahead and the planning department should be able to get everything right with a maximum of 2 years difference. 
4. Both Apple and Google value brilliance and excellence more than anything. They need to stand out. A telco, weirdly enough, doesn't need that. It needs consistency and dependability. A couple of small field trials solve more problems than brilliant people. 
5. The valuation of Google and Apple may be through the roof, but it rather pales compared to turnover and profits for telcos. Google's yearly turnover is slightly less than the EBITDA of Deutsche Telekom, which is 20 billion euro or 25 billion dollar. Google has to conquer the world for it's money and Deutsche Telekom is safe in its empire. Apple is twice Google, but still only half of Deutsche Telekom's revenue. Apple is however  a consumer electronics company who had a very good last 10-13 years, but just ask Sony and Philips, how hard it is to keep that lead. Oh, and both Apple and Google don't pay dividend, Telco's do. It may be old fashioned, but as a shareholder I would like that. 

So where should telco execs look? At other utility companies of course. However that is much less sexy.

Error 3. Infatuation with delivering services

Ever since someone coined the term service economy, everyone wants to offer a service. It is better than being in agriculture or manufacturer of products. But instead of just naming their network a service, telcos have looked at services to be delivered over their network. For a while they bought content and services companies like Endemol, Time Warner, Plaxo etc. And we all know how that ended. So now almost no one in the Telco industry is in real internet service and content companies. 

But still, they don't learn, so they invest in IT-services, where everything is much more murky. And let's be honest, nobody believes the telco exec is cooler than a movie mogul, but he is stil cooler than an IT-services exec. Several telcos have bought or grown IT-service companies. KPN bought Getronics, BT has BT Global Services, Deutsche Telekom has T-Systems and last week NTT bought Dimension Data last week. There is never an explanation why, other than that services are the wave of the future and customers demand it. I doubt both highly. Furthermore, given how much money they pay for these companies, I doubt it is beneficial to the shareholders too. 

You see, I work for an IT services/consultancy company.  I know the nature of the business. IT-services companies are the construction companies of the digital age. IT companies are just like your local builders. They are lying, thieving, unprofessional, shoddy bastards you can't do without. Everything would be better if you could Do It Yourself, except that you don't have the time and the expertise and you've seen too many DIY projects fail horribly. So you hire a bastard IT-company (builder). Really there is no difference between a construction company and an IT company. Both make life hard for the customer and the supplier. An IT company is always faced with a customer who underestimates the work, but who still rather pays someone else to do it, than do it themselves. So whoever the customer chooses, it is generally the one with the second lowest price. This is the guy who didn't calculate all the contingencies well, but was at least able to name some to comfort the customer, who knows there will be contingencies. Then the customer and the supplier set of on a perilous journey of over expectation for both the end product and end profit. Half way through they know the journey is impossible and neither are going to get what they want. For the remainder of the journey they fight over all the extra work that needs to be done. In the end neither is happy, both claim they paid too much and got too little etc. So low margins, high hassle. And this is the market telcos want to get into, because somehow it fits their high margin business...

Error 4. Overvaluing the retail business over the wholesale business

It is amazing how many telco CEOs have fallen for this trap. The only one I know who avoided it is Ad Scheepbouwer. LightSquare and Reggefiber are based on a wholesale model, but I hardly would consider them traditional telco.  In most telcos it's the wholesale business that brings in the margins. Regardless of whether it's their own retail business that sells the line or a retail competitors. This is clear in the DSL market which is often regulated to support unbundled local loop and wholesale broadband access. But also in the business market the incumbent wholesale network organization will service competing retail organisations, because its much more efficient to use networks that are already present at a customer, than build a new network out. However apart from Ad Scheepbouwer, I've never heard of CEO's actively supporting open access networks. It's probably because services sound sexy instead of being a plumber. 

Conclusion

So if these basic elements are so often misunderstood and people can still become CEO of a telco, what is going wrong in the industry? Why is this so hard to communicate to shareholders and the media? Is it maybe that we want to be deluded into believing there is a grand future for telcos in GoogleLand? Or is everyone, the CEO and the shareholders included just dead scared of the grey future of commodity infrastructure that pays a nice guaranteed return?

