From Scott Thompson of FBR Capital Markets:
We continue to expect the service provider march toward commodity hardware, NFV, and SDN technologies to accelerate through 4Q, with the impact beginning to show in guides as early as 4Q and more significantly in 1H14. We expect enterprise vertical to remain largely steady, at least relative to the changes taking place as webscale, government, and service provider verticals continue to shift toward cloud-based architectures.
Longer term, we continue to expect a marked shift in spend from routing into optical and from hardware into software.
Assessment of Juniper, F5 Networks and Motorola Mobility:
1. Juniper Networks (JNPR) is poised to top earnings estimates again. We are raising 3Q13 EPS to $0.34.
Juniper is scheduled to report 3Q13 earnings Tuesday, Oct. 22nd after the close, and to hold its earnings call at 5 p.m. EDT (877-407-8033). We expect the JNPR story to remain challenged, despite what we believe will be a strong quarter report. There does appear to be a substantial core routing upgrade developing in the service provider (SP) vertical. However, we expect competitive pressure from ALU could continue to rise, particularly in the core network. Additionally, we expect current core upgrades will be more muted and less routing intensive than past cycles. Longer term, we believe Juniper could be challenged to transition away from its legacy core routing and switching business and toward a more optical and software-based revenue stream. While our 12-month view on JNPR remains cautious, we raise our 3Q13 EPS estimate to $0.34, above the $0.31 consensus estimate. We are lowering our 4Q revenue estimates nearly 3% below consensus, driving our EPS estimate down to $0.34 for 4Q13.
Oct 23rd Update:
JNPR posted yet another quarter of record MX routing revenues, which drove 3Q results above consensus. While Juniper is performing well against consensus estimates, we are increasingly starting to question how long the MX product family can drive upside to results.
Carriers like AT&T and Verizon, which have each traditionally and consistently driven over 10% of revenues for years, are no longer doing so. This data seems to partially validate our thesis that carriers will spend less on traditional routing and switching going forward. In their place, however, is surging demand from web scale and cable companies, representing a diversification of the client base that we view positively. We are increasingly concerned that after more than four quarters of strong edge routing upgrades, Juniper continues to struggle to find products to serve as new sources of growth. New products, while reaching over $110M in revenues in 3Q, are contributing but remain ~10% of revenue. Regardless, Juniper continues to throw off an impressive amount of cash. We continue to believe, however, that the SP business is likely to deteriorate for Juniper, leaving its earnings power for 2014 well short of consensus.
2. F5 Networks (FFIV) positioned for a strong quarter.
F5 Networks is scheduled to report F4Q13 earnings after the close Wednesday, Oct. 23rd and will hold an earnings call at 4:30 p.m. EDT (800-857-3834, password "F5 Networks"). We expect F5's F4Q13 to reveal a business re-accelerating product growth. Enterprise is likely to remain robust on the back of new product sales and SP is likely to be improving due to an emerging trend where carriers are virtualizing special purpose hardware for NFV-like deployments. We continue to believe, however, that tech vertical (approximately 18% of revenues) may continue to slowly shift away from F5's traditional hardware platforms in favor of custom software-based load balancing solutions. While we expect shares of FFIV could run over the next few quarters, we believe the risk/reward profile of FFIV is less favorable than leading names in the optical sector.
3. Motorola Solutions (MSI) needs to deliver in 2H13. [Note that Motorola Mobility is now owned by Google]
Motorola Solutions is scheduled to report 3Q13 earnings before market open Wednesday, Oct. 23rd and will hold the earnings call at 8:00 a.m. EDT (866-952-1906, password "MSIQ313"). After a relatively weak 1H, management has positioned investors to expect a stronger performance in 2H13, particularly on the margin front. All eyes will be on MSI's government business as it is set to report what is normally its strongest quarter of the year, tapping strong order backlog built up in 1H13. We expect enterprise spend to continue to be soft as tablets and smartphones are increasingly substituted for ruggedized laptops and bar code scanners. MSI's share repurchase program is likely to pick up where organic growth leaves off this year, providing a near-term floor for shares. We remain on the sidelines in search of stronger organic growth.
