Hi guys,
Fairly uneventful notes. Hopefully by the time my gathering is over, the notes might make sense. I have absolutely no feel for the market. I spoke with an industry insider who felt that Vonage or Net2phone are having difficulties because of marketing costs. My thoughts there was that Ebay has over 180M registered users. Hence, I guess they could blast to those 180m+ "registered users." The industry insider ( i am not familiar with this persons technical expertise or reliability), mentioned that no company to date has made money in the VOIP field. We discussed possible comparisons to optical infrastructure overspending in the late 90's. Industry insider mentioned the Voip wannabees of Yahoo, Google and Microsoft. Mentioned that ebay is now being considered a telecom company. This will certainly be interesting to watch. Here are some notes below.
Any here have technological opinions or future success or failure of Skype (owned by ebay)
peace ya all , happy new year
ron
January 20, 2006 some Skype notes (46.52)
1. Doing some Skype research. CNET has decent reviews. Certainly concerns, but concerns seem more of VOIP security infrastructure concerns and not Skype specific. From the little I read so far, it seems as though Skype is geared into all security concerns, and looking to correct them. I did a search for Skype and found the following tidbits:
a. "Fueled by the growing popularity among consumers of audio communications over the Internet, using services such as Skype's, Logitech's retail sales of PC headsets grew by 90 percent year-over-year." (LOGITECH INTERNATIONAL SA 1/19/06)
b. "We do not compete with providers of free VoIP service, for several reasons. Firstly, all free VoIP providers (e.g. Skype, Yahoo and Microsoft) offer only computer to computer or computer to phone services. With our service, all one needs is a high speed connection (via a fixed line or wireless modem), an ibox, a power source and a telephone – a computer is not necessary. Secondly, the free services provide a software solution. We provide a hardware product that our customers can take with them to make calls from other locations. Once activated, the ibox can transmit and receive data via Galaxy Telecom's server/network. The ibox itself is portable and can be connected to another high speed connection/modem and telephone at a remote site. Finally, we have a very specific market (hotels, cable companies, SOHO enterprises, multi-office enterprises, etc.) that we know well and we focus on selling to this specific market, while the providers of free VoIP service target the extremely broad universe of all PC users." (PROJECT ROMANIA INC. 1/6/06)
c. "There are many competitors in providing VoIP services in America today. These Companies include AT&T, Vonage, Skype, Yahoo and Google. VoQal feels that the Company has several advantages that will allow it to compete successfully against large competitors. Most of the Company's competitors have invested huge amounts of money in infrastructure to provide global VoIP services to their customers. We anticipate that they are forced to keep their gross margins high to help amortize their capital investments, they must also maintain low volume low profit services and connects and subsidize those connections through their higher volume more profitable long distance routes." (VOQAL COMMUNICATIONS INC 12/20/05)
d. "International calls made with the PC to regular landlines are already cheaper with BT Communicator than with rivals such as Skype. However, as a Christmas present to its customers, BT will be offering free calls throughout the festive holiday to any landline in 30 different countries." (BT GROUP PLC 12/19/05)
e. "There has recently been substantial market interest in providers of Internet telephony services, possibly suggesting that a sale of Net2Phone could arouse similar interest. In particular, eBay has recently announced an acquisition of Skype for between $2.6 billion and $4.1 billion. Vonage raised approximately $200 million in a private equity offering in May 2005 and is reportedly considering a sizeable initial public offering. However, IDT believes that the Skype and Vonage situations are not comparable to Net2Phone's circumstances, primarily because these companies have spent considerable sums on securing their subscriber bases, which are considerably larger than the subscriber base of Net2Phone. " (NET2PHONE INC 12/13/05)
f. " The telephony market is characterized by increasing price reductions and commoditization of voice and related service offerings. The Company believes that successful VoIP service providers will need a variety of value-added services in order to favorably compete in these markets. Upon the development of adequate capitalization it is the intention of the Company to focus on the development of these value-added services along with the addition of new customers and the increased penetration of its current customer base. Ecuity's present and future competition in the VoIP market includes several large and well-capitalized companies such as AT&T, Sprint, MCI, Allegiance, SBC, Qwest, Vonage, Skype and numerous others. Competition is also expected from cable companies such as Comcast, Charter, Cox, as well as telecommunications companies with cable operations and operating agreements, including SBC and Qwest and internet and internet related service providers such as AOL and EBay. Virtually all of the Company's competitors have much greater financial resources and capabilities than Ecuity." ( Y3K SECURE ENTERPRISE SOFTWARE INC 11/17/05)
