Posted by Cloud Net on Fri, Jul 30, 2010 @ 04:33 AM
Telecoms companies in the 1990s used to be regarded as high
flying tech stocks. However, many have been badly run and most destroyed huge amounts of value by overpaying for acquisitions at the height of the dotcom boom. Added to these factors are rising capital expenditure costs, stricter regulation and new technologies such as VoIP destroying margins for traditional telecoms companies.
If that’s not enough new fibre networks represent another drain on company finances since they require heavy investment to ensure that these companies keep hold of their competitive positions.
That is why for example BT is doing all it can to make its cash position look more attractive to investors: from altering billing dates, to altering the cheap period for calls to simply raising prices.
It’s thanks to these billing moves that companies such as Cloud Net, which offer high quality VoIP business phone systems, become more appealing to small businesses looking for straightforward pricing.
Regulation has controlled many aspects of telecoms profits for years and the government can be seen to be improving the situation for consumers by leaning more heavily on the companies. The cuts imposed recently on mobile termination rates are a case in point.
Cable and Wireless recently announced a profit shortfall because of a reduction in government spending. The share price reacted with a 25% fall.
Brokers are regarding telecoms as utility companies sharing their high borrowings with strong cash flows which enable the debts to be serviced. However, regarding them as utilities does mean they are not stocks that need to be held in a portfolio. Indeed as a utility stock their profits are not as guaranteed as say, an electricity company. After all you need light at home you don't need to make that phone call in the same way.
The technology that drives the internet is both a blessing and a curse for the Telco’s. On the one hand the ever increasing demand for data is a positive thing requiring ever more fibre but on the other it does need more capital investment. The charging models are complex and there is a fragmentation of the network with some companies cherry picking parts of the network to develop and sell, which puts pressure on the large incumbents.
The bottom line is will I be investing in BT, Cable and Wireless, Talk Talk or Vodafone in the near future? The answer is that although the stocks are cheap - they are cheap for a reason.
Written by David Hill, Chairman, Cloud Net
Posted by Cloud Net on Wed, Jul 28, 2010 @ 04:05 AM
If you are a BT Business customer you may be told: “If you're moving out of the area covered by your existing telephone exchange but want to keep your existing number, we can arrange for your old number to be redirected to your new number for an additional fee.” The additional fee depends on your contract with BT. However you will have two sets of numbers and pay for calls to be diverted for ever.
BT alternatively will play a message to any one calling your old number “we have moved and our new phone number is….” To avoid missing important calls from customers and suppliers who still have your old number on file, you will want to pay for this service for at least a year, which can mount up and is a waste of money.
This is not an ideal situation to be in – far better to preserve your existing numbers and have the calls go directly to your new address. That way at least your existing customers don’t have to learn anything new and your phone numbers in all the marketing materials stays correct.
With Cloud Net small business VoIP system you can be moving from one location to another and still keep your original phone number. There are no divert charges because there is no diversion. You get a brand new phone system with a very powerful and feature rich online PBX (switchboard), new sophisticated telephone handsets and no maintenance charges. Most of our customers make savings of around 40% off their old BT charges.
So, if you are closing down one office and simply don’t want to lose your phone numbers then that again is no problem, since Cloud Net can put the phone numbers from the closing office on to the system in the remaining offices. Again it doesn’t matter where the offices are. Your customers need never know that you closed the office.
The reason we are able to do this is because we offer a hosted VoIP (voice over IP) service which means that you plug special phones (called SIP phones because of the protocol they work with – they have a computer inside them) directly into your network. Your conversations are carried over the internet using our network. You transfer your numbers to these phones – technically this is called porting your number. BT has been forced by Ofcom to allow this to happen. This means that your phones can be anywhere on the planet but they will still use the numbers you transferred to them. Whilst your new phones must be SIP phones you can choose which ones you want.