Utility Telephone, Inc. is is an Integrated Communications Provider and Competitive Local Exchange Carrier (CLEC) which provides a variety of Internet, data and telephone services to businesses and non profit organizations in both California and Nevada.
Specific services include: Internet access and secure data services; private line services for dedicated point-to-point communications; local phone service (PSTN), business voice solutions, auto attendant, on-demand conference, hosted PBX-IP business trunking, music on hold, VoIP phone, and DSL and web server hosting services.
Unlike many other competitive carriers that resell tier 1 carrier services, Utility operates its own switching and fiber-optic OC-48 networks, including over 30 ILEC collocation sites and a datacenter in Los Angeles, CA.
Utility Telephone's Virtual Private Network (VPN) and IP-Multi-Protocol Label Switching (MPLS) are two robust and secure service offerings for business customers that want the benefits of a private network using managed IP transport.
1. VPN allows business locations to seamlessly communicate over a private and secure connection, sharing information and maximizing productivity across multiple locations.
2. IP-MPLS captures your data for specific user groups, establishing a private network that cannot be accessed by any unathorized viewers, whether they are in different buildings, cities or countries.
The IP- MPLS service has the following benefits for business customers:
- Reduces overhead
- Removes firewalls
- Improves performance-faster throughput and lower latency
- Simple implementation and configuration
- Capital investment savings (CAPEX)
This privately held company was founded in 1996 and has its headquarters in Stockton, California. Utility is noted for providing "Customer First" support and service to businesses within its serving areas. Long-term customer relationships are valued highly by the company's executive team.
You can read customer testimonials at: http://www.utilitytelephone.com/company_testimonials.php
The company has been a Better Business Bureau (BBB) Accredited Business since 10/14/2008.
For further info on the company, please contact me at: Michaelericweiss@yahoo.com
Regulation: All CLECs (and ILECs) operating in CA are regulated by the CA Public Utility Commision (CPUC). The CPUC serves the public interest by protecting consumers and ensuring the provision of safe, reliable utility service and infrastructure at reasonable rates, with a commitment to environmental enhancement and a healthy California economy.
Infonetics Research just released its latest OTN and Packet Optical Hardware report, which tracks optical transport network (OTN) switching and transport equipment and packet-optical transport systems (P-OTS).
OTN AND P-OTS MARKET HIGHLIGHTS
- In the 1st half of 2013 (1H13), worldwide OTN revenue (OTN transport and switching equipment) was up 23% from 1H12, to $3.9 billion
- OTN switching spending in North America more than tripled in 1H13, growing 80% from a year ago
- Fujitsu’s OTN hardware revenue market share spiked 152% in 1H13 from 1H12
- Globally, P-OTS equipment revenue is up 41% year-over-year in 1H13
- Incumbents Alcatel-Lucent, Ciena, Cisco, Fujitsu, and Tellabs are the P-OTS market leaders, but new players BTI, Cyan, Ericsson, and Transmode are challenging with pure-play P-OTS platforms
“OTN switching is experiencing breakout growth in North America and EMEA (Europe, Middle East, Africa), where service providers are adopting integrated WDM and OTN switching and rolling out 100G coherent in the core,” notes Andrew Schmitt, principal analyst for optical at Infonetics Research. Schmitt adds: “Meanwhile, P-OTS growth in the first half of 2013 was healthy as a result of tier-1 carriers ramping spending versus 2012. We’re seeing some of the SONET/SDH spending that went away come back in the form of increased packet-optical activity.”
Infonetics’ biannual OTN and packet optical report provides worldwide and regional market size, vendor market share, forecasts through 2017 and analysis for OTN transport and switching equipment and P-OTS metro edge and metro regional hardware, including port revenue forecasts by type and speed. Vendors tracked: Adtran, Adva, Alcatel Lucent, Ciena, Cisco, Coriant, Cyan, ECI, Ericsson, Fujitsu, Huawei, Infinera, NEC, NSN, Tellabs, Transmode, ZTE, and others.
