fallen 40% in a week

and I got so much schtick for calling it a short term sell...oh well, hopefully none of you got too burnt.

Untangling lines of communications
PHONE COSTS

Navigating the telecommunications maze requires an understanding of where the market is heading, writes Ian Grayson
March 31, 2006

ASK any small business to nominate one thing they couldn't operate without and chances are it would be the telephone. The ubiquitous device lurks everywhere, from office desks to coat pockets, providing a vital instant link between staff, suppliers and customers.

Yet when it comes to selecting the best phones and telecommunications services, many business people admit to feelings of confusion.

Faced with bewildering technical terms and high-pressure sales campaigns, they're unsure about what options are best for their particular needs.

Buzz terms such as convergence, fixed-to-mobile substitution, wireless broadband, and push email are regularly spouted by carriers keen to sell their wares.

Then there's the mass of acronyms, such as VoIP, GPRS, 1xRTT, 2.5G, 3G and others that manage to muddy the waters even more.

Telstra group managing director for small and medium enterprises Deena Shiff acknowledges telecommunications companies need to lift their game when it comes to explaining and selling services to SMEs.

"Telcos tend to sell technologies, rather than things that actually deal with the business problems that an SME might have," Shiff says. "SMEs tend to be very time-poor and their ability to deal with complex technologies is limited."


FIVE WAYS TO CUT THE BILLS
Money-saving telecommunications deals for small businesses

* Mobiles: Consider a capped plan to keep a lid on your monthly bill. For example, Vodafone offers a $49 per month plan which allows up to $230 worth of calls, or $79 per month for up to $500 worth of calls.
* Landlines: Try a VoIP (Voice over Internet Protocol) service to reduce long-distance landline call costs. VoIP service provider Engin offers untimed calls anywhere in Australia for 10c. Monthly plans start at $9.95 and Engin voice boxes (needed to access the service) start at $139.
* Internet: Ditch the dial-up connection and move to broadband. Australian service provider iiNet has a range of ADSL broadband plans for business. For example, a $59.95 per month plan provides up to 10 gigabytes of usage. Heavier users can pay $199.95 for 60GB. There's also the option to bundle broadband with an iiNet phone service for greater savings.
* Wireless data: Stay in touch when travelling away from the office. Mobile carrier 3 offers a wireless broadband data card for notebook computers with monthly plans starting at $29 for 200 megabytes of usage.
* Bundling: Putting all your telecoms services with a single provider can result in savings. Optus offers $5 off the rental of each business phone line when you combine them with an Optus mobile service.

Ian Grayson

Taking the time to understand some of the underlying telecommunications technologies and trends is time well spent.

Careful selection of equipment and services can not only make a business more productive, but can save many thousands of dollars in costs.

Amid the swirl of rapidly evolving telecommunications technologies, there are some key areas in which small and medium-sized businesses can extract impressive benefits.

Topping the list is the convergence of voice and data.

Where traditionally businesses have needed separate networks for voice calls and computer data, now a single one will do both.

Called IP (internet protocol) telephony, the technique involves converting voice calls into a stream of data packets which can be sent over existing computer networks.

So, rather than needing to install and maintain two networks in an office, a single set of wires can perform both tasks.

Gavin Milton-White, regional channel manager for telecoms equipment specialist Avaya, says installing a converged voice and data network reduces ongoing costs and gives the opportunity to implement new features that can aid staff productivity.

"You're talking about replacing the traditional key telephone systems that are used in hundreds of small offices," he says.

"Instead, you plug your phone handsets into the computer network."

Because all traffic is now running over a single network, phones can be linked to a business's computer applications.

For example, an incoming customer call can cause all their details to be automatically displayed on the PC screen of the person answering that call.

And rather than needing a technician to install or move phone extensions, all changes can be performed via a PC screen.

The benefits to a small business, which is unlikely to have a dedicated in-house IT specialist, can be significant.

Milton-White says that if a company has multiple locations, the IP-based phone system in each can be linked together using existing data networking connections.

Calls between offices are then free.

"IP is a very mature technology, having been widely deployed for more than six years now," he says. "It is stable and robust and certainly not 'bleeding edge' any more."

One significant downside of a converged network is that if it fails, a business will lose both data and voice connections to the outside world.

Some service providers recommend retaining a limited number of traditional phone connections that can be used if such problems occur.

A related technology, which is gaining a devoted following in many small businesses, is voice over internet protocol (VoIP).

As with IP telephony, VoIP involves the conversion of voice calls into a data stream.

But rather than sending it over a private data network within or between offices, the traffic is sent over the public internet.

