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VoLTE in N America Boosts Carrier VoIP/IMS market by 30% in 2Q13

Infonetics Research released vendor market share, forecasts and preliminary analysis from its 2nd quarter 2013 (2Q13) Service Provider VoIP and IMS Equipment and Subscribers report. (Full report will be published August 29th)


2Q13 CARRIER VOIP/IMS MARKET HIGHLIGHTS:
 •Typically a strong quarter, in 2Q13 the global service provider VoIP and IMS equipment market grew 30% sequentially, to $936 million
•All major geographical regions – North America, EMEA (Europe, Middle East, Africa), Asia Pacific and Latin America – posted year-over-year and quarter-over-quarter gains in 2Q13
•North America continues to be positively impacted by LTE-related activity, growing 78% year-over-year in 2Q13
•The standout vendors in 2Q13 in terms of sequential revenue growth are Alcatel-Lucent, BroadSoft, Genband, Huawei and Sonus
•Meanwhile, Huawei, Alcatel-Lucent and Genband remain atop the VoIP and IMS market share leaderboard

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“IMS equipment has officially moved into an LTE and voice-over-LTE world, and there’s no going back now,” notes Diane Myers, principal analyst for VoIP, UC and IMS at Infonetics Research. “In the second quarter we saw this impact spending on session border controllers and IMS core equipment for VoLTE access and interconnection (LTE to 3G) buildouts.”


Myers adds: “Though LTE- and VoLTE-related equipment sales are growing, the market will continue to be lumpy from quarter to quarter.”

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VOIP AND IMS REPORT SYNOPSIS:
 
Infonetics’ quarterly carrier VoIP and IMS report provides worldwide and regional market share, market size, forecasts through 2017, analysis, and trends for trunk media gateways, SBCs, media servers, softswitches, voice application servers, HSS, CSCF, BGCF, MGCF, IM/presence application servers, and subscribers. Vendors tracked: Acme Packet, Alcatel-Lucent, BroadSoft, Ericsson, Genband, Huawei, Metaswitch, NSN, Radisys, Sonus, ZTE and others.

To buy the reports, contact Infonetics: http://www.infonetics.com/contact.asp

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From IBIS World:

"Voice over Internet Protocol (VoIP) experienced massive growth at the start of the past five-year period, though residential customer growth has since flattened out. Regulations and the dominance of companies like Google threaten the industry, but the expansion of mobile broadband networks will open up new avenues for growth. Cable companies able to bundle VoIP service with cable service will fare best in consumer markets in the coming five years, while businesses will slowly but surely turn to VoIP for voice needs..."

http://www.ibisworld.com/industry/default.aspx?indid=1269

Infonetics: Top 3 Optical Nework Equipment leaders are Huawei, Alcatel-Lucent & ZTE

Infonetics Research released vendor market share and preliminary analysis from its 2nd quarter 2013 (2Q13) Optical Network Hardware report. (Full report will be published August 23.)

 

2Q13 OPTICAL MARKET HIGHLIGHTS

 

  • The global optical network hardware market, including WDM and SONET/SDH equipment, totaled $3.3 billion in 2Q13
  • EMEA (Europe, Middle East, Africa) is operating at record low levels of optical capital intensity; positive capex rumbles from tier 1 carriers have yet to translate into more optical spending
  • The top 3 optical market share leaders in 2Q13 are, in rank order, Huawei, Alcatel-Lucent and ZTE
  • Alcatel-Lucent continues to decline on a year-over-year basis, though optical investment is set to increase in 2013 as part of its SHIFT Plan to double down on optical and routing
  • Ciena is well positioned to capture the torrent of 100G spending expected this year from AT&T and Verizon
  • Infinera is the fastest-growing supplier of optical WDM gear in Europe
 
ANALYST NOTE:
“We expected the optical hardware market to turn, particularly in North America, and that’s exactly what happened in the 2nd quarter. Total optical spending is up 27% quarter-over-quarter, and the WDM equipment segment is up 21% year-over-year,” notes Andrew Schmitt, principal analyst for optical at Infonetics Research.
“WDM spending accelerated dramatically in North America as a result of 100G deployments hitting the ground, and worldwide spending on 100G speeds is tracking close to 15% of all optical spending,” Schmitt adds. “China’s 100G deployments will begin in earnest as the year closes, led by China Mobile, and we’re anticipating more than 5,000 ports of 100G in China alone in 2013.”

OPTICAL CONFERENCE CALL
Clients, join Andrew Schmitt August 29 at noon ET for a live optical hardware market recap and outlook. Log in for password: www.infonetics.com/cgp/login.asp?id=714.