Infonetics Research Brief: Optical
Week of October 14–18
Data highlighted in this research brief:
- Coherent 100G WDM shipments tripling this year
- Operators name Ciena, ALU, Cisco and Huawei tops in P-OTS
- 100G network port revenue to surpass $6 billion by 2017
- North America OTN switching revenue more than triples in 1st half of 2013
Research & Markets: Optical Transport Network (OTN) Equipment - Global Strategic Business Report
This report analyzes the worldwide markets for Optical Transport Network (OTN) Equipment in US$ 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.
Infonetics: M2M services to hit $31 billion, M2M connections to top 4 billion by 2017+ Other M2M mkt forecastsThu, 10/10/2013 - 22:08 — Alan Weissberger
Infonetics Research released excerpts from its new M2M Connections and Services by Vertical report, which provides market size, analysis, and forecasts for machine-to-machine (M2M) connections and services by technology, vertical, and geographic region.
"M2M is one of the fastest-growing major new segments for service providers," affirms analyst Godfrey Chua, who directs Infonetics Research's M2M and Connected World program. "We forecast global revenue from M2M services to more than double between 2012 and 2017, from just under $15 billion to $31 billion."
"What's often overlooked about M2M is that it will be delivered to the world by way of a portfolio of access technologies," Chua adds. "Cellular networks represent the most meaningful revenue opportunity for operators, but by far the most popular way to connect to M2M services is via PAN (personal area network) wireless technologies, such as WiFi, Zigbee, Bluetooth, and IP500, which do not generate connection revenue. It's critical that mobile operators incorporate a broader view of the various M2M access technologies into their M2M strategies."
M2M MARKET HIGHLIGHTS
. There were nearly 1.4 billion M2M connections worldwide in 2012, with PAN wireless technologies comprising the vast majority
. Making up just under 190 million connections today, M2M connections via cellular and other WAN wireless technologies are projected to nearly triple by 2017, becoming the largest growth engine for operator revenue
. More than 16% of total M2M service revenue, almost $2.4 billion, is derived from M2M "backhaul" services
. The automotive, transport, and logistics sector made up 1/3 of total M2M service revenue in 2012, driven by vehicle tracking, navigation, and delivery applications
. North America and Europe are the key centers of M2M service growth, together accounting for 72% of the total market
. In 2012, China Mobile overtook AT&T in M2M connections leadership, but AT&T remains the revenue leader due to higher ARPC (average revenue per connection)
ABOUT THE M2M REPORT
Infonetics' M2M connections and services report analyzes M2M market drivers, M2M ecosystem players, and M2M technologies to help businesses make informed decisions and plans related to the M2M market. The report provides worldwide and regional market size, forecasts through 2017, and trends for M2M connections and services by technology (GSM/GPRS/EDGE, CDMA2000/EV-DO, W-CDMA/HSPA, LTE, TD-SCDMA, cellular, other WAN wireless, PAN, wireless, wireline, backhaul) and vertical (utilities/smart grid, automotive/transport/logistics, security/surveillance, retail/vending, healthcare, other).
The report includes an M2M Strategies Tracker with activity by mobile operators including AT&T, China Mobile, China Telecom, Deutsche Telekom, Everything Everywhere, KDDI, KT, Orange, Sprint, Telecom Italia, Telefónica, Telenor Group, TeliaSonera, T-Mobile, Verizon, and Vodafone. To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp.
RELATED RESEARCH http://www.infonetics.com/market-research-report-highlights.asp
. Latest Infonetics M2M and Connected World research brief: http://bit.ly/GIr8Ot
. Mobile M2M module segment of the M2M market hits $1.5 billion
. APIs playing key role in service delivery platform and M2M markets
. W-CDMA driving worldwide smartphone market
. Survey identifies operators' LTE deployment challenges, top LTE vendors
. Infonetics launches M2M and Connected World market research program
. Operators look to monetize networks, stave off OTT threat via service delivery platforms
. Analyst note: M2M Ecosystem: Apple Alumni and Innovation in M2M
. Analyst note: Huawei Looks to Sprint Ahead in M2M
. Analyst note: M2M in Emerging Markets: the Transport Vertical, an Early Business Model, and the OTT Challenge
UPCOMING M2M REPORTS, SURVEYS & SCORECARDS
Download Infonetics' 2013 market research brochure, publication calendar, events brochure, report highlights, tables of contents, and more at http://www.infonetics.com/login.