So to recap the advantages of hosted VoIP:
• Keep your phone numbers forever
• Get a brand new free system including a free pbx and free handsets
• Get great voice quality
• Get clear low call charges
• Pay no maintenance charges ever again
• Save money when you pay one low subscription per month.
What are the downsides? Well you will never get to talk to those friendly BT people again. Sorry.
We have helped lots of companies save their phone number when moving offices. If you need any help about this please feel free to call us on 01922 21 33 33.
Written By David Hill, Chairman, Cloud Net
Posted by Cloud Net on Wed, Jul 21, 2010 @ 03:05 AM
The London Olympic Games and Paralympic Games Act 2006 sections 19-21 governs the way that advertising will be regulated during the period of the Olympics.
It includes not only the rights to enter premises to destroy advertising but also the ability to levy a fine of up to £20,000.
The Olympic Delivery Authority will lay out detailed provisions within 6 months of the start of the Olympics. The general provisions that we must obey in terms of advertising by force of law were produced in April of this year.
On the Olympic Delivery Authority Web Site a lady called Alex, who started work for the authority in 2005 says “I am a Brand Protection Lawyer. Brand protection is vital to London 2012, as we must raise around £2bn from private sources to stage the Games. Much of this funding will be generated by exploiting our brand.
Aside from revenue generated from ticket sales and broadcasting, the London 2012 Organising Committee is entirely reliant on sponsorship funding, and revenue from merchandise.
The value of the London 2012 brand and the goodwill in the Olympic and Paralympic Movements is therefore crucial, and protecting the brand is a top priority.”
BT is one of five 'Tier One' sponsors, which are expected to enjoy publicity worth at least £50m from their connection with the Games and being able to use the 2012 logo on adverts alongside the Olympic rings.
BT has agreed to provide communications services for the event in East London, including the Olympic Village and outposts such as Weymouth in Dorset, where the sailing events will take place.
Even though BT is set to get publicity worth £50m to £80m from its association, it is expected to provide goods and services worth about £125m.
The race to become the prime communications sponsor was hotly contested between BT and Orange, owned by state-controlled France Telecom.
So there is some pretty serious money going into preventing any ambush marketing going on. Given that BT is spending £125m (which works out at around £6 per customer) it is only right and proper that it gets this kind of protection.
Claims of draconian protection from for example the Chartered Institute of Marketing are ridiculous. If we want the Olympics (and the majority of people did) then it is far better that business pays than tax payers.
It seems reasonable to me that we should use our ingenuity to market our systems within the spirit of fair competition and that means letting BT enjoy the fruits of their £125m.
So Cloud Net will continue marketing our excellent business telephone systems with a miniscule fraction of the money that BT are spending but we will not seek to imply that we are in any way associated with the Olympics. (And please support BT during the Olympics because they need to get their millions back somehow.)
Written by David Hill, Chairman, Cloud Net
Posted by Cloud Net on Wed, Apr 28, 2010 @ 08:29 AM
Until now, business phone systems have been sold on price. The usual 'We can save you money off your BT bill' is no longer the clinching argument that it used to be.
What's more important to you - saving a small percentage off your current bill or winning more sales and improving customer service? An important part of your decision process should be how you respond to incoming calls - so called inbound telephony. There are many compelling reasons why inbound telephony should be key when you buy a business telecoms system.
Ensuring that a customer call gets answered correctly first time every time has to be worth thinking about and can mean the difference between a successful sale and a missed sale. My survey below reveals just that!
I carried out a brief unscientific survey of car tyre vendors yesterday. Of the 25 companies I phoned 15 failed to respond at all to my call - the phones simply rang out. I really needed some tyres and so I just wanted to speak to someone or get someone to call me back within an hour. Those 15 companies who didn't answer or have voicemail facilities didn't even get to first base.
