NetworkIP Blog

Last week Juniper Research released a new report forecasting the growth of the Mobile Payments Market through 2013. The study projects that purchases using Near Field Communications (NFC) enabled phones coupled with money transfers are likely to total $600 billion globally by 2013. Howard Wilcox, the author of this report, points to the continued growth in mobile subscriber penetration & the availability of exciting & easy to use services as the driving forces to this type of growth.

Wilcox concluded that today’s mobile market is mostly dominated by the purchase of digital good such as games, ringtones, & music. The new opportunities in this space will include the future of NFC, mobile money transfer (MMT), & the purchase of physical goods via the mobile device. The report suggested that the Far East & China, western Europe, & North America will represent more than 70% of global MMT gross transaction value by 2013.

In order for this market to mature at the rate suggested by Juniper we’ll need to see a number of things fall into place. The good news is that the mobile operators can now support the bandwidth & speeds that these mobile payment applications will require. Also, mobile operating systems such as Symbian, Apple, & Windows Mobile are now open for us to develop these new mobile payment applications.

So what pieces to this puzzle are we still missing?

The mobile device manufacturers such as Nokia, Samsung, RIM, & Apple need to begin releasing new phones with NFC technologies built in. Without these devices in the market, retailers will not begin updating their existing Point of Sale (POS) infrastructure to accept contactless payments. Once released, the device manufacturers will need to make these new mobile NFC enabled devices affordable. Unless people are purchasing these new mobile devices, the retailers will still be reluctant to update their existing POS solutions.

Beyond the mobile devices & the POS infrastructure consumers need to be educated. Consumers must understand how these new mobile payment solutions will work, the value in using these solutions, & most importantly the consumer needs to be convinced that these solutions are safe & secure. There have been far too many reports of identity theft for consumers not to wonder how this solution is safer than what they are using today.

For those of us partaking in this new market the sky is the limit. Of course we still have some obstacles to navigate & it’s going to require platform providers like NetworkIP, mobile device manufacturers, mobile service providers, retailers, application developers, & the banking & credit card companies to all work together.

Last week’s Democratic National Convention (DNC) was interlaced with contactless & mobile technology from beginning to end.

First Data kicked the convention off by introducing their new GO-Tag; an innovative electronic sensor that is small enough to transform any device into a contactless payment solution. The GO-Tag which was distributed in the form of a small button at the DNC allowed the 5,000 lucky journalists & delegates who received them the ability to “purchase” free snacks & drinks by tapping their GO-Tag button on electronic sensors at concession stands installed throughout Denver’s Pepsi Center. In a recent BusinessWeek article, Michael Capellas, First Data’s CEO, is placing a major bet on the fast-emerging world of mobile electronic commerce. According to the article, the GO-Tag project is one of five new ventures that Capellas has launched since he took over First Data. The other four projects include information analysis, customer-loyalty programs, fraud detection, & consumer-behavior prediction. The article went on to say that Capellas believes that mobile commerce could add more than a $100 million to First Data’s revenues in 2009.

Then there was Senator Barack Obama who announced Joe Biden as his vice-presidential pick with a text message. Nielsen Mobile described this text message based ad campaign as “the single largest mobile marketing event in the U.S., to date.” Nielsen estimates that 2.9 million U.S. mobile phone subscribers received the text message launched by Obama’s campaign. Obama supporters can still sign-up for future text messages from Obama’s campaign by texting “GO” to short code 62262 (spells OBAMA). Supporters can even subscribe to specific types of information updates by texting specific keywords such as “HEALTH”, “EDUCATION”, etc. For more information about Obama’s mobile campaign you can visit Obama’s web site & while you are there you can even download wallpapers & ring tones for your mobile phone too.

Delegates attending both the Democratic & Republican National Convention also made good use of their mobile phones for communicating events from the convention. They sent & are continuing to send text messages to services such as Twitter which in-turn distributes these messages from the convention to their “followers”. These same people are also shooting short video, audio, & taking pictures with their mobile phones & then uploading them to their blogs as mobile blog entries (”moblogs” for short).

These are just a handful of examples on how contactless & mobile technologies are being used in larger scale mediums such as our current presidential election & more importantly these two technologies are increasingly becoming a part of our everyday landscape.

We are excited and proud to announce that NetworkIP has been recognized by Inc. and included in the 2008 Inc. 5000, which represents the 5000 fastest-growing private companies in America. For more than 27 years, the Inc. 5000 has served as a benchmark for the most innovative, dynamic and successful companies in the nation and we believe that this recognition speaks volumes of what we have achieved at NetworkIP over the past 10 years.