. Infonetics' new 2014 Market Research Lineup
. Mobile M2M Modules: Market Size and Forecasts (Oct.)
. M2M Strategies by Vertical: North American Enterprise Survey (Oct. 2013)
. M2M Strategies: Global Service Provider Survey (Nov. 2013)
. Worldwide M2M Service Provider Leadership Scorecard (Dec. 2)
. Analyst Research Notes CRS: M2M and Connected World (Ongoing)
Join analyst Godfrey Chua Oct. 22 at 11:00 EDT for The Business Rationale for M2M, a live webinar on M2M market drivers, key verticals, applications, challenges and real-world examples:
TO BUY INFONETICS REPORTS, CONTACT:
N. America (West), Asia Pacific: Larry Howard, firstname.lastname@example.org, +1 408-583-3335
N. America (East), Midwest, L. America: Scott Coyne, email@example.com, +1 408-583-3395
EMEA, India, Singapore: George Stojsavljevic, firstname.lastname@example.org, +44 755-488-1623
Japan, South Korea, China, Taiwan: http://www.infonetics.com/contact.asp
Another view of the M2M Market:
According to a new market research report, “Machine to Machine (M2M) Market” Global Forecast & Analysis (2012 - 2017) by Hardware Components, Technologies & Applications published by MarketsandMarkets, the total M2M market is expected to reach $85.96 billion by 2017 at a CAGR of 26.1% from 2012 to 2017.
Browse 83 tables spread through 195 pages and in-depth TOC on “Machine to Machine (M2M) Market Global Forecast & Analysis (2012 – 2017) by Hardware Components [Sensors, Actuators, RFID, Memory, Processor & ADC/DAC, Power Module, Communication Module], Technologies [2G, Ethernet, Powerline, ZigBee, Wi-Fi] & Applications [Consumer Electronics, Automotive & Transportation, Retail, Utilities, Security & Surveillance, Healthcare]”.
Latest Technology Watch Report: spatial standards for the IoT
ITU-T’s latest Technology Watch report introduces readers to location (spatial) standards and their role in enabling the Internet of Things, describing how communications infrastructure has increased people’s associations with the natural and built environment as well as how this can be leveraged to improve governance and service delivery by revealing new insights into how we interact with one another and the services and infrastructures that surround us.
Authored by staff and members of the Open Geospatial Consortium (OGC), with support from ITU-T, the report is titled “Location matters: Spatial standards for the Internet of Things” and can be downloaded free of charge here.
The report discusses the technologies and standards emerging in support of location-based services (LBS), analyzing shortfalls in interoperability and highlighting where global standardization can tap the full potential of these fast-maturing technologies and the valuable data they return.
Spatial standards’ role in the marketplace is critiqued with a view to uncovering clear trends or market drivers, and readers will discover that location matters in a wide range of sectors, with examples being made of emergency and disaster management and response; smart infrastructure; smart water management; and, of course, transportation.
The report goes on to describe the spatial standards landscape, looking at the activities of the involved standardization bodies and concluding with an analysis of the greatest obstacles to be overcome in the spatial standards arena.
New ITU standards on cloud computing security & digital object architecture
ITU members have agreed new international standards (ITU-T Recommendations) outlining security considerations essential to cloud computing and, crucial to the long-term preservation and utility of IP-based resources, a ‘framework for the discovery of identity management information’ to enable interoperability across heterogenous information systems.
Recommendation ITU-T X.1600 “Security framework for cloud computing”, having reached first-stage approval (‘determined’) and now undergoing a final review, describes security threats in the cloud computing environment and, through a framework methodology, matches threats with the security capabilities advised to be specified in mitigating them. ITU-T X.1600 will act as a ‘handbook’ guiding the future standardization of identified threat-mitigation techniques; in addition providing an implementation reference for systems-level cloud security.
Recommendation ITU-T X.1255 “Framework for the discovery of identity management information”, approved and soon to be freely available on ITU’s website, details an open architecture framework in which identity management (IdM) information – identifying ‘digital objects’ and enabling information sharing among entities including subscribers, users, networks, network elements, software applications, services and devices – can be discovered, accessed and represented by heterogenous IdM systems representing IdM information in different ways, supported by a variety of trust frameworks and employing different metadata schemas.