A clip of my presentation on the future of interconnection at Ecomm

Lee Dryburgh put up the movie of my presentation on the future of interconnection. I gave this presentation last year at Ecomm '09 in Amsterdam. It covers topics like Calling Party Pays and Peering and Transit. What I set out to demonstrate was that it is very economically beneficial for networks to treat voice differently than data. This is because all networks benefit from the current Calling Party Pays interconnection scheme. A triple play ISP may see up to 10% of it's revenue and a significant part of its profit resulting from the fact that it has to 7.5 cents per minute to a mobile network. The lowering of mobile termination fees is therefore feared by many ISP's, because it negatively affects there turnover, even though most of the money just passes its bank account to go to the mobile networks. I have embedded both the movie and the presentation for your convenience.

Rudolf Van Der Berg's Presentation at Emerging Communication Conference & Awards 2009 Europe

View more presentations from eCommConf.

How much do you want... name your price

I must apologize. First to an innocent telephony representative who sat in the "Future of Internet"-session I was in yesterday and then to all of you and to the world. I may have delayed fibre roll outs by 5 - 15 years. I'm sorry, I shouldn't have done that.

What happened? In one of the break out sessions the representative of the old PTT did the standard telecom thing and argue that there wasn't a business case for them to invest in new networks, because all the benefits of the new network fell somewhere else. He gave the impression that this was unfair. He was probably honestly feeling like that and I reacted with a knee jerk reaction. The one many readers of my blog would have fallen for too. Certainly some of the pundits in the session had the same reaction in their faces, but I had the fastest tongue. I explained the man he was wrong. How you could make money on the network. How Reggefiber was doing it. How it was a real estate play, how the electricity companies can do it etc. And I was right! I've been right all the time, every time I argued it. Honest people can make honest money and invest in new networks.

However I have to apologize... and many of you will have to as well. You too fell into this trap. Some of you have written papers about it to prove you were right. I did too! Why do we need to apologize? Because our insistence on being right is stopping everything. We're not getting FTTH, ubiquitous wireless etc. etc. not because they are stubborn, but because we are stubborn.It is us, not them. And we need to realize that.

What we're saying is; I want the best utility for a reasonable price. With reasonable, we mean an 8% return on capital, like OPTA promised Reggefiber. Nice money. Stable income, inflation adjusted. The kind of investment pension funds dream about. The nice and boring pension fund people would love such an investment but they are slow and cautious.  And we're right in thinking this is reasonable. It's only fair that they make 2 times as much interest than we would normally do. We say this because at heart all us fiber loving hippies are just that; Fiber Loving Hippies. Hippies share and love and are grouchy at an unfair and unbalanced world; a bit high on love and a bit low on reality you could say. And just like the hippies, we're wrong. We got our incentives wrong.You cannot get good, fast and cheap. We need to pick two.

Give them the money! 
Our reaction should have been: "I see your point. You're right. It isn't fair that you are building the best thing in the world and you don't get something in return. How much do you want?". Those are the magic 5 words: "How much do you want?" and then give it to them. In all reasonableness. If my Telco wants 10 euro per month in net profit more for an unlimited 1Gbit/s FTTH network connection, in perpetuity, why am I against it? 20 euro? 30 euro? I'm paying 200 a month on energy! (Please Tim, James, you know the numbers we're looking for)

Let's give them what they want and then require them to build it.  Let's make it such a sweet deal that every investor will want it. Let's give them a monopoly on the network in a region. Let's tell every investor that if they put a network in a region, that they can make 20% net profit every year for every euro they invest in it. For those networks that already have shareholders, like Telstra our KPN, we promise their shareholders that in stead of the current dismal 6.5% dividend and then some increase in share price, we will give them 15% or 20% dividend on every euro they have in the company.

In return we get a wholesale network. An enormous bitpipe with antenna's on top. Anybody can access it. Anybody can sell services over it. And to keep the networks honest and not too fat, we'll benchmark them internationally. Every year they will assessed based on performance. We will compare them with other regional telcos. If things go well and the telcos do a good job at both being efficient and at scaling the network well, keeping it running and implementing new features, the shareholders get a bonus dividend, if not, then a deduction. And all the whining about the return on invest will stop. Because every shareholder knows that there hasn't been a better investment than buying telco stock.