OTN WEBINAR
Join Andrew Schmitt Sept. 17 for The OTN Expansion: The Next Carrier Upgrade Cycle, a live event: http://w.on24.com/r.htm?e=658460&s=1&k=86531EAC4194B7C2D3149D6EA6B3BBD6

ABOUT THE OPTICAL REPORT
Infonetics’ quarterly optical hardware report provides worldwide and regional market size, market share, forecasts through 2017, analysis, and trends for metro and long haul SONET/SDH and WDM equipment, Ethernet optical ports, SONET/SDH/POS ports and WDM ports. Vendors tracked: Adtran, Adva, Alcatel-Lucent, Ciena, Cisco, Cyan, ECI Telecom, Fujitsu, Huawei, Infinera, NEC, Coriant (NSN), Tellabs, Transmode, ZTE and others. To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp.
 
LATEST OPTICAL RESEARCH
 
UPCOMING OPTICAL RESEARCH
Download Infonetics' market research brochure, publication calendar, events brochure, report highlights, tables of contents, and more at http://www.infonetics.com/login.

INFONETICS OPTICAL WEBINARS
Visit https://www.infonetics.com/infonetics-events to register for upcoming webinars, view recent webinars on-demand or learn about sponsoring a webinar.

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Global Optical Transport Network (OTN) Equipment Industry
http://www.reportlinker.com/p01518541/Global-Optical-Transport-Network-OTN-Equipment-Industry.html#utm_source=prnewswire&utm_medium=pr&utm_campaign=Network_Equipment

This report is quite expensive at $4500 per copy.  It analyzes the worldwide markets for Optical Transport Network (OTN) Equipment in US$ Million by the following Product Segments: OTN Transport Equipment, and OTN Switching Equipment. The report provides separate comprehensive analytics for the US, Canada, Europe, Asia-Pacific, Middle East, and Latin America. Annual estimates and forecasts are provided for the period 2009 through 2018. The report profiles 47 companies including many key and niche players such as ADTRAN Inc., ADVA Optical Networking SE, Alcatel-Lucent, Aliathon Technology Ltd., Ciena Corporation, Cisco Systems, Inc., ECI Telecom Ltd., Ericsson, Fujitsu Limited, Huawei Technologies, Infinera Corporation, JDS Uniphase Corporation, NEC Corporation, Tellabs, Inc., and ZTE Corporation. Market data and analytics are derived from primary and secondary research. Company profiles are primarily based on public domain information including company URLs.

Huawei Closing in on Cisco's Dominance of Enterprise Networking Market + Infonetics Scorecard Ranks Other Vendors

Huawei Technologies Ltd (China) expects 40% growth in its enterprise-network business revenue this year to about $2.7 billion.  By 2017, the company aims to increase the segment’s revenue to more than $10 billion.  That's a very steep climb from 2012, when Huawei enterprise-network equipment business generated $1.9 billion in revenue, which was only 5% of Huawei's total revenue.

By contrast, 73% of the company’s revenue came from its telecom-gear business, while its mobile-handset business accounted for about 22%.   

Huawei sees opportunities in enterprise-network equipment because the market is going through major changes, with more companies adopting cloud computing and bring-your-own-device policies. Potential growth is greater than the telecom network market, said William Xu, a Huawei senior executive in charge of the enterprise-network business.  

Huawei’s enterprise-network business currently generates roughly half of its revenue outside China, and its strong overseas markets are in Europe, Latin America and Asia.   Huawei is spending $600 million this year on research and development for its enterprise network equipment, up from $500 million.

Read more at: http://infotechlead.com/2013/08/08/huawei-enterprise-network-biz-revenue-to-grow-40-to-2-7-billion-in-2013/  

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Scott Thompson of FBR on Huawei threat to Cisco:  While Huawei Technologies Co., Ltd. has been unable to gain a
foothold in North America (due to the impact of the attached stigma from the stance of the U.S. House Subcommittee on
Cybersecurity), without the EU taking a firm stand with the U.S., we expect Cisco has more revenue at risk in China than Huawei has in the U.S."

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Excerpts follow from Infonetics' Enterprise Networking and Communication Vendor Leadership Scorecard, which profiles and ranks the top 8 vendors of enterprise networking, network security, and communication equipment/software: Alcatel-Lucent, Avaya, Brocade, Cisco, HP, Juniper, NEC and Siemens Enterprise.  Note that Huawei was not included in this vendor evaluation.

According to Infonetics Marketing Director Kim Peinado, the vendor rankings are based on actual data and metrics, including direct feedback from buyers, vendor market share, share momentum, financials and solution portfolio -- eliminating subjectivity.

Infonetics reports that Cisco has the highest score and leads the rest of the field by a wide margin, giving them an adequate cushion to bolster against future score fluctuations in multiple areas. Cisco has the broadest product portfolio, the highest market share, the strongest financials, and the strongest overall brand. Cisco’s key weakness is market share momentum due to a slight decline in market share in 2012.