ITU-T X.1255 lays out a framework that enables discovery of identity-related information and its provenance; identity-related information attributes, including but not limited to visual logos and human-readable site names; and attributes and functionality of applications. The framework, in addition, describes a data model and protocol to enable meta-level interoperability in the management of this information across heterogeneous IdM environments.
The Recommendation is a first step towards the Digital Object Architecture (DOA) advocated by the Corporation for National Research Initiatives (CNRI), which is intended to achieve the “universal information access” possible with uniquely identifiable digital objects structured so as to ensure their machine and platform independence.
For a succinct description of the history, motivation and promise of the DOA, see Peter J. Denning & Robert E. Kahn, “The Long Quest for Universal Information Access”, Communications of the ACM, Vol. 53 No. 12, Pages 34-36.
The new Recommendations were agreed at a meeting of ITU-T Study Group 17 (Security) in Geneva, 26 August to 04 September, which also saw the establishment of three new work items, on: •high-speed Abstract Syntax Notation (ASN.1) Octet Encoding Rules (OER) needed by the financial services sector to gain milliseconds on the trading floor; •updating the Cryptographic Message Syntax (CMS) to eliminate all obsolete ASN.1 features in the interests of making the CMS usable with all ASN.1 standardized encoding rules; and, •new challenges for Public-Key Infrastructure (PKI) standardization presented by mobile networks, machine-to-machine (M2M) communication, cloud computing and smart grid.
More information on the work of ITU-T Study Group 17 can be found at: http://www.itu.int/en/ITU-T/studygroups/2013-2016/17/Pages/default.aspx
ITU-T SG 13 Chairman Chae Sub Lee explains the importance of ITU’s work on Software Defined Networks (in Korean with English subtitles): http://www.youtube.com/watch?v=biCpFf5oCd8&list=PLpoIPNlF8P2PacVXmmIdJDVhJjk4ptutO&index=23
ITU-T work on SDN can be accessed through their new SDN portal: http://www.itu.int/en/ITU-T/sdn/Pages/default.aspx "
"SDN is considered 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."
Aren't you a little tired of hearing all the rosy forecasts for deploying small cells- both nano base station and femtocells- in cellular networks as a solution to the mobile data capacity crunch? Infonetics says to sober up to the reality that it's not happening nearly as fast as pundits predicted! Turns out that Asia Pacific will drive small cell growth according to the market research firm.
Noted telecom market research firm Infonetics just released excerpts from its latest Small Cell Equipment market size and forecast report, which tracks 3G microcells, picocells, and metrocells and 4G LTE mini eNodeBs and metrocells.
SMALL CELL MARKET HIGHLIGHTS:
Wireless network operators' chief purpose for deploying small cells is to complement and enhance the macrocell layer from a capacity standpoint, to enrich the mobile broadband experience. Beginning in 2014, 4G metrocells will become the main growth engine in the small cell market, driven by in-building deployments in retail malls, stadiums, transportation stations, hotels, and event venues . Asia Pacific is where the action is and where it will stay through 2017: The largest macrocell network density, with more than 100,000-site footprints, can be found in China, Japan, and South Korea. Infonetics forecasts the global small cell market to grow at a 48% compound annual growth rate (CAGR) from 2012 to 2017, to $2.4 billion
"The large service providers remain committed to their small cell deployment plans, but the pace of deployment is much slower than expected due to a sad reality: Small cell and macrocell rollouts share nothing in common," explains Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.
Téral continues: "Each technology requires its own internal business processes, which have been in place for decades with macrocells but have to be built from the ground up for small cells taking into consideration things like footfall, building dimensions, backhaul availability, and wireless technology. There is no cookie-cutter template for small cell deployments!"
In an email to this author, Stéphane Téral wrote: "We don’t do market shares for this because the market is too small! Sounds logical, right, this is small cell after all!"