There really isn't any excuse today to miss a call. With our Cloud Net business telephone system you can choose a variety of options to suit your needs and your callers' preferences, including call cascading, calls answered with IVR, calls answered in different parts of the country, calls answered on mobiles and even answered using a live answering service on demand. It all adds up to the most powerful set of tools to help small businesses never miss a call while providing a professional image. This is how you can really start to see a massive ROI and never lose a call.
What's more, another benefit of Cloud Net is that businesses can really monitor the team's performance in terms of call handling. With Cloud Net, you can see how long it takes to answer a call and how many you calls are lost before the caller rings off.
You can allocate a number specifically for a particular purpose and then monitor the response. At Cloud Net we take this so seriously that we monitor our own inbound statistics as a KPI and report on them every week. We know how long on average we take to respond to a sales or help call. We believe that the fact that you can talk to a real person on the support desk when you call Cloud Net without waiting or paying a premium rate has to be good.
Of course if you want to improve the way you respond then it makes sense to talk to a supplier who owns the network and can improve call functionality and provide a good quality of service, rather than hire a telecoms reseller for companies such as Gamma, BT or Opal. Try out our inbound response today.
Written by David Hill, Chairman, Cloud Net.
Posted by Cloud Net on Thu, Apr 08, 2010 @ 08:23 AM
The UK landline market place has changed more radically in the
last 2 months than ever before. For once BT the largest player hasn't reported a major change, however the others of the big 4, Virgin Media, Cable and Wireless and Talk Talk have had major events.
In date order:
Virgin Media
NTL: Telewest as a brand was unceremoniously dumped by Virgin as they rebranded their business offering to Virgin Media Business on February the 11th. That rebranding exercise seems to consist of deleting all references to NTL Telewest on all documents on their web site and replacing them with Virgin Media Business.
Mark Heraghty, Managing Director of Virgin Media Business, said: "We have big ambitions for Virgin Media Business. Delivering fabulous fundamentals - great service, good quality and value for money - is at the heart of our strategy. Over the last three years we've invested heavily to put the building blocks in place, which means we're more than fit to wear the Virgin badge."
Cable and Wireless Worldwide
Then on March 26 Cable and Wireless split in two and Cable and Wireless Worldwide were born. It is to concentrate on The Worldwide business (formerly Europe, Asia & US) specialising in offering communications services IP, data, voice and hosting to large enterprise, reseller and carrier customers. It operates globally, with core markets in UK, Asia and EMEA, and provides connectivity in 153 countries.
Talk Talk
Then on March 29 Talk Talk was admitted to the UK stock market following the demerger with Car Phone Warehouse. Their business offering is still branded as Opal (watch this space). They say Opal has a 15 year history and is well established within the SME market, currently offering voice, data services, telephony systems and mobile services to business customers in the UK.
Opal has 3 distinct channels to market, Small Business (Connect channel) - managing businesses up to 50 employees / customers, Large business and public sector (Consult channel) - managing organisations over 50 employees and all the way up to the FTSE 100 and resellers and dealers (Partner channel) - from dealers up to Systems Integrators
Financials
So let us compare their financials (all figures in £ millions, except employee numbers)
| | BT | Virgin Media | C W W | Talk Talk |
| Year end | Mar-09 | Dec-09 | Mar-09 | Mar-10 |
| Turnover (m £s approx) | £21,390 | £3,804 | £3,646 | £1,385 |
| Profit Before Tax | -£134 | -£338 | £233 | £115 |
| Market Capitalisation current | £9,675 | £4,164 | £2,414 | £1,235 |
| Employees | 111,000 | 11,000 | 13,000 | 1,500 |
| Debt | £12,365 | £5,934 | £832 | £862 |
The market capitalisations (number of shares times share price) are interesting with the markets clearly taking into account differing factors.
VoIP
It is interesting that none seem to be placing a great deal of emphasis on the hosted VoiP revolution that is headed down the tracks toward them. It will be interesting to see just how they react to when they see companies like Cloud Net taking an ever increasing proportion of their business systems revenues.
Written by David Hill, Chairman of Cloud Net.