Much of our growth this past year is contributed to additional volume achieved by our existing customers, new services being offered by Jaduka and from our strategic partnerships with companies such as Cisco, Dell, and Nortel Networks. As a result we have been able to offer a wider variety of telephony services with great quality and at a low cost!

We want to thank our customers for trusting us with their businesses and following our lead in developing strong and reputable brands for the consumer. And of course we couldn’t have achieved this level of success if it weren’t for our talented team of employees! We owe a big thank you to them for all of their hard work and dedication to perfecting the solution we offer today.

Last week’s Prepaid Press Expo in Las Vegas was a huge success for NetworkIP, our customers, & the prepaid card industry as a whole. The Expo brought seasoned veterans along with a good number of new companies entering the prepaid market.

In an effort to design the best conference possible The Prepaid Press partnered with the Pelorus Group & as a result the show offered a great array of conference tracks to include a look at the Prepaid Long Distance market as a whole (day 1), Prepaid Wireless (day 2), & Prepaid Alternative Payments (day 3).

On day 1 our very own CEO, Pete Pattullo, presented on the topic of “Building a Better Mousetrap” which focused on the technology of prepaid. Pete’s presentation discussed how we at NetworkIP have approached building a solution to stand the test of time received outstanding feedback from the audience. As Pete suggested, it takes a lot more than a VoIP box to develop a truly remarkable platform. It requires a combination of passion to build reliability, requires managing quality connections (our own iQT solution), ensuring competitive pricing, having the right information to make decisions, the evolution of the platform (we’ve been at it for 10 years & recently released our 8th major software revision – ICS8), innovation & the never-ending pursuit of excellence, & having talented experienced people with the right skills. These are the components that have made our solution the best in class!

Following our very own Leadership Summit Wednesday morning I caught a number of good conference sessions on Prepaid Wireless later in the day. Randall Walrond, VP of Product Management at IVR Technologies, discussed how the prepaid market can leverage the new technology of today’s mobile smart phones. He & I agree on a number of points on what these new devices & faster networks open up to the industry.

I also heard a number of compelling arguments suggesting that the average prepaid consumer isn’t ready for the new smart phones, the applications that run on these smart phones, & new technologies such as Near Field Communication (NFC). Oscar Munoz, President of Uni-Mas Corporation, provided compelling arguments that the average prepaid consumer can’t afford today’s smart phones & that technologies such as NFC are just to far out to invest in for today’s market. Munuz of course didn’t argue that smart phones & new technologies such as NFC would eventually reach the prepaid consumer. He simply suggested that it’s still a few years down the road & that we need to focus on the reality of today.

On day 3, Joel Stanton of Lightspeed Research presented on the value that exists in today’s alternative prepaid market. He discussed the pros & cons with of both the closed-loop & opened-loop gift card industry. Stanton’s presentation was then followed by a discussion on how to best distribute prepaid card solutions. Thomas Honey of Better ATM Services discussed the numerous problems with the distribution of gift cards & cited specific examples such as banks offering VISA & MasterCard gift cards.

Looking back on this year’s show & the topics that were discussed we noticed a significant shift in attention towards the mobile market. We too believe that the mobile market offers huge potential for prepaid. As network speeds increase & mobile phone operating systems, mobile devices, & the mobile networks continue to open up there is an abundance of opportunity for companies to leverage the services & applications that can be developed for this market.

Our hats off to the folks at the Prepaid Press who were able to put together such an exciting & informative event. It was definitely worth us attending, it was great for our customers, & we look forward to maturing the many new relationships that were made at this year’s event.

Jaduka’s APIs enable much more than slick innovative voice-enabled web applications. When aligned with a company’s business objectives, voice-enabled solutions can result in significant savings. I applaud Datran Media for their ability to identify a business need where adding voice can enhance their services all while saving their company money.

According to Jason Oates, Vice President of Media Services at Datran Media, it was an easy decision to choose Jaduka. Jason adds, “Jaduka’s solution provides a positive ROI by helping Datran Media improve campaign success & drive greater revenue for our advertisers & publishers.”

These new voice-enabled solutions are not only beneficial for businesses; they are also useful tools & provide consumers with convenient & efficient ways of communicating. As more companies realize the value in adding voice to existing applications, business processes, & CRM services we are going to see an explosion of new voice-enabled solutions deployed.

The NetworkIP team has packed their bags & by now most of the team has already arrived here in sunny Las Vegas! We are attending this year’s Prepaid Press Expo which is being held at Caesars Palace this Tuesday, August 19th through Thursday, August 21st.