Co-author of the report Richard Webb, directing analyst for microwave and carrier WiFi at Infonetics, adds: "Given that service providers are in the process of retooling their plan of attack, we're not expecting the small cell ramp to happen in 2013."
Infonetics' biannual small cell report provides worldwide and regional market size, forecasts through 2017, analysis, and trends for 3G microcells, picocells, and metrocells and 4G (LTE) mini eNodeB and metrocells. The report also includes a small cell strategies tracker. Vendors tracked: Airspan, Airvana, Alcatel-Lucent, Alvarion, Argela, BelAir, Contela, Ericsson, Huawei, ip.access, Juni, Minieum, NEC, NSN, Samsung, SK Telesys, SpiderCloud, Ubiquisys, ZTE, and others.
To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp
Other Small Cell Market Forecasts:
AT&T is expanding its Higher Speed U-verse Internet service to five more states. In addition to the 17 states where the new speeds have already launched, U-verse High Speed Internet Power will be available to eligible residential and small business customers in selected markets in Arkansas, Kansas, Missouri, Oklahoma and Texas. High Speed U-Verse subscribers will get up to 45 Mbps downstream and 6 Mbps upstream, beginning 29 September 2013. AT&T plans to upgrade top tier U-verse speeds to up to 100 Mbps in the future.
Comment: Note that the "last mile" (or last few kilometers) U-Verse transport is over 2 wire copper -with VDSL vectoring- for all but greenfield build-outs. The greenfield - new buildouts- will get fiber to the premises, according to AT&T. AT&T’s move forward with U-verse is another example of telcos leveraging existing, inexpensive copper lines, vectored VDSL technology, and fiber to the cabinet to achieve speeds up to 100 Mbps.
In other AT&T news, the telco is launching its Digital Life smart home service in Milwaukee, Charlotte, Hartford, Jacksonville, Oklahoma City and Tulsa. Including the new markets, Digital Life will be available in 45 markets, with plans to launch the service in up to 50 markets by the end of 2013.
With Digital Life, customers can use their existing home broadband provider, and any wireless phone service, and enjoy the security and convenience of a home management system with the flexibility to meet their unique needs.
-- Actively Protected & In Control: The foundation of Digital Life is complete home security with 24/7 professional monitoring that allows you to know what is happening at home, or where an event has occurred. Through AT&T-owned and operated, U.S.-based monitoring centers, professionals will respond to emergencies and alert police and fire authorities.
-- Seamlessly Connected: Digital Life is an all-digital, fully integrated, wireless home management system, giving customers flexibility to manage their home from their smartphone, tablet or PC. Our takeover module lets you easily extend your existing security system and investment. The Digital Life application is available on most web browsers. Apps are available for iOS, as well as Android, BlackBerry and Windows Phones. To ensure customers' privacy is protected, Digital Life has a secure log in system each time the app is opened from any Internet-connected device.
-- Amazingly Simple & Intuitive: A user-friendly application was designed to be as simple as possible, making it easier than ever to manage your home. The Digital Life application gives customers control over cameras, door locks, lights, thermostats, small appliances and more by setting alerts or programs to manage your home. It's all integrated into one simple system.
-- Personalized & Flexible: Digital Life provides total flexibility so you can personalize your home to adapt to everyday life -- with custom notifications and scheduled tasks. Add devices and solutions anytime, as your needs grow, or your lifestyle changes.
"AT&T remains committed to providing our customers with easy, fast and affordable ways that allows them to manage and secure their homes all from the touch of their smartphones, tablets and PCs," said Kevin Petersen, president, Digital Life, Inc. "With the launch of these six new markets, we're looking forward to making Digital Life available to more customers throughout the country."
Comment: AT&T (as well as VZ) can now offer a 5-play for residential customers: high speed internet, VoIP, and video services using U-Verse (FiOS in the case of VZ) and wireless/mobile 3G/4G-LTE service using their cellular network. Sprint can't make this claim as it sold off its local telco wireline operation to Embarq, which was acquired by Century Link several years ago.
