Earlier in the week, I wrote about the the latest OECD broadband report which shows that as of June 2008, Canada continues to hold the number 10 position, based on connections per 100 people.

As you know, I like to view the reporting of OECD numbers with a grain of salt.

We used to gaze enviously at Korea as a pace setter for broadband connectivity. In Canada’s heyday, we were second only to Korea in broadband penetration. In the current report, the OECD points out that “Korea’s fibre penetration alone (12.2 per 100 inhabitants) is higher than total broadband penetration in 5 OECD countries.”

In preparing material for a talk next week, I noticed an interesting situation when combining a couple of the OECD’s tables.

Something is strange with Korea’s reporting of household data. I looked at the OECD’s tables for households with computers [ Excel, 50.5 KB] and households with broadband [ Excel, 37.5 KB] and tried to combine them to look at the percentage of households with computers that have broadband internet access.

One would think that homes with computers would be the asymptote for broadband penetration – why would a household subscribe to broadband if you don’t have access to a computer?

Well, apparently in Korea it doesn’t work that way. In fact, 20% of their broadband enabled households have no access to computers.

What is going on there?

When you dig deeper, it turns out that Korea’s household broadband data includes broadband enabled mobile phones. Since virtually every phone in Korea is a 3G phone, every household with a mobile phone is scored as having broadband access.

Sometimes, you need to scratch beneath the surface.

By the way, as a percentage of homes with computers, Canada’s broadband penetration ranks 6th in the OECD, behind Korea, Iceland, Japan, Belgium and Netherlands.

It strikes me that telemarketers seem to stepping up the pace in this last week before compliance with the DNCL is required. I know that I am getting a lot more calls than ever before.

Last week, a call centre in India said they were calling to “upgrade my phone service”. Well, I couldn’t very well hang up on that kind of offer, could I?

They claim to have been calling on behalf of Yootel, a VoIP company that purports to be based in Toronto, although the phone number on their website goes to a message saying “we’re sorry your call cannot be completed as dialed.”

The call centre insisted that the Yootel service would work in case of power failure, because of battery backup in the VoIP gateway device. When I asked how they would keep my broadband internet running during a power failure, the answer kept going back to the battery in the VoIP Gateway. Finally, the agent agreed to get back to me after he consulted with their technology department.

Although Yootel’s website warns that the service won’t work during power outages, the call centre was insistent that the website was wrong. They gave me a Toronto phone number that works, but it doesn’t seem to reach real people, even during normal business hours. I finally reached a live human at Yootel who confirmed that there is no battery backup – the service doesn’t work when the power is out.

Hopefully, not too many consumers are being misled by the outbound centre’s kind of sales pitch. Over the top VoIP isn’t going to work during a power failure, no matter how many times the salesman repeats that the IP gateway has a battery.

Hopefully, it won’t take a catastrophe that could damage the reputation of the entire segment. In the meantime, consumers should do their homework. With any luck, this blog posting will score high in their Google search.

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Yootel, VoIP, power

The latest OECD broadband numbers [ Excel, 47 KB] show that Canada leads the world in cable broadband penetration, with 14.89 subscribers per 100 people, as of June 2008.

Will this statistic be reported anywhere else?

Canada has maintained its position in overall broadband penetration – at number 10. As I have written before, since Canadian household size is larger than the OECD average, there are problems with the OECD numbers, which show connections per 100 people, not connections per 100 households.

The OECD did produce a table of “Percentage of households with broadband access” [ Excel, 37.5 KB] , but the data is incomplete. Using 2005 numbers (the last complete year of statistics), Canada ranks 6th, behind Korea, Japan, Iceland, Netherlands and Denmark.

Although a report we have seen is saying that Canada’s performance in broadband penetration doesn’t compare well against Australia, we beg to differ. In 2005, Australia had only a quarter of its homes connected using broadband; Canada had more than half.

Canada has to work on improving broadband affordability for its under served population. But for today, let’s celebrate being number 1.

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Update [October 28, 8:40 pm]
Peter Nowak’s covers the story at CBC Online. One of the comments on his story doesn’t understand the relevance of the leadership in cable penetration rates.

Wot? A high ratio of cable to DSL is considered meaningful? They’re simply two ways to provide the same service.

Of course, my readers didn’t comment about this point because you understand that strong cable internet is evidence of the level of competitiveness in the retail internet market. 

How will telecom carriers be impacted by the global economic conditions?

There are a few news items from the past week that present a variety of perspectives.

According to the Globe and Mail and CTV, Solutions Research Group has a study that indicates that consumers view their mobile phones and internet services as essentials. Canadians will give up other expenses, such as dining out, concerts and movies before dropping these communications expenses.

However, premium cable and residential wireline phone service ranked number 5 and 7 among targets for savings in family budgets, so it isn’t an entirely rosy picture for the major carriers.

Many consumers, with minor exceptions, view these as essential utilities, like water or electricity

Another news item presents a different perspective, examining enterprise purchases of communications services.

Telephony reports that Level 3 believes that its current sales slowdown is disconnected from underlying demand. According to James Crowe, the CEO of Level 3,

We believe this increase in time from identifying an opportunity to the execution of a firm order does not indicate a decrease in demand. If we’re right, you’ll see a one-time decrease [in revenue]. If two months ago, the sales cycle is 60 to 90 days, and now it’s 70 to 100 days, as that filters in, it doesn’t affect the overall demand or pipeline — if we’re accurate.

That is a big “if.”

In its earnings conference call last week, AT&T reported some softness in enterprise voice and data, but said

We continue to deliver high-teens growth in enterprise IP data revenues. Sales flow was solid and a number of major contracts signed in recent months are beginning to ramp.

In his closing comments, AT&T’s CFO Richard Lindner said that in obviously challenging times, he believes it prudent to be conservative, to manage and reduce expenses, and to be disciplined with capital investment and to preserve cash.

With these events as context, we saw Shaw announce that it is not planning to move ahead as quickly as some of the other AWS spectrum holders.

How will other carriers respond to changes in demand for their portfolio of services?

Former New Brunswick premier Bernard Lord has been named president of the Canadian Wireless Telecom Association.

He led the New Brunswick with two successive majorities from 1999 to 2006 and was most recently Senior Counsel at McCarthy Tétrault.

The Association is responsible for representing the wireless industry to the government and various regulatory agencies, such as the CRTC. Issues include use of spectrum, the use of mobile technology in cars, tower location and other areas of industry-wide advocacy.

The story first broke yesterday in papers in eastern Canada. The Saint John Telegraph Journal wrote:

Lord was premier for seven years and is close to Prime Minister Stephen Harper and well-known to many of the MPs formerly in cabinet or likely to be appointed.

Lord most recently served as one of three co-chairs of the federal Conservative party campaign.

Among the challenges for the new association leader will be recruitment of new members – welcoming the new AWS spectrum holders under the industry’s umbrella. While the new entrants may harbour some resentment for the CWTA’s lobbying during the spectrum consultation, there are many issues for which the common interests of the industry should unite all of the players.

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Update [October 24, 9:20 pm]
Peter Nowak’s story at CBC Online includes a segment on why the new entrants should join the CWTA:

Industry analysts said newcomers would have much to gain by joining the CWTA.

“They’re concerned with future spectrum concerns, the ability to build towers and ensuring that legislation for driving and using cellphones is done with full knowledge instead of emotion,” said telecommunications consultant Mark Goldberg. “All of this can be done with so much more credibility if presented on an industry-wide basis.”

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CWTA, Bernard Lord