Telecom Council Announces SPIFFY Award Winners- Telecom Start-ups and Supportive Carriers Recognized

March 1, 2009
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 Abstract

The mission of the Telecom Council of Silicon Valley is described along with the rationale for the SPIFFY awards. Notable comments from selected award presenters/ recipients are included in this summary along with Norwest Venture Partners Tim Chang’s observation on the current harsh climate for telecom start-ups and entrepreneurs.  Tim presented before the awards were announced.
 
Who is the Telecom Council of Silicon Valley?
 
The Telecom Council of Silicon Valley connects companies and individuals involved in the region’s communications technology industry with one another for business development, collaboration, and education. The Council, formerly know as the Service Provider Investment Forum, hosts events to bring together local telecom professionals- the industry’s critical mass of businesses, research, ideas, capital, and human expertise.   Their principal goal of the Council is to provide an arena to "Connect, Communicate, and Collaborate."
 
What are SPIFFY Awards?
 
The SPIFFY Awards recognize the most outstanding telecommunications start-ups in Silicon Valley, as judged by the Service Provider members of the Telecom Council of Silicon Valley.  
 
Over 20 Service Provider (SP) members of the Telecom Council of Silicon Valley announced the winners for this year’s SPIFFY awards for their innovation, execution, management, and technology at the annual SPIFFY Award ceremony. These are SP’s or their venture capital subsidiary that have a presence in Silicon Valley.   Of the 96 pre-screened telecom startups that presented at Telecom Council meetings in 2008, members of the Service Provider Forum (SPIF) chose seven winners and seven runner- ups. There was also an award given to the most successful SPIF alumni (start-up that had won an award last year).
 
Competition for these awards is stiff because all startups are screened by Telecom Council Steering Committees before they are selected to present to the SPIF or other Telecom Council forum meetings. Startups who present have already been identified as having ideas, relevance, and traction that most appeal to carrier members from around the globe.   Bling Software won awards in two different categories.
 
The winners and 2nd place finishers of the 2009 SPIFFY Awards were:
 
  • The Edison Award for Most Innovative Start-Up: 4Home, Qik.
  • Ground Breaker Award for Engineering Excellence: Morpho, Staccato Communications
  • The San Andreas Award for Most Disruptive Technology: Bling Software
  • The Fred & Ginger Award for Most Supportive Carrier: Swisscom (for the active role of their Silicon Valley-based team in the telecom innovation scene), Intellect Partners (a division of Telia Sonera).
  • Graham Bell Award for Best Communication Solution: TruTap and Amika Mobile shared this award
  • The Core Award for Best Fixed Telecom Opportunity: Brilliant Telecom, Zeugma Systems
  • Prodigy Award for the Most Successful SPiF Alumni: 2Wire, JahJah
  • The Zephyr Award for Best Mobile Opportunity: Bling Software, Avot Media
The Telecom Council looks forward to promoting ongoing innovation in the telecom value chain and reviewing over 100 telecom startups in 2009.
 
References:
Here are the url’s for the web sites of the winning companies:
 
http://www.blingsoftware.com/
http://www.4home.com/
http://www.morphoinc.com/
http://en.swisscom.ch/aboutswisscom
http://www.trutap.com/
http://www.amikamobile.com/
http://www.brillianttelecom.com/
http://www.2wire.com/
 
Here are a few notable comments from the award presenters and recipients:
 
Adobe has been involved in mobile communications for five years. They believe it has now become mainstream and is contributing to the evolution of the web. From the company’s web site (http://www.adobe.com/mobile/): “Adobe aims to empower device manufacturers, content providers, and operators to deliver engaging experiences that run consistently across desktops, mobile phones, and consumer electronics devices by leveraging the Adobe® Flash® Platform.” They have recently folded their Mobile Division into their main corporate business.
 
BT believes that fixed line communication has become “something new again” This is due to VoIP, unified communications and intelligent services offered over fixed lines to business and residential subscribers. (BT does not have a mobile/wireless division, having abdicated that market to Vodafone in the U.K. and elsewhere).
 
Brilliant Telecom is a timing and synchronization company whose technology has been deployed by Vodafone.
 
Bling Software CEO graciously accepted both awards. The company’s embedded software is said to enable consumers to have a dynamic mobile web content experience on their cell phone screens.
 

 
Norwest Venture Partners’ Tim Chang on the outlook for telecom entrepreneurs
 
Resiliency, good timing, connections, and patience are always needed, but especially in this challenging economic environment.
 
There are pockets of strength in mobile communications:
  • Smart phone are selling well
  • Apple App Stores are doing over $1M of business each day
  • There are now 50M mobile web users in the U.S.- over ¼ of the total number of users
  • Web video usage has increased (Source Fierce Telecom)
  • While the mobile advertising market is slowing, it does have future potential
  • Mobile ARPU has increased for cellular carriers: AT&T from $50.88 to $59 from the Q1 to Q4 in 2008; VZW from $50.40 to $51.7 in the same time period.
Tim believes that cellcos will go back to metered service (vs. flat rate plans) and create tiered bundles of services for consumers.
 
Finding funding has been (and will continue to be) very hard for capital-intensive start-ups, e.g. semiconductors, network equipment, touch screens. Venture investors can’t afford to spend $60m to $100M before such companies validate their business plans with technology they can sell to OEMs. 
 
SP deployment cycles are slowing and that benefits larger companies at the expense of more nimble and quicker start-ups. Femtocells and new CPE were cited as an example. 
 
System oriented start-ups (network infrastructure equipment, modules, CPE, etc) were advised to target their products/technology to tier 2 carriers that might be more open and receptive than tier 1 carriers.
 
Strategic investors, e.g. SK Telecom might provide funds that VCs would not provide in this challenging financing environment. This is especially the case with IPOs not being an exit strategy option for start-ups.
 
VCs are pursuing a barbell investment strategy- providing seed capital to very early stage or embryonic start-ups and later rounds to mature companies in their investment portfolio. Series B and C funding rounds have been the hardest to complete, which means that many start-ups are folding operations.
 
Some promising mobile market segments include:
  • Game playing with iPhones
  • Micro transaction payment processing
  • Wireless enterprise applications and backhaul
  • Apps where content is in the “cloud” and available on demand.

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