So regulators change your modus operandi. Don't ask how a theoretical efficient company would be run and then add only 8% ROI on top of it. Do it differently. Look at effective efficient companies and put a ridiculous bonus ROI on it. Pundits, don't tell how cheap it could be: you're not selling to Joe the Plumber, you're selling to Sam the Shareholder. Make someone rich and revel in the knowledge that  for 20 euro per sub per month extra you've created a platform that will billions each month.

Will be in Paris and Brussels next week (discussing M2M, switching and roaming)

I seem to have 250 followers for this blog. Some of you may be in Brussels and Paris, so if you want to let's meet up.

I am in Paris on Monday and Tuesday. Pretty packed with meetings, but there may be some time for a meeting on Monday morning and Tuesday afternoon. (and yes, I'm presenting on Monday afternoon, right when the Netherlands is playing, so I might have to wear an orange tie to express my support for the team)

I am going to present some work I have been doing on Machine to Machine and especially the problems related to switching of providers for large scale M2M deployments. Switching 100k SIM-cards is no fun. Also there is a serious problem with roaming and M2M that is related to the switching problem. Try getting a good deal on roaming for large scale M2M. It is nigh impossible. The trouble is that everything has to go through your home operator and for them it is not always in their interest to offer you a good deal and it is impossible for you to steer all your traffic to the one network that gives you a good deal and not to the other expensive ones. The solutions seems to be becoming your own MVNO, with your own SIM-cards and Mobile Network Code. Very exciting stuff and I will publish more about it in the future.

On Wednesday I will be in Brussels, so that I can attend a session on the Future of the Internet of the Oxford Internet Institute on Thursday. My calender is pretty empty, so if anyone wants to meet, please mail me.

Will be attending the WCIT2010

I will be attending the WCIT2010 in Amsterdam this week. It will host speakers like ms. Kroes, Bruce Schneier, the Dutch crown prince, several ministers, loads of CEO, CTO, CIO types, founders, etc.

If you're attending, please send me a message. (and thanks to Paul Budde for the ticket)

New blogposting at the Logica blog

I wrote a blogposting together with Gerben Mak on Innovation for ISP's for a customer and it is now also available to all on the official Logica NL blog at http://blog.logica.nl For my readers I post it here below... In Dutch, but Google has a translation:

Innovatie is hét toverwoord vandaag: dingen op een nieuwe, betere manier aanpakken, waardoor je waarde creëert. Innovatie is onlosmakelijk verbonden met transformatie: verandering van spelregels, business model, bedrijfsvoering, of beleving. Als er één wereld drijft op innovatie, dan is het de telecommunicatie. En juist hier zie je een inflatie van innovatie: elke extra verbetering lijkt minder waardevol te zijn dan de voorgaande verandering.



20 euro voor 1 gigabit en 10 voor 100 megabit, dat kost internet in Hongkong per maand. Nog een jaar of twee en in Hongkong heeft iedereen gewoon een gigabit. Met bandbreedte kan een ISP zich niet meer onderscheiden. Tien jaar lang bestond innovatie voor internetaanbieders uit het verhogen van bandbreedte. Natuurlijk, tussendoor werden telefonie en televisie, digitale tv en Video on Demand toegevoegd aan het pakket. Maar de geboden bandbreedte was het enige onderscheidende element tussen brons, zilver, goud, standard, home, premium, unlimited. Zo lastig is innoveren voor ISP's, dat ze kennelijk overal in de wereld vrijwel hetzelfde bieden, voor heel verschillende prijzen.



Riante positie
Het einde van de bandbreedte-oorlog viel te verwachten. Voor de (V)DSL aanbieders is het einde een natuurkundig gegeven. In dit universum lukt het niet meer om op een economische wijze nog meer bits uit een koperkabeltje te persen. De glasvezelkabel naar ieder huis is de natuurlijke overtreffende trap, maar gravers zijn duur en gaten graven kost tijd. Kabelaanbieders zijn gezegend met een netwerk dat langer mee kan en zij hebben dan ook in de komende jaren een riante positie. Een eenvoudig aanbod met een minimum van 50 megabit internet is al genoeg om elke aanbieder van DSL te overtreffen. De consument prefereert altijd sneller internet boven langzamer internet, maar er is een afnemende meeropbrengst.