ENTERPRISE SCORECARD HIGHLIGHTS:
.    Aside from #1 Cisco, for the most part vendor scores fall into a narrow range; a notable exception is financial stability, where there is significant variability in scores
.    Brocade strongly improved its ranking this year (tied with Juniper for 2nd place) due to improvements in financials, market share momentum and buyer perception
.    Juniper maintained its score from last year, as improvements in solution breadth and buyer perception were offset by weaker financials
.    HP ranks 2nd in 5 out of 7 criteria but slid into 4th place overall due to slowing market share momentum and weakening financials
.    The core business of the other 4 vendors analyzed in the report - Alcatel-Lucent, Avaya, NEC and Siemens Enterprise - revolves around the PBX market, which has been slow to recover from the recession, limiting their financial stability and growth prospects
.    That said, Alcatel-Lucent, Avaya and Siemens offer some of the most extensive product portfolios, and NEC's early work on software-defined networking (SDN) could raise its technology innovation scores next year

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ANALYST QUOTES:

"More than 100 vendors are vying for a piece of the $50 billion enterprise networking and communication infrastructure market, but only 8 have a diverse product offering and consistently capture more than 1% market share," observes Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research and lead author of the report. "Our enterprise scorecard helps buyers make accurate comparisons among vendors based on commonly-used purchase criteria and identify which vendors are most suitable for their organization's specific requirements."

Machowinski  adds: "Cisco leads this field by a wide margin, claiming a perfect score in 6 out of the 7 criteria that we measure in our enterprise vendor scorecard. But the battle for 2nd place remains heavily contested, as witnessed by the tie this year between Brocade and Juniper."

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ABOUT THE SCORECARD:

Infonetics' annual enterprise vendor scorecard evaluates the leading enterprise networking and communication equipment vendors using criteria that are commonly used by buyers to select vendors, demonstrate success in the marketplace, and position a vendor for success. The matrix rankings are based on 7 criteria including market share; market share momentum; financial stability; solution breadth; technology innovation; product reliability; and service and support. Companies ranked: Alcatel Lucent, Avaya, Brocade, Cisco, HP, Juniper, NEC and Siemens Enterprise.

A note on excluded vendors:

·        Huawei reported over $1.8B in total enterprise revenue last year but does not break out how much of that revenue comes from enterprise networking and communication infrastructure. Once Huawei starts providing revenue break-outs and meets the threshold for inclusion, we will add Huawei to future scorecards.

To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp
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GET THE SCORECARD FREE:

Qualified businesses and service providers can download Infonetics' 2013 Enterprise Networking and Communication Vendor Leadership Scorecard - worth $500 - free of charge for a limited time at

http://www.infonetics.com/download.asp?id=36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

FBR: Analysis of Level 3 2Q13 Results; Revenue Outlook Remains Uncertain

David Dixon of FBR Capital Markets:

Level 3 Communications (http://www.level3.com/) reported weak 2Q13 earnings due to below-consensus consolidated EBITDA. Core revenues were line with consensus with growth weighted once again to Latin America and enterprise. While this was encouraging, we remain concerned that top-line trends are likely to remain weaker than expected, and the cost structure of the company may shift more than expected due to the change in the nature of content relationships which may drive a review of peering interconnections with end-user networks and the potential migration of customers to single integrated wireline/wireless providers.

While management continued to cite strong demand from enterprise customers, we reiterate our belief that this is largely for lower-margin "feeds and speeds" versus "higher-margin managed services." Growth is consistently coming at lower price points, as North American transport and related services are commoditized.

The Internet is changing; impact of software-defined networks (SDNs) is unclear. We expect significant increases in the long-haul network utilization of major carrier networks at dramatically lower opex costs. The simplification of routing protocols and a focus on source origination and destination of application flows could increase disintermediation risk for Level 3 Communications.

New acquisition on the horizon? The company has already captured much of the initial benefits from the Global Crossing acquisition as two-thirds of the $300 million in savings having already occurred in the first six quarters after the merger (ending in 1Q13). Management reemphasized that the company has just begun to see the advantages of improved operating leverage. However, this would require the unified migration of long-haul AND metro network systems, processes, and data, which has eluded Level 3 in past transactions.

While we do not foresee Level 3 as being acquired (i.e., by Sprint to enhance its network backhaul positioning), we
believe the company may be a quarter or two from its next acquisition, given the moderating organic outlook.

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References:

 

1.  Level 3 Reports Second Quarter 2013 Results

http://level3.mediaroom.com/2013-07-31-Level-3-Reports-Second-Quarter-2013-Results

2.  Level 3's 2Q2013 earnings call replay can be accessed by dialing 1 800-633-8284 (U.S. Domestic) or 1 402-977-9140 (International), conference code 21660691

Or register to hear it on line at:  http://www.media-server.com/m/p/e6feabzi

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End Note:

 

Level 3 is one of the few competitive nationwide wireline carriers left in the U.S.  The others include Century Link (which includes x-RBOC U.S. West/Qwest), Frontier, TW Telecom, XO Communications, TDS Telecom, Cogent, Zayo, Reliance Telecom, Integra Telecom, and others. 

Some like Cogent and Level 3 mostly re-sell their telecom facilities to other carriers.  Zayo, Reliance and Integra are mostly Business Ethernet carriers.  TW Telecom and XO also are Ethernet providers, but in many locations do not own their own fiber and have to resell other carrier (e.g. AT&T) services.