VoIP service provider Engin's chief executive Ilkka Tales says the service is popular with small businesses because of the potential savings it offers.

"VoIP changes the way people think about making long-distance calls, freeing them from expensive tariffs, which makes a big difference to the bottom line," he says.

Although it offers cost advantages, some industry experts warn that business users may be disappointed with VoIP's voice quality. At times of peak internet use, conversations can become garbled, or drop out altogether.

While this may not be an issue for calls between offices, it can be a problem when dealing with customers. Meanwhile, further call cost savings have been made possible with another technical advance that changes the way people make mobile calls from their offices.

A device containing a mobile SIM card is connected to an office phone network and used for all outgoing calls to mobile phones.

Rather than the calls going to the exchange and being switched on to the destination mobile network, they leaves the office as a mobile call, avoiding the hefty interconnect fees levied by mobile carriers.

Depending on the frequency of calls being made to mobile phones, providers say the devices can pay for themselves within weeks.

Mobile phones represent another area in which the pace of change can make the decision of what devices and services to use a difficult one for many SMEs.

IDC telecommunications research director Landry Fevre says the pace of development in this area will continue to increase with the trend away from fixed-line phones to mobiles as a primary means of voice communication.

"We expect the PSTN (public switched telephone network) market to shrink from its current level of around $10 billion by half a billion dollars a year for the next five years," he says. "The trend of fixed-to-mobile substitution has a lot to do with this."

Fevre points to the growing popularity of capped mobile plans as an example of how intense industry competition is benefiting SME users.

"For companies prepared to do their homework and shop around, there are some big savings to be made," he says.

For example, mobile carrier Vodafone is offering a $49 per month capped plan that allows users to make up to $230 worth of calls. For $149, a user can make up to $1200 worth of calls each month.

But mobile phones can do a whole lot more than make and receive voice calls.

The integration of powerful processor chips, increased storage capacity and sophisticated software means many have become full-blown computers.

Users can check email, access the internet and conduct business transactions on the fly.

But Hutchison 3 group manager of business marketing Duncan Wakes Miller says the explosion of offerings in the mobile space has made it hard to understand.

"The language and myriad terms used makes it a very hard market for many SMEs to understand," he says.

"The thing is for operators to try to keep it all really simple.

"It's about looking at what customers are doing already and helping them do it better."

As the data speeds offered by mobile telephone networks continues to grow, so to does the variety and sophistication of the services they make possible. Wakes Miller says third-generation networks can deliver sufficiently fast connection speeds to allow mobile users to access office-based computer systems while out on the road. This can allow them to update records in a customer relationship management system, or check inventory or order levels in a database.

"I believe we are in the middle of the next wave of development in mobile services," he says. "The first wave brought confusion, but the second is based on industry standards and that is helping people to understand their options."

Industry analysts advise SME owners to consider exactly what they want to achieve with mobile technology, and then find equipment and a service that helps them do it. This might be equipping a sales team with mobile access to email or service personnel with the ability to order parts from the field.

If careful planning is carried out before money is invested, the resulting productivity gains are likely to more than compensate for the associated costs. Rather than focusing on the technology involved, it is better to look at the business processes that it will support.

"Customers don't really care about the underlying technology but more about what it can do for them and their business," Shiff says.

"If you say 'would you like a mobile service that helps you stay connected to your office?', they say 'great'.

"But if you say 'would you like a high-speed wireless broadband application?', they say 'what's that?'."

Within the next couple of years, many in the telecommunications industry believe, mobile phones will replace fixed for virtually all voice calls.

Attracted by capped pricing plans and flexibility, business users will use a single device regardless of where they happen to be working.

Chris Pattas, enterprise business unit head with telecommunications equipment company Ericsson, points to the fact that there are already 2 billion mobile subscribers in the world and this is forecast to grow to 3 billion by 2010.

"I see the demise of the fixed phone happening this year," he says. "It is going to be harder and harder for an SME to justify making more investments in fixed phones."

Ericsson is working on a system that will allow staff in offices to use their mobile handsets for all calls, but have them handled and billed in the same way as fixed-line calls.

Called One Phone, the system will eventually use office-based wireless networks to make and receive calls, with users roaming on to a public cellular network when out of the office.

Such developments are evidence that the pace of change in the telecommunications shows no sign of slowing.

For SMEs prepared to invest the time and energy into examining the options these developments provide, the rewards are lower costs and improved productivity.

http://www.theaustralian.news.com.au/common/story_page/0,5744,18559163%255E5000920,00.html