Waarop kunnen ISP’s dan gaan concurreren, nu bandbreedte niet meer het onderscheidende element is? Wij vinden de markt voor ISP’s vergelijkbaar met die voor LCD-tv’s. Veel groter kunnen de tv’s niet meer, dus richten de aanbieders zich op de integratie van internet, video on demand en andere functies. Ieder half jaar een nieuwe lijn met nieuwe features voor dezelfde prijs. Top of the line aanbieders kunnen iets meer vragen en iets achter de goedkope aanbieders lopen, maar meer dan een jaar achterstand wordt genadeloos afgestraft. In de breedbandmarkt zal dit hetzelfde zijn. Kabel kan een premie vragen ten opzichte van (V)DSL, maar veel zal dit niet zijn. Het uiteindelijke doel zal moeten zijn om de churn – het overstappen van klanten naar andere aanbieders --  tot een minimum te beperken. De duurste klant is immers een nieuwe. Om dit te bereiken is continue innovatie gewenst. Hoe kun je als ISP dan het beste innoveren?



Cloud services
Eén gedachte is om te kijken naar meer diensten, zoals online backup en andere cloud-services, een betere en op afstand programmeerbare televisiegids etc. Dit is een interessante lijn, en we kunnen aanraden om eens bij Free.fr te kijken. Zij bieden voor 30 euro een werkelijk fenomenaal triple play abonnement. Dat is inclusief gratis bellen naar 100 landen, met een keur aan interessante functionaliteiten, tot een privé IP-TV kanaal toe. U bent uw eigen live omroep, geen enkel probleem.



Toegang
Een andere gedachte is te kijken naar de essentie van een Internet Service Provider: de toegangsdienst. Toegang tot het internet, televisie en telefonie, tot jouw diensten, tot alles waar je voor betaalt en alles wat je gratis kunt krijgen. Anytime, Anyplace, Anywhere zou het devies moeten zijn. Het is daarbij irrelevant of die ISP een rol speelt bij het leveren van die diensten. Apple kan net zo goed video on demand leveren. Maar wat de over the top aanbieders nooit zullen bieden is de toegang.

Toegang is helaas veel moeilijker dan we denken. Het begint al in huis. Eenvoudig alle verdiepingen in een Vinex woning van draadloos wifi netwerk voorzien is niet triviaal. Eén access point is niet genoeg. Meerdere accesspoints met een naadloze overdracht van de een op de ander wordt niet eens ondersteund door huis, tuin en keuken access points. Een apparaat verbinden is niet zoals het steken van een stekker in het stopcontact. Je moet codes en instellingen weten en begrijpen, niet iets wat in een gemiddelde abonnee zonder hulp van het buurmeisje lukt. ISP’s kunnen dus het leven van hun klanten vereenvoudigen door het verbinden van apparatuur te faciliteren. Een printserver, een USB-schijf als gedeelde opslag, apparatuur voor zorg aan huis. Bijkomend voordeel: een klant die al zijn kabeltjes aan de set-topbox/kabelmodem heeft hangen is minder geneigd naar een ander te gaan.

Toegang buitenshuisToegang om het huis en buitenshuis is nog een stap moeilijker. Het gaat hier om verschillende vormen van toegang. Zo is de vraag waarom als we onderweg zijn we niet dezelfde gebruikerservaring kunnen hebben alsof we thuis zijn. Levert de toegangsleverancier een eenvoudig te gebruiken VPN bijvoorbeeld, zodat thuis en buiten één worden en de klant altijd alles kan doen wat hij thuis ook gewend is? Kan de klant bij de afgenomen diensten, zoals bijvoorbeeld de telefonie en televisie? Als telefonie toch VoIP is, doet dit het dan ook vanaf een laptop of mobiel? Of het uitgebreide TV-pakket? In de USA wordt nu gewerkt met een TV Anywhere-pakket, waarbij de gebruikers van dure TV-pakketten op reis via IPTV toch de programma’s kunnen bekijken waar ze voor betaald hebben, bijvoorbeeld de Amerikaanse NFL.


Wifi delen
Een andere vorm is toegang tot netwerken. Waar verbind je mee als je onderweg bent? Wat kan een ISP doen om die ervaring te verbeteren? Een optie die in Frankrijk en in Groot-Brittanië aangeboden wordt, is om het wifi-accesspoint dat in de modem ingebakken zit te splitsen en te delen met andere gebruikers van dezelfde aanbieder. Franse internetters hebben opeens toegang tot 4 miljoen Wifi-accesspoints. Door het scheiden van het verkeer worden Quality of Service, veiligheidsproblemen en vragen rond aftappen afgevangen. Het netwerk zal niet zo naadloos zijn als GSM/UMTS, maar daar waar het werkt is het wel direct sneller dan LTE. Roaming over andere wifi-netwerken in binnen- en buitenland zou het verhaal compleet maken.