 

 

Sprint to include Clearwire spectrum in new LTE roll-outs + Analysts turns cautious on Sprint

Sprint will incorporate spectrum from Clearwire's network in its Long-Term Evolution service across the country next year, the carrier disclosed Tuesday, adding that it expects all of its new smartphones to support 4G speeds.  Sprint executives declined to say whether those models will include the iPhone.

While Clearwire's frequencies occupy a different band than Sprint's other spectrum, the 2.5 GHz LTE base stations are designed to add capacity and boost service in dense, urban areas.

With the Clearwire acquisition, Sprint got access to an emerging Clearwire LTE network that it plans to use for extra mobile data capacity in densely populated areas. Though it uses a slightly different form of LTE than Sprint's and operates in a relatively short-range spectrum band, around 2.5GHz, the former Clearwire network could give the carrier a large amount of capacity to bolster services in cities.

The network had been intended for Sprint's use through the longstanding partnership between the two companies, but Sprint's takeover of Clearwire gave that plan a more solid foundation.

There were already about 2,000 Clearwire LTE sites completed when the buyout was completed earlier this month, said Steve Elfman, president of network operations and wholesale, on the conference call. He expects several thousand 2.5GHz LTE base stations on the air this year, with sites across the country next year, though not the full deployment of sites that will use the spectrum. The 2.5GHz radios don't have as long a range as Sprint's other gear, so they'll be deployed in a larger number of sites, he said.

Sprint plans eventually to operate LTE in three spectrum bands: Its own 1.9GHz band, the 800MHz frequencies from its defunct Nextel network, and the 2.5GHz spectrum. Earlier this month it introduced the first mobile device that will be able to use all those bands.

http://www.cio.com/article/737298/Sprint_promises_wide_rollout_and_device_support_for_ex_Clearwire_spectrum

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Analyst Opinion on Sprint: Waiting for Network Differentiation amid Heightened Competition, by David Dixon, FBR Capital Markets

 

Sprint reported mixed 2Q13 results, with better-than-expected revenue, offset by weaker-than-expected postpaid net adds and churn.  Consolidated revenues of $8.9B and wireless revenue of $8.1B were ahead of consensus.

Operating Income Before Depreciation And Amortization (OIBDA) of $1.42B was slightly above the Street; postpaid net losses of 1,045,000 fell short of the consensus estimate  of 914,000 net losses. Postpaid churn of 2.63% was up 83 bps annually and above the Street.

Sprint will continue to face customer churn pressures as it rolls out Network Vision. We believe Sprint is facing increasing
competitive pressure in the postpaid market, with Verizon and AT&T  encroaching from the high end and a resurgent T-Mobile US encroaching from below.
 
We expect T-Mobile to pressure both AT&T and Sprint in the prepaid and postpaid markets as the company completes its 4G network   upgrade (which shows better performance, versus T and VZ, according to   our vendor checks), launches its LTE network, and markets its new "no contract" plans with a reinvigorated device lineup.
 
We believe Sprint  will also face higher-than-expected cost pressures; this drives our below-consensus OIBTDA forecasts ahead of competitive differentiation in FY15.

    * LTE buildout progressing well, but still behind rivals. Sprint announced the launch of LTE in an additional 41 markets, bringing the total number of markets to 151. The company remains well behind both Verizon and AT&T, with T-Mobile quickly catching up to Sprint. T-Mobile also announced that it would offer LTE on wider channels in 90% of the top 25 markets by the end of 2013, versus the current 2x5 MHz deployment that both Sprint and T-Mobile are currently using.

    * Competitive intensity beginning to heat up. Both Sprint and T-Mobile have closed deals that provided capital and spectrum, creating a path forward for the two smaller players to better compete. However, we expect that Sprint may take until mid 2014 to approach competitive parity (especially for voice), and FY15 to differentiate on data; but T-Mobile should see churn improvement in FY13, which will affect Sprint, AT&T, and Verizon, in that order. Competitive intensity will affect both margins and capex costs as the four major operators compete on price and network quality.

    * Hard-line, versus pragmatic, DOJ stance remains cause for concern. The DOJ's hard-line stance regarding the need for four nationwide wireless players suggests less potential for a Sprint/T-Mobile US merger. The DOJ appears excited by the fact that wireless network operators have no choice but to invest, even if incremental returns are poor.

    * We are downgrading Sprint to Market Perform from Outperform. Our downgrade is based on expectations for a weak network position to persist amid increased competition from T-Mobile (in prepaid) and Verizon and AT&T (in postpaid). Our OIBDA forecasts are significantly below consensus.

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Other Analyst Ratings:

Analysts at Deutsche Bank  reiterated a “buy” rating on shares of Sprint Nextel Corp. in a research note to investors on Monday. Analysts at BMO Capital Markets cut their price target on shares of Sprint Nextel Corp. from $9.00 to $7.00 in a research note to investors on Monday, but they still have an “outperform” rating on the stock.