FBR's Scott Thompson wrote:
The platform, which comes in three different sizes (6000-core, 4000-aggregation, 2000-edge), dramatically simplifies
high-end networking for service providers. It is a family of converged optical routers that provides a glimpse into Cisco's strategy for the network transformation as it blurs the lines between optics, switching, and routing. Cisco's acknowledgment that network architectures are undergoing significant change is an important shift in tone from a year ago, when Cisco's marketing message seemed to question whether the transformation was necessary or even taking place. Cisco seems to position the NCS platform as an overlay fabric that "glues" the existing network infrastructure together. We see the NCS launch as Cisco's acknowledgment that a multi-product, legacy network design will not work going forward, but we question if the focus on an additional piece of hardware is a step in the right direction. We expect carriers could, over several years, use it to simplify and displace many traditional functions of edge, aggregation, and core of the network. Meanwhile, we continue to believe carriers are likely to spend significantly less with vendors like Cisco as early as calendar 4Q13.
* Cisco has the right intentions, but will carriers adopt the strategy? The NCS solution seems to be hardware intensive and contingent on sizable capital investment. This runs counter to our checks that indicate capex trends at telcos in 2H13 and FY14 will not be as strong as they were in 1H13. Recall that AT&T's CEO Randall Stephenson recently confirmed that AT&T is driving change, which is resulting in cost savings of nearly 70% versus NCS's targeted TCO savings of 45%. We believe other SPs will follow suit and start changing buying patterns over the next six to 18 months as they migrate from current proprietary hardware systems to "bare metal" commoditized hardware.
* Could NCS affect Cisco's existing product portfolio? We see Cisco's NCS platform as a near-term catalyst to help offset slumping routing and switching growth and market share. However, we need to take some time to analyze the impact of collapsing the routing, switching, and optical layers into a single platform. At first pass, allowing operators to aggregate layers and simplify the network design could diminish demand for stand-alone routers, switches, and optical transport in total. We also remain concerned about the pricing models associated with the platform. Industry analysts have indicated Cisco has been less than transparent with pricing detail, which is not a positive sign.
Press Release: Cisco Delivers Network Convergence System to Power "Internet of Everything"
Cisco this week introduced the Network Convergence System (NCS), a network fabric family designed to help service providers handle rapidly growing volumes of Internet traffic in cloud, mobile, video and machine-to-machine applications. A key focus for NCS is the “Internet of Everything” - the trillions of programmable device-driven events generated by networked devices and sensors.
NCS is a solution combining hardware, software and silicon, featuring the recently announced nPower X1 integrated network processor. It is designed to help service providers build services and capabilities to build business from the explosion of data being generated by new devices being used to monitor our world. Cisco cites data from Machina Research projecting market opportunities of $174 billion in health care, $284 billion in manufacturing and $850 billion in smart homes.
Addendum from FBR's Scott Thompson:
In an article published today on Barron's Tech Trader Daily, Cisco's CEO John Chambers took a giant leap forward in reestablishing the networking vendor's credibility. After months of Cisco's marketing machine denying that white box and cloud services are a threat, Chambers set the record straight.
According to the publication, "when asked what Cisco's biggest competitive threat is, Chambers mentioned that at or near the top of the list is service providers who just buy cheap 'white box' routers and switches." We applaud CEO Chambers for his candidness and believe it sets Cisco on a solid foundation to begin to publicly address (and correct) one of several significant threats the business faces. While it is encouraging to see that CEO Chambers may be focused on the right risks, it also makes us question why Cisco's marketing message has been misaligned with how executive management truly perceives the business environment.
CEO Chambers also stated that Cisco may compete against the likes of Amazon, which could offer IT as a service (IaaS) on a much cheaper network infrastructure and at a fraction of the price, by training its sales force to sell against it. We are skeptical of this strategy and do not believe that the solution will be that simple.
While we view today's announcement as the second positive step forward in as many days, we look forward to seeing Cisco come out with good solutions for its very real threats before we become more comfortable with the direction that the company seems to be heading.