Tomorrow morning we are holding our annual Prepaid Leadership Summit & later that night we will attend this year’s Expo (Toga) party which we happen to be sponsoring. Given this year’s theme, our CEO, Pete Pattullo, has volunteered his team (me included) to dress the part. The men of NetworkIP will dress as Gladiators & the women of NetworkIP will dress as Royal Goddesses. If you have yet to sign up for this year’s Prepaid Press Expo & party I recommend you do so now. It’s sure to be a show & party that you won’t want to miss. What happens in Vegas stays in Vegas!

It is extremely important that companies keep in synchronization with regulatory changes. At NetworkIP, we have taken the lead for our clients to ensure that they are made aware of regulatory items that affect their business. In an effort to share our knowledge of regulatory items affecting the telecom & prepaid industry we’ve decided to post this information to the Internet via our blog so that companies around the world could take advantage of this valuable information. It is my pleasure to bring to you the first of many “Telecom & Prepaid Regulatory Updates” courtesy of NetworkIP.

Telecom & Prepaid Regulatory Updates - #1
August 18, 2008
by: Jennifer Begin

If you are doing business in the telecom industry & have properly registered with the Federal Communications Commission & you have filed the 2008 Form 499-A (on 2007 Revenues) with USAC, you should be receiving invoices from the various regulatory agencies that govern this industry. As stated on the Form 499-A & further detailed in the instructions, those revenues reported are subject to Regulatory Fees other than just USF. On the last page of the form, there are boxes that must be checked which indicate for which fees you are eligible (not exempt from) to be billed. In an effort to further define what a customer should expect regarding these new invoiced amounts, below is detailed information about what is being billed & how the billing is calculated.

- NECA bills annually for the Telecommunication Relay Service (TRS) usually in July. If your contribution requirement is more than $1,200 then you can opt to have it billed monthly. Information on the 2008-2009 Interstate TRS Fund billing process is available at www.neca.org/NECA_Recources.asp. If you have questions regarding the calculation of your contribution, or need additional information you can contact Marina Aparicio at 973-884-8334 or maparic@neca.org.

- Universal Service Administrative Company (USAC) bills monthly for USF fees based on the revenues reported on the 499-Qs. The bill gives detailed information on how they determine your contribution as well as whether you are LIRE eligible & De Minimis eligible.

- NeuStar bills monthly for Local Number Portability & Statement of Work (LNP/SOW) fees. This invoice is based on the revenue reported on the 499-A. You can view your invoice & instructions on “How to Read Your Invoice” through NeuStar’s password protected website at http://billing.neustar.com.

- FCC (Federal Communications Commission) bills annually, usually in the August-September time frame, for a Federal Regulatory Fee based on revenues reported on the 499-A. To find out how this regulatory fee is determined for your company, refer to the industry appropriate section under the heading “Who Owes Fees & What is My Fee” at http://www.fcc.gov/fees/regfees.html.

Information on these fees can be found in the 499-A instruction manual on pages 34-36.

* This article is strictly an overview & not to be construed as legal advice. You will need to apply this general information to your entity-specific situation & may need to seek legal advice to ensure you are in full compliance with the federal & state laws for telecommunications companies.

We are looking forward to hosting next week’s Prepaid Leadership Summit in Las Vegas at the 2008 Prepaid Press Expo. This will be our third year hosting the Prepaid Leadership Summit. The Summit provides us an opportunity to share our knowledge of the prepaid industry with our customers. We touch on new things that we are developing at NetworkIP, we provide our perspectives on what is happening in the prepaid industry (lot of regulatory items this year), & I have the pleasure this year of discussing new opportunities for our customers. This year’s summit is packed full of great information & is sure to be a HUGE success for all of our customers!

The Summit agenda is as follows:

Date: Wednesday, August 20th
Time: 8:00 to 11:00am
Location: Pisa/Palermo Room at Caesar’s Palace     

8:00 - 8:30am - Attendee Check-In & Breakfast

8:30 - 8:45am - NetworkIP Welcome Address
Speaker: Pete Pattullo, President & CEO

8:45 - 9:30am - NetworkIP Technologies & Features
Speakers: Nichole Janner, Vice President of Prepaid Services
Karthik Srinivasan, Director of Systems Engineering
Wendy Gauthier, Solutions Manager

9:30 - 9:45am - Regulatory Landscape
Speaker: Jennifer Begin, Regulatory Manager

9:45 - 10:15am - Mobile Opportunities
Speaker: Brian Kirk, Vice President of Business Development

