Wal-Mart Ventures Into VoIP

If your Aunt Tilly hasn't heard of VoIP yet, she will soon, at least if she's a Wal-Mart shopper.
The retail giant Monday put its considerable weight and consumer reach behind the IP communications market by adding Skype VoIP equipment and pre-paid Skype service cards to its shelves.

The deal foists VoIP into the mainstream spotlight and has the potential to expose the Skype service to a huge crop of potential new users.

Wal-Mart has opened Skype-branded sections in the electronics departments of 1,800 stores across the United States, where it will be selling Skype-certified hardware including headsets, Webcams and handsets from vendors such as Plantronics, Philips and Logitech. Customers can use the hardware to supplement their Skype service, which offers free Internet VoIP calls between members and low-cost calls to other phone lines.

In addition, Wal-Mart is the first and only U.S. retailer to offer pre-paid Skype cards for the VoIP service provider's domestic and international calling plans. One card offers a three-month subscription to the Skype Unlimited Calling Plan, which enables users to place unlimited Skype calls to landlines and cell phones within the U.S. and Canada for $8.85. Another $20 pre-paid card can be used to place international calls at rates as low as 2.1 cents per minute.

"The Skype hardware and pre-paid cards are a great fit with Wal-Mart because they offer long-term money-saving solutions at the right time for many customers -- parents, grandparents, college students and military families," Kevin O'Connor, vice president and general merchandise manager at Wal-Mart, said in a statement.

While Skype is primarily known as a consumer-focused service, it also offers features for business users, including its Business Control Panel, an online tool for managing multiple accounts.

While there is a certain segment of the SOHO market that could be a fit for Skype, it isn't posing much threat in the small business market at this point, solution providers said.

"I'm not too worried about Skype," said Raymond Benoit, president of RTM Communications, a solution provider in Merrimack, N.H. "Anybody with five or more phones [that wants a hosted service] should go with a service from a carrier ... Five or below can do whatever they want, but they'll be on their own. They won't be getting support from Wal-Mart."

Lack of support is one of the key factors that will keep Skype and other hosted VoIP services out of the business market, said Ed Fineran, president of Atlantech, a solution provider in Silver Spring, Md.

Telecommunications service provider Windstream said Tuesday it agreed to buy broadband Internet service provider CT Communications for about $585 million including debt, in a bid to expand its business in North Carolina.

CT shares jumped $9.80, or 45 percent, to $31.38 after the announcement of the deal, which values CT at $31.50 per share and represents a premium of 31 percent over its previous 30-day trading average, according to Windstream.

With this deal, expected to close in the second half of 2007, Windstream said it expects to realize free cash flow improvements through annual cost savings of about $30 million as well as cuts in capital expenditures.

CT Communications posted $179.2 million in revenue and $57 million in operating income before depreciation and amortization (OIBDA) in the year that ended March 31, Windstream said.

Windstream shares were up 12 cents at $15.04 in morning trading on the New York Stock Exchange.

Google to target ISPs with Google Apps package
Google announced today that it will be making its Google Apps for your Domain available to ISPs. Google Apps Partner Edition is targeted specifically at service providers, which will allow them to make Google's collection of web apps available to thousands of subscribers as their own branded services. "From the beginning, we envisioned making Google Apps available to any organization that might want to offer this innovative set of services to its employees, customers, students, members, or any other associates of the organization," Google Apps product manager Hunter Middleton said in a statement. "Today, we're excited to take another step in that direction by releasing a version of Google Apps specifically designed for ISPs, portals, and other service providers, whether you have a few thousand subscribers or over a million."

The Google Apps collection now includes Gmail, Google Talk, Google Calendar, Docs & Spreadsheets, Page Creator, and the Start Page. A presentation app mimicking Microsoft's PowerPoint is not available yet and is expected this summer.

Google Apps Partner Edition, like Google Apps for Your Domain, offers ISPs and service providers a low-cost alternative to developing and maintaining their own services to subscribers. Using Google's apps require minimal setup costs and low overhead and would relieve the ISP from having to maintain its own e-mail servers—Google will do it for them. Companies are even able to make Google's services look however they please by branding them with their own company logos and information.

Google Apps for Your Domain has been free to businesses in the past, but the company has said that it eventually plans to charge "a few dollars per month" for its use. Service partners, however, may be required to pay for the services right away. "We designed Google Apps Partner Edition to meet the specific needs of service providers—affordably," writes the company on the Partner Edition web page. Although Google does not specify how much it plans to charge service providers, the fees are likely to be based on a scale of subscriber numbers.

Comcast Super Modem Hits 150 Mbps
Comcast's super modem is based on new broadband technology called DOCSIS 3.0, which was developed by Cable Television Laboratories. It bonds together four cable lines but is capable of allowing much more capacity. The lab said it expects manufacturers to begin submitting modems for certification under the standard by the end of the year. Comcast Corp. Chief Executive Brian Roberts dazzled a cable industry audience Tuesday, showing off for the first time in public new technology that enabled a data download speed of 150 megabits per second, or roughly 25 times faster than today's standard cable modems.
The cost of modems that would support the technology, called "channel bonding," is "not that dissimilar to modems today," he told The Associated Press after a demonstration at The Cable Show. It could be available "within less than a couple years," he said.

The new cable technology is crucial because the industry is competing with a speedy new offering called FiOS, a TV and Internet service that Verizon  Communications Inc. is selling over a new fiber-optic network. The top speed currently available through FiOS is 50 megabits per second, but the network is already capable of providing 100 Mbps and the fiber lines offer nearly unlimited potential.

The technology, called DOCSIS 3.0, was developed by the cable industry's research arm, Cable Television Laboratories. It bonds together four cable lines but is capable of allowing much more capacity. The laboratory said last month it expected manufacturers to begin submitting modems for certification under the standard by the end of the year.

In the presentation, ARRIS Group Inc. chief executive Robert Stanzione downloaded a 30-second, 300-megabyte television commercial in a few seconds and watched it long before a standard modem worked through an estimated download time of 16 minutes.

Stanzione also downloaded the 32-volume Encyclopaedia Britannica 2007 and Merriam-Webster's visual dictionary in under four minutes, when it would have taken a standard modem three hours and 12 minutes.

"If you look at what just happened, 55 million words, 100,000 articles, more than 22,000 pictures, maps and more than 400 video clips," Roberts said. "The same download on dial-up would have taken two weeks."

Other cable industry executives, including Time Warner Inc. Chief Executive Richard Parsons, News Corp. President Peter Chernin and Viacom Inc. Chief Executive Philippe Dauman, cheered the demonstration during a panel afterward.

Brian Dietz, spokesman for the conference host, the National Cable and Telecommunications Association, said the demonstration was the key technological advance showcased at the conference.

"It's an exponential step forward and we're very excited," Roberts said. "What consumers actually do with all this speed is up to the imagination of the entrepreneurs of tomorrow."