Two research analysts have a sell rating on Sprint, twenty-one have given a hold rating, eight have given a buy rating and one  has assigned  a strong buy rating to the stock. The company presently has an average rating of “Hold” and an average price target of $7.13.

http://www.watchlistnews.com/2013/07/31/sprint-nextel-corp-s-releases-quarterly-earnings-results-misses-expectations-by-0-25-eps/

Disclaimer: The author of this blog post does not hold stock in Sprint or any other telecom company!  We do not recommend buying individual stocks of any company.

FBR Research: Analysis of AT&T's latest earnings report + much greater wireless competition ahead!

From FBR Research Analyst David Dixon:

AT&T reported mixed 2Q13 results as the company responded to increased competitive intensity. Wireless churn deteriorated sequentially, offset by impressive postpaid net adds, largely driven by tablet growth. Management remains focused on prioritizing LTE network parity with Verizon to lower postpaid churn and expand wireless margins.

Smartphone adoption continued to increase nicely as AT&T sold 6.8 million smartphones, the highest level for the company in the second quarter, and also had the best-ever Android sales. At 88% of sales and 73% of the base, continued momentum is expected.

However, we believe AT&T (and Verizon) will experience increased competition in both the lower-end prepaid market (T-Mobile in FY13 and Sprint in FY14) and the higher-end postpaid market (Verizon). This may result in more-than-expected cost pressure.

More importantly, if Sprint can differentiate through Clearwire (something we will not see until mid FY14 at the earliest), AT&T may need to reconsider the acquisition of DISH Networks to improve its LTE spectrum position.

Note: Earlier this month, Clearwire shareholders approved Sprint buying the ~50% of Clearwire that it didn't already own.   Clearwire offers a nationwide wireless broadband network using spectrum in the 2.5GHz band. Sprint, which had previously owned about 50 percent of the company, is the only customer that Clearwire has for its wholesale network business. The company also has a retail business that offers wireless broadband service to consumers.   http://news.cnet.com/8301-1035_3-57592700-94/clearwire-shareholders-approve-sprint-takeover/

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Selected data points:

LTE buildout progressing well toward completion; what's next for AT&T?

Management expects to "substantially complete" its initial LTE buildout by next summer. In comparsion, Verizon's LTE network now covers 500 markets, and more than 99% of the company's 3G coverage, with additional LTE capacity to be added in key markets.

AT&T benefits from a highly invested and high-performance 3G HSPA+ network, but 3G traffic will not slow as rapidly, limiting refarming potential.

Competitive intensity beginning to ratchet up. Both Sprint and T-Mobile have closed deals that provided capital and spectrum, creating a path forward for the two smaller players to better compete. We expect that Sprint may take until early 2014 to reposition, but T-Mobile should see churn improvement in FY13, which will affect Sprint, AT&T, and Verizon, in that order.

Competitive intensity will affect both margins and capex costs as the four major operators compete on price and network quality, not on device exclusivity. Higher data usage will keep pricing rational, but if Sprint differentiates with Clearwire, AT&T may need to acquire DISH Networks.

The proposed Leap Wireless acquisition will help AT&T's spectrum position and may crimp T-Mobile in key LTE markets. Given public DOJ comments supporting a four-player wireless market and plans to restrict AT&T or Verizon in the incentive auctions, AT&T was wise to seek spectrum to improve its PCS spectrum position, increase leverage on Sprint to sell WCS spectrum in Texas, and potentially crimp T-Mobile US in key markets. Recall that Leap's spectrum holdings cover the PCS and AWS bands covering 137M points of presence (POPs).

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Note:  Mr. Dixon didn't discuss AT&T's Project Velocity IP (VIP), which has 3 components:  fiber to over 1K commercial buildings, U-Verse high speed Internet/TV service and IP-DSLAM high speed Internet but no TV.

At the June 12, 2013 IEEE ComSocSCV meeting, AT&T's Shiyama Clunie presented the highlights and progress of AT&Ts Project Velocity IP.  It's a major effort to expand AT&T’s wireless and wireline broadband network.  Under this initiative, which is underway now, AT&T expects to bring fiber to 1 million additional business customer locations, and its wireline IP network is expected to cover 57 million customer locations, by year-end 2015. These locations will have either U-Verse (video, Internet and voice) or U-Verse IP-DSLAM (high speed Internet and voice). AT&T also expects that its 4G LTE wireless network will cover 300 million people nationally by the end of 2014, and 99 percent of customer locations in AT&T’s wireline service area are expected to have high-speed Internet access through either IP wireline and/or 4G LTE wireless by year-end 2015. 

During its earnings call, AT&T reported on U-Verse progress:

"Total U-verse subs reached 9.4 million, while video subs topped 5 million customers for the first time. Total U-verse revenues grew better than 30%, and U-verse now represents more than 50% of consumer revenues. And even with little help from the economy, business wireline showed sequential revenue improvement and strategic business services grew by more than 15%. All this resulted in improved revenue growth, continued EPS gains and strong free cash flow even while investing more in our customers and in our Project VIP."