g. "Skype Joint Venture (“JV”) — On September 5, 2005, we announced that we had established a joint venture with Skype to develop next-generation communication services in the mainland China market. The initial stages of our JV will be to focus on the development of a more localized TOM-Skype client for the mainland market and to grow our user base. At the end of October 2005, we had over 5.2 mn registered TOM-Skype users, up from the 3.4 mn registered users we had at the time we announced the JV. In the coming quarters, we also hope to begin to develop premium services over the TOM-Skype platform." (TOM ONLINE INC 11/15/05)
h. "We anticipate increased revenue and demand to be generated in our near-term horizon from services including VoIP, increased roaming, location-specific applications, targeted advertising platforms, high-bandwidth content delivery and management, and access to proprietary content. With respect to VoIP, a small but steadily growing customer base has been utilizing VoIP technologies and services over our Wi-Fi networks, and we expect this trend to improve as additional services and VoIP-enabled devices are propagated into the marketplace. This trend is in keeping with broader industry trends, such as the recent Skype/Boingo VoIP over Wi-Fi trials which will include ICOA's assets in the near future. With respect to ancillary revenue from roaming, ICOA's recently achieved national scale provides the company with attractive locations of strategic roaming value to other wireless service providers. Our networks were designed as neutral-host specifically to prepare for roaming, a strategy which maximizes revenue-potential from the existing asset base." (ICOA INC 11/14/05)
i. "Linksys, a division of Cisco Systems, and Skype teamed to launch a new cordless handset designed to enable users to place Skype Internet phone calls while sitting at home or at the office. " (CISCO SYSTEMS INC 11/09/05)
j. “There is a revolution taking place in voice communications. Actions such as eBay's announced plans to purchase Skype are fueling the inevitable change in voice communications,” Carabelli said. “For well over a year, we have been positioning Pac-West to compete and grow in this emerging environment by offering the required services to allow any company to become a custom phone company.” (PAC-WEST TELECOMM INC 11/3/05)
k. “This quarter was also marked with many successes. We began deployment of one of the largest VoIP broadband networks in the world with our partner Aksh broadband and we won an expansion with Cable and Wireless in Panama, which is experiencing significant growth as a result of our I-Master prepaid solution. Additionally, we introduced exciting new market-driven technologies such as the Skype Peer to Peer monitoring and control application and the Metronet bundle solution for metro broadband networks. The Skype filter has generated a great deal of interest from the industry as well as our carrier customers and the Metronet bundle, despite its recent introduction, has already achieved strong market interest as evidenced by some early wins. In conclusion, we have the people, products and market demands to show continued growth and reach our goal of EBITDA profitability as soon as possible.” (VERSO TECHNOLOGIES INC 10/31/05)
l. "So Skype. In addition, the third quarter we announced two new and important new business initiatives. Firstly, as many of you know, we announced our 51% to 49% joint venture with Skype to be all of TOM/Skype in mainland China. At the end of October we had over 5.2m registered TOM/Skype users, up from the 3.4m registered users at the beginning of September when we announced the joint venture.
Our first target for Skype is to continue to grow the unit base and continue our discussions with the Chinese telecom operators on ways we may be able to cooperate on Voice over IP value-added services. It is our hope that over the coming quarters we will develop premium Skype services for the mainland China market, but we will only do so where the regulations allow us to do that.
For the mobile payment issue, UMPay, in addition to Skype, we also announced our strategic cooperation with UMPay to develop mobile payment services in China. For those of you who are not familiar with UMPay, UMPay was founded in 2003 by China Mobile and China UMPay as the only inclusive payment gateway between China banks -- China's banks' card system and the China Mobile.