Kortom, innovatie in de telecommunicatie is toe aan een nieuwe dimensie – die van verbreding en uitbreiding van het dienstenpakket, gericht op behoud van klant, ook buiten de directe omgeving van het aansluitpunt. Daar is nog veel waarde te creëren op het gebied van toegang, gemak en servicebeleving.

What Apple's iPad tells us about mobile roaming

At this moment I'm working on various jobs that all are linked around the theme Machine to Machine communication. Most of it is for clients so I can't be too open about it. However the iPad and it's roaming deals give some good food for thought on how difficult it is to get a good roaming deal.

Apple is without a doubt one of the behemoths of the mobile world. It can demand that AT&T changes its game in exchange for an exclusive deal on the iPhone. But it can't when it comes to roaming. Steve Jobs just isn't powerful enough (hoping to tease him to prove me wrong.) (Updated to make it clearer for the reader that roaming on the iPad isn't a game changer)

Some people thought that they might come up with a game changer for mobile roaming as well. The best example I have found was from the Macrumors forum and pointed to me by Sam, who is quite the roaming expert himself. A chap called Mike Ruggeri said the following:

I just went to the Apple Store to check this all out. The Apple tech person told me that the system is open. So you will not be moving micro chips around. Instead, you will cancel your AT&T plan before traveling and when you get to your travel destination, just click on settings and the iPad will tell you which national companies there offer a monthly plan. You can choose one, see what their rates are, and if your like the rates which are based on national rates and not huge AT&T international roaming rates and huge per minute charges, you can then just click on the monthly rate and company you like and you are in. No looking for stores to find microchips and swapping out chips.

It sounds so simple, right? But we now know it isn't this way as AT&T has just said how much it will really be:

• 20 MB of data for 30 days for $24.99 (ex. VAT)
• 50 MB of data for 30 days for $59.99
• 100 MB of data for 30 days for $119.99
• 200 MB of data for 30 days for $199.99

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/04/30/businessinsider-heres-how-much-itll-cost-to-use-your-ipad-3g-overseas-2010-4.DTL#ixzz0mmSNbiTH

This is hideously expensive, though not necessarily more than what you would pay under EU regulation, which currently stand at 1 euro per MB excluding taxes, going down to 80cent this year and 50 cent next year. (Attention: Pat rightly informed me in the comments that this is the wholesale charge that networks charge each other. Your network may charge you any arbitrary amount as the retail charge.) Yes, contrary to the situation with voice and SMS where the retail charge is capped, with data someone could introduce a 10 euro per MB charge and still follow the rules of the EU. )

Unfortunately it is impossible for Apple to negotiate roaming for its customers in various nations itself. If it could it would be able to negotiate domestic rates which could according to Ericsson go as low as 1 euro per Gigabyte and still make the network a profit. Apple now has to go through AT&T for it's USA customers and has to accept any price AT&T is quoting. 

The reason it seems that Apple can't use its purchasing power to negotiate better deals or to open up the market so that customers can negotiate a local deal by selecting an operator on screen when in another country is that it isn't a member of the GSMA. Roaming deals can only be negotiated by members of the GSMA it seems. And to be a member of the GSMA you have to have a spectrum license in some country. Without a license no GSMA membership and without GSMA membership no roaming deal. 

The need for having a spectrum license to get a roaming deal is quite paradoxical. If you have spectrum in an area, why would a spectrum license holder need roaming. It is when you don't have spectrum that's when you need roaming. 

There is quite a bit more to discuss in this area, but I've got some more stuff to do :-) Some things to think about are the demands for reciprocity that are the basis for roaming deals between networks and the transparancy in prices for roaming within the GSMA. Want to know more? Have a look at this paper by the OECD and this one by the Dutch OPTA and at my simple proposal for mobile roaming 

5 Gigabits over Cable is not news

It is all over the blogs (Gigaom, Lightreading) and probably the newspapers... Cablelabs is researching 5 Gigabit over cable.  This is something that was mentioned in an OECD Study I did 4 years ago. The problem isn't getting the bits on the cable. The problem is everything else, like getting rid of tv-channels. http://www.oecd.org/dataoecd/49/8/40390735.pdf (page 18) has this to say about it. 