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References:

1.  AT&T Perspective on its most recent earnings report: http://www.att.com/gen/investor-relations?pid=282

2.  Transcript of AT&T Management Discussing most recent earnings: 

http://seekingalpha.com/article/1566022-at-t-inc-t-management-discusses-q2-2013-results-earnings-call-transcript

 

Is ITU Trying to Control/Manage the Internet as some pundits claim?

Disclaimer:  This article was stimulated by IEEE member Pat McClung on the IEEE member discussion group maintained by ComSocSCV.

 

In an editorial "The Internet at Risk," published in the March-April 2013 issue of Internet Computing, Google's Vint Cerf states:  "In some ways, the most pernicious proposals to limit the Internet's openness to users and applications comes from some of the members of the [ITU] ..."
http://www.computer.org/csdl/mags/ic/2013/02/mic2013020003.html

Pat McClung:  "Mr. Cerf goes on to describe the attempts of the ITU to put forward revised International Telecommunications Regulations treaty language (ITRs), that would have the effect of restricting or governing content or applications on the Internet."

Here's a Nov 27, 2012 Reuters post with add on commentary from Mr. Cerf:

"Google's Vint Cerf, the ordinarily diplomatic co-author of the basic protocol for Internet data, denounced the
proposed new rules as hopeless efforts by some governments and state-controlled telecom authorities to assert their power.

"These persistent attempts are just evidence that this breed of dinosaurs, with their pea-sized brains, hasn't
figured out that they are dead yet, because the signal hasn't traveled up their long necks," Cerf told Reuters."
===========================================================================
Opinion: Upon further investigation, this author finds no basis whatsoever for Mr. Cerf's claims, which seem out of context and misplaced.   I did some research and came up with report from the Fifth World Telecommunication/ICT Policy Forum   http://www.itu.int/en/wtpf-13/Pages/default.aspx
 
On the right upper side of that web page I clicked on Chairman's report http://www.itu.int/md/S13-WTPF13-C-0016/en
and extracted the following:
 
Dr Touré underlined the need to work together. ITU will continue its bridge-building role and can leverage its unique position as a neutral convenor, where Member States, Sector Members and other stakeholders can come together. The timing of this year’s WTPF, with its focus on International Internet-related public policy matters, was particularly appropriate – as we stand at a ‘tipping point’ between the Internet as a vital enabler of social and economic progress in the industrialized world, and the Internet as a valuable global resource and a basic commodity of human life everywhere. The WTPF can create a shared vision that can be transformed into effective action to bring connectivity to the two-thirds of the world's people who are still offline. He reminded delegates that WTPF is a forum for free-thinking debate and discussion on new and emerging issues.
Also found this item:
 
Significant progress on key issues of Internet Governance
 
http://www.itu.int/net/pressoffice/press_releases/2013/24.aspx#.UfRhtavn9jo
 
It's a tutorial leading up to the fifth ITU World Telecommunication Policy Forum, which is an ongoing series of CONFERENCES and not a standards meeting.  In particular:
 
"The run-up to the WTPF included three preparatory meetings of the Informal Experts Group – a cross-sectoral, multistakeholder group, comprising some 180 experts, which advised the Forum and supported the drafting of the Secretary-General’s Report which was the main input document to the conference."
 
http://www.itu.int/en/wtpf-13/Pages/report-sg.aspx
Conclusion:
   
The ITU World Telecommunication Policy Forum is not a standards body, but rather a series of conferences and forums.
A key point is that ITU is serving as a "neutral convener" where various members and stakeholders can come together for dialog and discussion.  ITU is not going to produce any rules or regulatory documents over how the Internet is to be controlled, governed, managed!  So in no way is it trying to exert control or govern the Internet.

The "new Sprint" has a lot of things going for it!

Disclaimer: this post is from the IEEE Member Discussion email group open to all current IEEE members.  Instructions to join are at http://comsocscv.org/  (Click on SUBSCRIBE)

From KC Star newspaper (Sprint HDQ is Overland Park, KS- near Kansas City):
 
July began with SoftBank Corp. in Tokyo buying 78 percent of America’s No. 3 wireless carrier.
SoftBank has pumped $5 billion into Sprint’s checkbook and installed its own founder, Masayoshi Son, as chairman. Sprint used some of that money to buyout its longtime wireless network partner Clearwire Corp.

 
After years of repairs to its reputation and struggles to overcome an ill conceived merger with Nextel, Sprint finally has the resources it needs to do battle.   “I have great hopes for Sprint,” said analyst Roger Entner at Recon Analytics. “We’re out of excuses.”


Investors are hoping for some details Tuesday on how the new partners will challenge Verizon, AT&T and T-Mobile.
What vision does SoftBank’s Son have for Sprint’s future? Mr. Son has said he won’t take part in the traditional quarterly chat session with Wall Street analysts, though some were looking forward to hearing from him.


Is a price war in Sprint chief executive Dan Hesse’s plans to lure customers away from AT&T and Verizon?
How quickly can Sprint overcome its laggard’s start in the industry-wide race to deliver faster Internet connections for smartphones with LTE technology? Short for Long Term Evolution, LTE makes videos run smoothly on smartphones, downloads apps quickly and posts photos online in a snap.