AT&T CEO Randall Stephenson today affirmed his company's interest in investing in Europe at "good value," saying the regulatory environment precluded the company from making significant deals in the U.S. "We have pretty much written off that any kind of large-scale deal in our sector is going to get done," he told an investor conference. Stephenson's remarks came on the heels of Vodafone Group's sale of its Verizon Wireless asset, a move that could open up the European market for AT&T. Stephenson touted the company's stable balance sheet and Verizon Communications' "eye-opening" ability to sell $49 billion in bonds earlier this month
AT&T sees room to move the European market in the direction of the U.S. by investing in networks, shifting pricing strategies to encourage mobile data use and collecting more revenue as use increases. At the same time, heavy competition, declining revenue and the regulatory environment pose risks.
The European mobile industry feels consolidation is overdue. While AT&T remains interested, Mr. Stephenson said Tuesday that public-policy issues, especially in standardizing spectrum regulation, are holding the region back. Unlike the U.S., where spectrum licenses have an indefinite life, Mr. Stephenson said licenses in Europe might have a 10- to 12-year time span. "It slows things down," he said. "You think differently about investing in that spectrum."
Telecom Council TC3 Wireless Session Quicktakes & Highlights: Sept 18-19, 2013 at Juniper Networks in Sunnyvale,CASun, 09/22/2013 - 20:50 — Alan Weissberger
In fact, the world’s largest cellco has gone its usual route of breaking its contract into a large number of chunks and including just about all the contenders in the mix – nine equipment suppliers have been selected.
This approach can be complex to manage, in terms of a harmonized network deployment across China’s scattered and diverse regions. However, it gives Mobile access to the innovations and brainpower of as many companies as possible, which it regards as critical as it builds the world’s largest platform for TD-LTE.
The operator has been determined not to be left in a technology backwater as it was with its TD-SCDMA 3G network, and has been putting its considerable weight behind getting every infrastructure and device maker to support a TD-LTE ecosystem. It is also working closely with other holders of unpaired spectrum round the world to encourage build-outs and roaming deals, and so drive economies of scale.
China Mobile has already been working with a number of vendors on its trial TD-LTE build-outs, which are larger and more service-rich than many fully commercial deployments in other countries. However, it will only be able to turn on full commercial services once it receives its 4G licence, expected late this year or early 2014. Therefore this new round of contracts is the largest so far, with a total value of CNY20bn ($3.27bn), though it certainly will not be the last chance for suppliers to get a piece of the huge network.
Together, the companies will build a network covering 31 provinces with 207,000 TD-LTE base stations. The roll-out will be closely watched round the world, especially by other TDD operators such as Sprint/Clearwire in the US, Sprint’s majority owner Softbank of Japan, and Bharti Airtel and Reliance Infotel in India. However, there will be lessons for the wider LTE community too, since Mobile is increasingly taking on the role familiar among Japanese and Korean carriers – experimenting with new architectures, and driving suppliers' R&D programs accordingly, a process which can inject significant funds into next generation architectures, and also goes a long way to defining '4G+' platforms for the whole world.
For instance, China Mobile has been running extensive trials of Cloud-RAN architectures, and wants to scale these up dramatically to support 100 or more cell sites in the macro layer, with all their baseband processing virtualized in the cloud. This approach to network design is likely to become increasingly mainstream, and many of the rules will be established by this Chinese deployment. Here Alcatel-Lucent will be particularly important (along with other C-RAN partners like Intel and ZTE). ALU may have received only about 11% of the deal, reportedly, but it has worked closely with Mobile on a TDD version of its lightRadio design, which will be key to C-RAN and HetNet deployments.
The cellco also aims to be a leader in small cells (it calls its own version of this technology the ‘nanocell’), both for LTE and Wi-Fi (where it already accesses a network of perhaps two million hotspots). Therefore it will move quickly to a full HetNet, in which the various layers of cells, in different bands, will interwork fully to create a seamless pool of capacity. It has the advantage of a relatively clean slate, a huge budget and a vast resource of sites with fiber backhaul. Few will be able to emulate that elsewhere, but they will certainly be able to study the possibilities of the new architectures when deployed at scale."
2013 SPIFFY Award Nominees were selected by the 25 members of the Telecom Council’s Service Provider Forum (SPIF) from among over 100 early-stage representing the broad a range of telecom products and services who presented in Telecom Council meetings from June 2012 to May 2013. But only seven start-ups were selected for awards.
The winners of the 2013 SPIFFY Awards are: