Cloud Net Blog

Why Are Telecoms Shares So Cheap?

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

Moving offices - You Can keep Your Phone Number with Cloud Net

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

Vodafone Sure Signal vs T-Mobile Cel-Fi vs Orange UMA vs Cloud Net Connect

There are an increasing number of options to resolve the problem of mobile coverage black spots in homes and businesses. Orange tells us that “one in five UK mobile phone users has a problem with their signal at home”. So since there are 80 million mobiles out there means that 16 million have a problem with their home signal. That’s a lot.

Vodafone have their heavily promoted Sure Signal service which uses a femtocell to connect the mobile to broadband. A femtocell is a wireless access point that improves cellular reception inside a home or office building.  A mobile call started in an office with a femtocell starts at the handset is sent to the femtocell and from there through the broadband connection, when it ends up back on the mobile network.

This is an elegant and well engineered solution that is available now. There is little criticism of this service on functionality grounds but there is a lot on economic grounds. People ask why they should pay for functionality that they should have any way.

O2 trialled a similar solution in 2007-8 but clearly concluded that it didn’t work for them and have no current offering.

While Vodafone has the largest offering so far, nine other operators worldwide  now offer femtocells – AT&T, SFR, China Unicom, DoCoMo, Softbank, Optimus, StarHub, Sprint and Verizon. More than 60 other telecoms operators are trialling femtocells, many with plans to launch this year.

So femtocells are shifting from a great idea to a reality.  In its recent revision of market figures, ABI forecasts that by 2014 volumes will be hitting 40 million units per annum, while Infonetics predicts a more bullish 69 million.

Another option currently is being trialled in the UK by T-Mobile employs a device called Cel-Fi from a company Nextivity. It is effectively a repeater solution consisting of two units: one of which locks onto the signal and transmits it wirelessly to a unit in a black spot which then retransmits it. The device seems to have been successfully trialled in Holland and is clearly headed to the UK. There is currently no price plan but they are giving away units to deserving large customers.

There are also a number of independent companies offering repeater solutions which seem to break the law. They break the law because they use the same part of the radio spectrum that the mobile companies paid so much for. Anecdotal evidence suggests that these solutions don’t actually work very well since they are simply trying to rebroadcast and amplify a very poor signal.

Orange is now advertising their UMA service for business phone systems widely. The UMA initials stand for unlicensed mobile access. The technology senses when you’re at home and connects your phone to the Orange network through your home Wi-Fi. You need a special mobile that is UMA enabled – most Blackberrys are for example. The nice thing about the technology is that there is no extra cost – if you discount the extra bandwidth you are giving to Orange. The bad thing is that it doesn’t work very well and Orange goes out of its way on their website to disclaim everything with comments such as:

"Boost mobile signal at home with UMA technology" is subject to the limitations of your Wi-Fi network. Performance may be affected by the construction of the building it is used in, local interference from other radio products, the number of devices connected to the network and the data activity on the network.” Boost mobile signal at home with UMA technology" is further subject to the limitations of your broadband connection. Performance may be affected by your distance from the telephone exchange, the number of devices connected, and the quantity of data being transferred across the connection”

Cloud Net has tried to implement similar business phone system solutions using Wi-Fi with smart mobile phones using their networking capability. If you search the web you will find plenty of programs which claim to do just this, Fring being the most famous. We tried the solution and concluded that the reliance on a rock steady Wi-Fi signal made it too unreliable to use and certainly we will not be offering this solution to our customers.

There is another elegant solution which is Cloud Net Connect using IP DECT phones. You simply divert all incoming calls to your IP DECT system.  This allows you to wander around your workspace carrying your phone using a land line number and making crystal clear calls with all of the functionality of a Pbx including call recording, and IVR. If you implement the “follow me” functionality then when you are out and about you can still receive your landline calls and make mobile calls. The cost of calls when you are in the office is massively reduced because you are using Cloud Net VoIP and you look and sound more professional than relying on a mobile network.

BT Need Value For Their £125m Investment in the Olympics

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

VoIP basics: How to make free business phone calls via the Internet

We have a new business customer sign up last week who told us an interesting story that we wanted to share.

“The first time our MD went overseas we called our mobile provider to enquire about international connection plans. For just £6 a month, they told us, he could get "discounted" calls to wherever he went.

Some £200 in "discounted" calling charges later — which added up to less than two hours of phone time — we’d realised that what we’d bought was an expensive lesson on international dialling. We've since learned that keeping in touch with customers and colleagues overseas can be cheap — sometimes even free —all you need is a reliable internet connection.”

If you're under 20, you probably know about something called VoIP as you’ll be using it to chat to friends and family for free or very cheaply wherever they are.  But for users over that age who are still paying for expensive international calls….read on…this is a beginner's guide to making business phone calls using Voice over Internet Protocol.

Voice over Internet converts the sound of your voice into a digital signal that travels over the Internet and is received just like an ordinary phone call. You make these calls using a pre-programmed phone that looks and feels just like the phone you're used to but in actual fact has some pretty clever electronics.

Why would you want to learn about anything that sounds as intimidating as that? If you want to keep in touch with customers or colleagues in foreign lands, it can save you a fortune.

That's because calling internationally from an ordinary land line or mobile can cost a lot, even after buying the discounted calling plan. For example Vodafone charges £5.99 a month plus 3p per minute on top of your plan charges.

Besides, despite the incomprehensible name, VoIP is actually simple, as long as you have the proper equipment.

You simply need a Cloud Net IP01 phone — and a high-speed Internet connection to make it work. If your Internet connection is slow, your phone calls can freeze up and make communication difficult, if not impossible.

Assuming you're signing up to keep in touch with a particular company (or people) as cheaply as possible, you should encourage those individuals to also sign up. Cloud Net-to-Cloud Net calls are free, no matter the distance.

To sign up call Cloud Net on 01922 213456 and we will talk you through the sign up. You choose a landline telephone number (which can be the one you always use – you simply transfer it and stop paying your existing provider) and a couple of days later your free phone arrives by courier.  There are a couple of plans – the most popular costs £8.50 a month for an 18 month contract and you get the phone for free.

Once you get your phone simply plug it into the Internet and away you go. You make calls just like an ordinary phone and you receive calls like an ordinary phone.

If you want to get clever then the system has all the features of an advanced pbx and much more. You can implement them using a computer or phone Cloud Net and ask for them.

For example you can have call recording, and answering services. You can transfer calls and you can have voice prompts.  There is no additional cost for these services.

There is no prepayment for calls or buying of credits. You simply get a bill every month for services used and pay it by direct debit.

So if it’s simplicity and cost reduction you need Cloud Net VoIP has it all.

Written by David Hill, Chairman - Cloud Net

Cloud Net reviews BT Openzone

BT has a service called Openzone. I have only just come across it. It is an interesting idea. You pay BT some money and they then give you access to an amazing number of wifi hotspots. So as you move around you can do everything that wifi lets you do such as surfing the web. So far so normal.

However when you buy into BT home hub to give you home access to the Internet then you get some pre-installed software on the hub that runs  a system called BT Fon. BT Fon is a partnership between a company called Fon and BT. This means that your router will take some bandwidth and make it available to other BT Fon users for free and give you the same rights over their bandwidth. You share/give away 512kb I think. So you share the bandwidth which sounds very public spirited. If you have taken out a subscription to BT Total Broadband by default you are opted in to BT Fon.

So now how does this tie in with BT Openzone? As I said you buy access to BT Openzone and BT pays commission to people and organisations who sell the access vouchers. Having paid your money for Openzone vouchers you can use your access to get into the BT Fon network and so you get access to a huge number of Wifi hotspots.

So just to get this right. BT charges you for your BT home hub. Then by default they charge other people to access your hub. Maybe it's me, but that doesn't seem right. Its like I buy a car and by default, anyone who wants to can come for a ride providing they pay the guy who sold me the car some money.

But that's not all. If you are one of those people who want to use BT Openzone then you pay good real money to do it and expect to get real good bandwidth and zinging speeds. What you really get is access to some BT broadband home hub and a paltry 512Kb. So that's like the guy selling you vouchers to ride in a Ferrari and when you get the ride it's in a clapped out Ford Escort painted red.

I think that this is the way that it works, but the BT site is a mystery of intrigue and disguise. Our company Cloud Net goes out of its way to make things as clear as possible. We don't publicise prices which only apply for the first three months and then double. We think it is important that our customers can easily understand what is going on. BT seem to want exactly the opposite and that is why I would welcome confirmation that my research is accurate and any comments on the fairness of the policy – because I may well be missing something.

Written by David Hill, Chairman - Cloud Net