Read more here: http://www.kansascity.com/2013/07/26/4369472/sprint-to-deliver-quarterly-numbers.html#storylink=cpy

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From Mike Finegan, Sprint's Manager M2M Solutions Engineering and good friend of IEEE ComSoc SCV chapter:
 
A few highlights regarding the Sprint/Softbank combination:
 
-The new, combined Sprint and SoftBank company is already among the top three communications companies in the world in terms of size of our customer base and revenue.   Our buying power commands a position among the most powerful names in all of global business and places right up top in terms of all of our manufacturing partners’ biggest customers, globally.  
 
-Sprint now has a whopping 185 MHz of spectrum.   ATT has 106 MHz; VZ has 107 mhz.  Sprint greater access to frequency ranges may give our customers the advance of a network that can handle higher levels of bandwidth.
 
-Motley Fool/Alexander Cho writes on July 3:  “ Sell ATT and VZ:  Sprint has an Overwhelming Advantage”  
 
-$16B in capital will be invested in 2013 and 2014 as we build the world’s best network – a huge increase from our previous plans.
 
-A new innovation center will be built in the Silicon Valley to drive innovation and new technology with as many as 1000 employees.
 
-Guaranteed Unlimited is launched as an industry first!
 
-Headlines like: “Sprint/SoftBank Shake Up Wireless” and “Sprint:  Buy for Awesome Spectrum Position” light up the news.
 
-Deutsche Bank issues a buy rating and an $8 price target for Sprint.   Calls Sprint “the  new king of spectrum with more bandwidth available for LTE than all its national competitors combined”
 
 -We are now among the largest and strongest companies on Earth. We are investing more than ever in our network.   We are committed to be innovators in the industry and in the world of technology.

SDN work gains momentum in ITU-T SG 11 and 13; Workshop to Progress SDN standardization

Standardization work on software-defined networking (SDN), a key priority for ITU-T in 2013, is progressing well in ITU-T’s Study Group 11 (SG11) with a number of important specifications nearing maturity following a meeting of two specialized groups in June.SG11 is tasked with developing the signalling requirements and protocols on SDN. The work will align with the functional requirements and architectures developed by ITU-T’s Study Group 13. In addition a Joint Coordination Activity on SDN was recently established to coordinate the work.

Matt Lopez, NEC Corporation and Rapporteur on Question 4/11 Signalling requirements and protocols for Bearer and Resource control in emerging telecommunication environments: “ITU-T’s consensus-based standards process provides an opportunity for the industry to agree common objectives for the emerging SDN environment, and resulting standards will do much to unify industry players in their work to introduce SDN on a large scale.”

Draft Recommendations in progress include a document specifying the scenarios and signalling requirements using SDN technologies in Broadband Access Network (BAN). A software-defined BAN (SBAN) simplifies network configuration, making deployment of new services easier and improving broadband service provision. Working document is only available hto ITU-T members.

Another document provides a gap analysis of SDN work going on across ITU and other standardization bodies as well as a framework, requirements and architecture for signalling in SDN. Working document is available here (members only).In addition SG 11 experts are working on a Recommendation that describes the scenarios and signalling requirements for a unified intelligent programmable interface for IPv6 service deployment. This working document is only available to ITU-T members.

The next physical meetings of the groups focusing on SDN will take place November 2013 in Uganda. For updated information see ITU-T Study Group 11 homepage.  

http://www.itu.int/en/ITU-T/studygroups/2013-2016/11/Pages/default.aspx

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ITU’s standardization work on SDN started in ITU-T Study Group 13 – Future networks including cloud computing, mobile and next-generation networks. SG 13 standardizes SDN’s functional requirements and architectures, and SG 11 thus works closely with SG 13 as it builds on this work by developing SDN’s signaling requirements and protocols.

SG 11’s recent meeting in Geneva received contributions calling for new SDN work items, including:

  • Scenarios and signaling requirements for software-defined BAN (SBAN)
  • Framework of signalling for SDN
  • Scenarios and signalling requirements of unified intelligent programmable interface for IPv6

http://www.itu.int/ITU-T/newslog/Rising+Participation+In+ITU+Work+On+Protocols+And+Test+Specifications.aspx#.UfFbytKsiSp

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Workshop to Progress Software-Defined Networking Standardization

An ITU workshop on software-defined networking (SDN) will gather a global selection of standardization experts to progress SDN standards-development with one aim to establish efficient coordination  of future work.

SDN is a promising route towards the introduction and realization of network virtualization, a major shift in networking technology which will give network operators the ability to establish and manage new virtualized resources and networks without deploying new hardware technologies. ICT market players see SDN and network virtualization as critical to countering the increases in network complexity, management and operational costs traditionally associated with the introduction of new services or technologies.

SDN proposes to decouple the control and data planes by way of a centralized, programmable control-plane and data-plane abstraction. This abstraction will usher in greater speed and flexibility in routing instructions and the security and energy management of network equipment such as routers and switches.