10:15  - 10:45am - NetworkIP POSA & Transaction Services
Speakers: Doug Williams, Vice President of Transaction Services
Joslin Sansom, Transaction Services Manager   

10:45  - 11:00am - Branding Dashboards
Speaker: Pete Pattullo, President & CEO

I was traveling this past week (on vacation actually) & while waiting in the Dallas/Fort-Worth airport to catch a connecting flight I overheard a pretty sad telephone conversation between two engineers that really made me appreciate what our teams have designed & developed over the past 10-years. The conversation between the two software engineers went something like this…

“We are getting a number of customer complaints that the application keeps crashing their systems. Have you looked at the database queries that are running? You know the database is our Achilles’ heel man. We can’t support all that many simultaneous queries. Maybe we should trying queuing up the queries so they don’t overload the system? Yes, I know if we do that it will take longer for things to run, but better they run then crash all the time, right? You know table joins may be a problem too. The database just can’t handle queries that require table joins. Maybe the queries we are running are just too big… I don’t know man; we’ve got to do something soon to fix this. OK, try some stuff & get back with me. I’ve got to tell our customers something.”

I can’t tell you all how relieved I was that I wasn’t in this company’s position. My jaw about hit the floor when I heard the guy refer to their database as their Achilles’ heel. If there is one thing that our customers don’t need to worry about it is our database solution. Handling large volume database transactions is one of our core competencies to say the least. Our database solution handles millions of transactions daily without skipping a beat. These transactions aren’t from a single source either. We handle database requests coming from over 250 API methods, customer service web sites, reporting traffic, & obviously from systems applications handling call processing.

Transaction processing is just another one of the many solutions & services we offer & stand behind. We aren’t trying something new or untested either. We have a proven solution that continues to provide our customers with the reliability & scalability that enterprise solutions demand.

To conclude, I did consult with this gentleman about Jaduka’s Transaction Services API. He seemed overjoyed to hear that we had made our solutions available via simple Web APIs. His company obviously doesn’t have the time, money, or resources to develop a high volume database solution on their own & we’ve got a call later today to discuss this opportunity in more detail.

Every time I walk into Starbucks I’m hit in the face with a new sales promotion. Howard Shultz & crew are doing all that they can to turn Starbucks around. If successful, their current promotion will have consumers visiting a Starbucks twice a day. The approach with this promotion is that if the consumer returns with their morning receipt after 2:00 PM, they will be offered any grande (that is a ‘medium’ for you folks that have yet to pick up on the Starbucks lingo) iced drink for $2.00 instead of the usual $3.50 & above price tag.

I can’t help but look at a promotion like this & imagine the benefits that Starbucks could achieve if they would simply use communication & transaction based technologies to market & manage this promotion. The problem is that too many companies perceive such an integration to either be impossible, or if possible then too expensive.

My morning coffee was paid for using my Starbucks credit card. Talk about a loyal Starbucks’ customer… I earn Starbucks points with all of my purchases instead of miles or cash back. Since Starbucks has already “signed me up” why not alert me of this promotion via text message or better yet with a phone call rather than catching me only after I’ve walked through their doors? It wasn’t until I purchased my coffee & then asked for my receipt that the clerk even notified me about the promotion. What if I wouldn’t have asked for my receipt? Would the clerk even have told me about the promotion?

Even if I do decide to return later today it is now my responsibility to remember the promotion & I’m also forced to keep track of my receipt for the rest of the day. With the use of communication & transaction based technologies I wouldn’t have to do either. Since I’m already a loyal customer & I’m using a Starbucks card I shouldn’t need to hang on to my receipt. My purchases could be tracked on-line & when I return later in the day my Starbucks card could be scanned to validate that I made a purchase earlier that morning. As for forcing me to remember the promotion, since Starbucks already has my mobile phone number I could be sent a text message or recieve a voice call around 1PM to remind me about the promotion. Both of these solutions could easily be enabled through the use of Jaduka’s Voice & Transaction Services APIs.

Again, it’s obvious that too many companies do not realize how easy & inexpensive it is to add these types of technologies to their applications & promotions. This is especially true for companies wishing to add voice.

The Public Switch Telephone Network (PSTN) for too long now has been inaccessible to companies that do not have huge telephony equipment or deep pockets. With Jaduka’s Voice API we have removed these barriers & we have made it easy & inexpensive to plug in to that telephony network. With our APIs you can make your applications & promotions heard.