With current technology it might be possible to send up to 5 Gigabit/s (upstream and downstream combined) over an HFC network if no analogue or digital TV-channels were broadcast and all bandwidth was used for data networks.

It becomes harder with the fact that the upstream channel is limited by the current filtering on the line to 120mbit up, shared over all users. So it would require a major rework of the entire plant to make good use of it. Add to this the 100-1000 users per cable headend and the real amount of bandwidth per household becomes more limited. So either you do very funky multicasting over IP (do remember that IP is encrypted per user, so that you can't see what your neighbour saw) or the network crashes if too many people watch tv at the same time. The cable network is very good at what it does now: Broadcast with a bit of IP. Going all IP with no broadcast however is a totally different ball game. 

All in all I am still a happy user of UPC Docsis 3, I am still a happy supporter of FTTH for all, I am still waiting for a good FTTH offer to my home and I still await any great new technological developments on any network.... This just wasn't it, but unfortunately journo's will parrot eachother for days and consultants will parrot it for months and lobbyist will say it for years... (but now you know better)

Fiber to the Container, or how to promote KPN fiber

KPN installed two containers at strategic locations in Almere (a third one will come later). The containers contain a demo site of KPN's fiber proposition. The containers are manned by at least one and sometimes two KPN people, who explain and give demos. It's just KPN and not any of the other Glashart providers (XMS or Tweak).

The locations are quite well chosen. In Almere Buiten it is next to the Albert Heijn, Hema and Lidl. For those of you not Dutch, these are the traditional three of Saturday shopping. Albert Heijn is the best supermarket chain in the country and a huge crowd puller.  In Almere Parkwijk the location is next to the rail way station and in front of the Albert Heijn. The third location is unknown to me, but I could imagine another Albert Heijn to locate the container next to.

To me it shows that KPN is starting to become more serious about selling FTTH. I still find it strange that it is under just one brand and not its premium brand XS4ALL for instance, but at least its a step.

Updated: Mobile Net Neutrality in Europe: Google caught freeloading again? ;-)

UPDATE: Seems the quote of Deutsche Telekom was taken out of context, thanks Chris

With almost identical quotes to the chairman of AT&T a couple of years ago chiefs of Telefonica, France Telecom and Deutsche Telekom told the Financial Times that Google is a freeloader.

César Alierta, chairman of Telefónica, said [..]: “These guys [Google] are using the networks and they don’t pay anybody,” he said.

Stéphane Richard, France Telecom’s new chief executive, said: “Let’s see the development of digital society in terms of the winners and the victims. And today, there is a winner who is Google. There are victims that are content providers, and to a certain extent, network operators. We cannot accept this.”

René Obermann, Deutsche Telekom’s chief executive, said Google and others should pay telecoms groups for carrying content on their networks.“There is not a single Google service that is not reliant on network service,” he said. “We cannot offer our networks for free.”

I wrote my article on peering and transit with the AT&T quote as a starter. I sometimes regret it, because it makes it look like a net neutrality paper, but then again, it is here where the lack of knowledge of how peering and transit works continuously causes pain. 

It strikes me time and again that telco's have trouble seeing cause and effect. They see Google introducing a service and then see their traffic going up. So it must be Google that is causing this. But correlation is not causation. It is only when users click on a link that Google starts sending traffic to their network. It is their user who wants to use their network to get access to something that is big or small, but is located on Google's network. Wouldn't it be more fair to say that the mobile co's should pay Google for the increase in its transit bill instead of the other way round? Given the discussion on mobile termination rates, it would be fair to say that the mobile industry is of the opinion that the initiator should pay. Well, you can't argue that Google initiates the transaction, so it's the user then who will pay. 

The funny thing is also that everyone is always picking on big G. Big G of course has big shoulders and is used to some bullying, but it kind of ignores the fact that there are 190 million websites all over the world. I would think that Icanhascheezburger is a culprit in using telco websites too.. why do we never see Telco execs showing the devastating effects of LOLCATZZ picturez.. on their network. 

So telco's please tell us how you are going to pay 190 million for the network usage that your users cause?