We believe that this is a largely an important milestone for our Company, as we hope that through this cooperation we will be able to complement our leadership in mobile content by broadening our service offerings to our users into mobile functions, firstly as payment as well." ( Q3 2005 TOM ONLINE INC Earnings Conference Call)
m. "Yes, I mean-- Well, when you get to my age, everybody keeps you up at night, David. I think that-- well, look, if this is a broader question, this is “The Economist” article with Skype and VoIP and everything else? Look, all those technologies, sometimes people call that technologies. All those applications, let me deal with them in a broad sense.
I think they all tend to be disruptive products and services that interfere with revenue streams. So let's look at Skype. Skype is pretty cool. They've got a software. They know how to-- people could download. They've got millions and millions of people that do it, but when Skype merges itself or gets bought by eBay, that reinforces our belief in something, because what it says is that their value proposition doesn't work unless they broaden the product and service to the customers.
They will need a broadband connection. So when someone says voice calls will be free, the problem with that is somebody still has to have a broadband connection and the network to pay for it in access. So I think that-- I look at a Skype as an application that, over time, drives demand for broadband. We'll offer similar things as part of our package, but also the fact that Skype marries itself up to eBay, I'm sure that Google and Yahoo! and everybody else will figure out a way to try to add some value to their basic package, because there's a cheap way of providing a feature and functionality, but everybody's going to require the broadband. So I think that comes.
The VoIP providers, the way I would comment that is that's also a cool thing. You know, when you introduce a new product in the market place, you're always going to get the technology-- technocrats, so to speak, to shift right way. So you're going to 10% or 15% of the market to try it.
And so our view is this. The stand-alone, over-the-top, single-product voice-- voice providers will be OK. I mean, they'll scale to a certain point. Their business models will-- will run into a little difficulty and then they'll have to deal with it by selling or whatever they do.
If you look at Vonage, I think that they just announced they've got a million customers. They have a significant number of them internationally, so we're not particularly worried about, while it's annoying and they do OK, they're not eating away all our growth. They're doing-- I mean, they'll run into some headwind at some point.
Where VoIP becomes an issue is when you bundle VoIP with a broadband connection you do shift the way we make money away from the old voice to a data platform. And the answer to that is, the cable companies are going to do it. That's their legitimate entry into the market. That's the reason why we have gone after the stand-alone teleco line with a $14.95 DSL connection and we've gone after the building of the FiOS.
So I think these things are all things that eat away at growth, but they aren't fundamentally things, David, that will displace the strategies we've put in for the future and I think that's kind of the way I look at it. So you never discount the capabilities all of these entrepreneurs are putting into it, but we have a core response. It's superior wireless business and it's a broadband business and I think we can-- we can achieve success doing what we do." (Ivan Seidenberg, Verizon Communications - Chairman and CEO 09/22/05)
n. "We're very happy with the partnership. It's actually not applicable to Webcams today. It's applicable to headsets. And Chris said, the PC headsets has been a big component of our audio growth. I expect that in general, Voice over IP will have a huge -- the combination of Voice over IP as people refer to it, Skype for other services, as well as MSN 7.0, which is video and Voice over IP if you want. So it will be a big driver of headset and Webcams in general. Our Skype partnership is currently a headsets partnership. We are looking forward to working with Skype and others. There is so much interest in video and audio that we could spend another two hours talking about the opportunities in that space. I will leave it at that. I would say that everybody wants to do video and audio for the time being. Microsoft is the only one that does it well because it's powered by our technology. Other things could happen." ( Guerrino De Luca, Logitech International - President & CEO 4/19/05)
o. "I wish I understood their business model or the revenue model. Bundling is the best answer to that because the consumer wants a convenient, one-stop, complete service. How one sustains a revenue model with no revenue, I don't know. And so we're kind of all scratching our heads. Clearly, Vonage has been around awhile and has not gotten really much traction vis-a-vis impacting the VoIP business domestically. It's a question of whose facilities are going to ride (ph) them. It's kind of the over-the-top question versus the bundle. Are there going to be services that are available to the consumer over the top? And does that shift the pricing to where the facilities-based guy gets more money for one class of service and discounts the other one to the point where he makes the over-the-top offer less attractive. So I think it's a shifting around, perhaps, but there are nominally, what, 30 million Skype customers in the world, and I don't know that that it's impacted any cable models yet domestically." (John Malone, Liberty Global, Inc. - Chairman 09/28/05) |