The upcoming workshop responds to Resolution 77 - Standardization work in ITU-T for software defined networking agreed by the World Telecommunication Standardization Assembly (WTSA-12) in Dubai, UAE, 20-29 November 2012. SDN was emphasized as a strategic priority for ITU-T by the meeting of the Chief Technology Officer (CTO) Group, 18 November 2012 (The 2012 CTO Meeting Communiqué can be found here). The Global Standards Symposium (GSS-12) held the day preceding WTSA-12, 19 November 2012, acted on the recommendations of the CTO Group by taking SDN as one of its points of focus and feeding the conclusions of its SDN discussion into WTSA-12.

The workshop will take place at ITU Headquarters in Geneva, Switzerland, 4 June 2013, within the annual meeting of the ITU Telecommunication Standardization Advisory Group (TSAG), 4-7 June 2013. It will be co-chaired by Wei Feng, Huawei, China, Chairman of ITU-T Study Group 11 (Signalling requirements, protocols and test specifications); and Chae-Sub Lee, Kaist, Republic of Korea, Chairman of ITU-T Study Group 13 (Future networks including cloud computing, mobile and NGN). Confirmed speakers include representatives of ITU-T Study Groups 11 and 13; the University of Tokyo, Japan; MIIT/CATR, China; Cisco Systems; the ETSI Industry Specification Group on Network Function Virtualization (ISG NFV); and the Open Networking Foundation (ONF).

SDN Workshop Details at:

http://www.itu.int/en/ITU-T/Workshops-and-Seminars/sdn/201306/Pages/default.aspx



Infonetics Predicts 4.9% CAGR (2013 to 2017) for Telecom/Datacom Market; Asia vs RoW?

Market research firm Infonetics Research released excerpts from its annual Telecom and Datacom Network Equipment and Software report, which provides a big picture of the health of the overall market.

 TELECOM AND DATACOM MARKET HIGHLIGHTS:
.    Following a recession-induced drop in 2009, the global telecom/datacom equipment and software market grew 19% in 2010, 7% in 2011, and held steady (no gain) in 2012 at $172 billion
.    Going forward, Infonetics projects the telecom and datacom equipment and software market to grow at a 4.9% CAGR from 2013 to 2017, when it is forecast to hit $218 billion worldwide
.    During those 5 years, Infonetics expects service providers and enterprises to spend a cumulative $1 trillion on telecom and datacom equipment and software
.    The top 4 telecom/datacom equipment vendors in order by overall worldwide revenue market share are Cisco, Ericsson, Huawei and Alcatel-Lucent
.    Cisco maintains its commanding lead in the enterprise segment, while Ericsson is #1 in the larger service provider segment

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 "Even though there's tremendous uncertainty about the health of the global economy and prospects for economic growth in the short term, the telecom and datacom equipment and software market is on track to grow annually through 2017, driven by major network transformations," reports Jeff Wilson, principal analyst at Infonetics Research.

Michael Howard, co-founder of Infonetics and co-author of the report, adds, "Asia Pacific took the lead in telecom and datacom equipment spending in 2012, and we expect the region to continue leading at least for the next 5 years, contributing more than a third of global spending through 2017."
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Infonetics' annual telecom and datacom equipment and software report compiles worldwide and regional market size, vendor market share, and forecasts through 2017 from its reports that track enterprise and service provider gear. It is a subset of all data networking and telecom equipment for service providers, cable companies, and small, medium, and large organizations, and therefore excludes consumer electronics.

The 11 major categories of equipment and software tracked include broadband aggregation; broadband CPE; pay TV; optical network hardware; carrier routing, switching, and Ethernet; service provider VoIP and IMS; service provider mobile/wireless infrastructure; service enablement and subscriber intelligence; security; enterprise and data center networks; and enterprise communications.

Companies tracked include Alcatel-Lucent, Avaya, Brocade, Ciena, Cisco, Ericsson, Fujitsu, HP, Huawei, Juniper, Motorola, NEC, Nokia Siemens Networks, Samsung, Siemens, ZTE and many others.

To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp
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Alan's Opinion:

We think the telecom/datacom market is bi-furcated: Asia is doing well, but Rest of World (RoW) is struggling and not growing much.  In particular, the European market is "sagging," according to Bloomberg:   

European Plan to Boost Sagging Telecom Market Set for September

http://www.bloomberg.com/news/2013-07-09/european-plan-to-boost-sagging-telecom-market-set-for-september.html

Asian companies like Huawei, ZTE, and Samsung are gaining market share in the fiercely competitive telecom equipment market.  Huawei and ZTE also dominate broadband CPE with Taiwanese companies like Netgear, D-Link, Ubee Interactive, ZyXEL, Actiontec, and many others doing quite well.

We think that RoW telecom/datacom vendors are struggling to make a profit.  Moreover, VCs are not investing in such start-up companies, as they don't see a viable market in the next five years.  In fact, "network infrastructure" has become a dirty word to most VCs and angel investors.