Tuesday, November 8, 2011

Ericsson's Capital Markets Day: Holding Steady

Ericsson is forecasting that the market for service provider network equipment will grow at a 3% to 5% CAGR from 2010-2013 from a base of USD 94 billion in 2010. The market for mobile network equipment is expected to be a little faster at 6% to 8% CAGR over this same period.


While the demand for mobile broadband is surging worldwide and the industry in in the early stages of upgrading infrastructure for 4G, Ericsson cautioned that service provider spending in the near term may be affected by macroeconomic conditions. The company is maintaining its previous financial guidance.


At its Capital Markets Day conference in Stockholm, Ericsson executives offered in depth presentations ranging from the company's financial performance to key market trends and product strategy. A webcast of the event is archived online.


Some highlights:


  • For Service Provider network equipment, Ericsson estimates its share of the market for mobile infrastructure equipment at between 32% to 36%.


  • The market for 3GPP radio access network (RAN) equipment shows the strongest prospects for growth, with an 11% CAGR from 2010-2015, although the market for CDMA RAN+core will be in the decline.


  • North America has the fastest take-up rate for mobile broadband so far, driven by the highest smartphone penentration. The prevalent model that is working calls for subsidized smartphone handsets, tiered pricing, usage caps, and WiFi offload.


  • Europe is experiencing a large variation in mobile broadband uptake. LTE networks have been launched in the Nordics and Germany, and smartphone shipments are now over 50% with some operators. Western Europe has been slow with 4G rollouts. Here there is a focus on network sharing, outsourcing and new services. In Southern Europe, LTE auctions are recently concluded but the picture is affected by political unrest and weak economies.


  • For India, it is early days for mobile broadband and the 3G rollout is at a temporary peak. In China, there are now 952 million mobile subs, with 100 million on 3G. Three live LTE networks are in operation in Japan and Korea.


  • Ericsson has signed 47 managed services deals so far this year.


  • Ericsson is looking to expand licensing of its extensive intellectual property portfolio. The company holds 27,000 granted patents covering a wide range of technologies and the whole ICT value chain. The company claims to be the No. 1 holder of essential patents for 3G (WCDMA/HSPA) and the No. 1 holder of essential patents for LTE with about 25% of issued patents in this area. Ericsson already has a licensed program extending from devices through network access, transport and core platforms. The challenge is to enforce wireless royalties while licensing these patents to enable the vision of 50 billion connected devices. In short, Ericsson contends that any device with cellular connectivity needs a license to Ericsson's patents.


  • Ericsson highlighted its new SSR platform as a key enabler of 4th generation IP services. Ericsson calculates that 1 Hour of smartphone Angry Birds = 2422 Signaling Messages for the network. To handle signaling overload, Ericsson's new SSR routers can handle >150,000 Transaction Messages per second. The SSR uses deep packet inspection (DPI) to support new business models, such as charging per service: Internet browsing package, Social Networking package, etc.


  • By the end of the year, the RBS 6000 base stations will account for more than 95% of Ericsson's total RBS supply. The RBS 6000 has contributed to an increased market share in mobile infrastructure from 32% in May 2011 to today's estimated 36%.


  • In Managed Services, more than 20,000 operator staff have been transfered to Ericsson over the past few years, including 6,000 people from Sprint. The attrition rate for these employees after one year for most transfers is close to zero percent.
http://www.ericsson.com

National Emergency Alert Test Reveals Problems

At 2p ET on Wednesday, the U.S. Federal Emergency Management Agency (FEMA), the FCC, NOAA and communications service providers conducted the first-ever nationwide test of the Emergency Alert System. The test, which did not include mobile networks or social media sites, suffered numerous other gaps in quickly distributing the test message from the White House to TV and radio networks. FEMA said it will take several weeks to analyze the results.
http://www.fema.gov/

China Unicom Picks Alcatel-Lucent for GPON in 29 Provinces

China Unicom has selected Alcatel-Lucent for one of the largest fiber broadband access networks to date in China. China Unicom plans to extend its broadband access network with GPON technology in 29 provinces using Alcatel-Lucent's 7360 Intelligent Services Access Manager (ISAM) FX – the company's highest capacity fiber access platform. Financial terms were not disclosed.


“This project represents another major milestone in the rapid expansion of broadband in China. It also demonstrates our strong and growing leadership position in the FTTx market as we help accelerate availability of superfast broadband throughout China," stated Rajeev Singh-Molares, President, Asia-Pacific at Alcatel-Lucent.
http://www.alcatel-lucent.com

China Telecom and China Unicom Face Monopoly Inquiry

China Telecom and China Unicom reportedly are being investigated by China's National Development and Reform Commission for anti-competitive practices, including blocking the entrance of new players.
http://www.shanghaidaily.com

FCC and Cable Operators Announce $10/Month Connect Plan

The FCC and leading NCTA cable operators announced a plan to offer all eligible families two-years of $9.95 + tax broadband cable Internet, with a no installation/activation fee option and no modem rental fees (with an option to purchase a $10 modem). The Connect to Compete initiative aims to close the digital divide. One-third of all Americans – 100 million people – haven't adopted broadband at home, according to FCC stats.


The program has an in-kind value of more than $2.5 billion if all eligible families take the offer, which represent on average a 70% discount off monthly broadband services charges.


Eligible families must have at least one student enrolled in the Free School Lunch Program; not be a current
subscriber to broadband (or have subscribed in the last 90 days); and not have an overdue bill or unreturned
equipment to the participating service provider.


Participating Internet service providers include: Bend Cable, Bright House Networks, Cablevision, Charter,
Comcast (via Internet Essentials), Cox Communications, Eagle Communications, GCI, Insight, Mediacom,
Midcontinent, Sjoberg's Cable, Suddenlink, and Time Warner Cable.


The initiative also provides the opportunity to purchase discounted computers.
http://www.fcc.gov
  • In approving the Comcast-NBCU mega-merger, the FCC and the Department of Justice imposed a number of conditions and commitments which generally will remain in effect for seven years. One of these conditions was a requirement to make available to approximately 2.5 million low income households: (i) high-speed Internet access service for less than $10 per month; (ii) personal computers, netbooks, or other computer equipment at a purchase price below $150; and (iii) an array of digital literacy education opportunities.

Ericsson's Capital Markets Day: Holding Steady

Ericsson is forecasting that the market for service provider network equipment will grow at a 3% to 5% CAGR from 2010-2013 from a base of USD 94 billion in 2010. The market for mobile network equipment is expected to be a little faster at 6% to 8% CAGR over this same period.


While the demand for mobile broadband is surging worldwide and the industry in in the early stages of upgrading infrastructure for 4G, Ericsson cautioned that service provider spending in the near term may be affected by macroeconomic conditions. The company is maintaining its previous financial guidance.


At its Capital Markets Day conference in Stockholm, Ericsson executives offered in depth presentations ranging from the company's financial performance to key market trends and product strategy. A webcast of the event is archived online.


Some highlights:


  • For Service Provider network equipment, Ericsson estimates its share of the market for mobile infrastructure equipment at between 32% to 36%.


  • The market for 3GPP radio access network (RAN) equipment shows the strongest prospects for growth, with an 11% CAGR from 2010-2015, although the market for CDMA RAN+core will be in the decline.


  • North America has the fastest take-up rate for mobile broadband so far, driven by the highest smartphone penentration. The prevalent model that is working calls for subsidized smartphone handsets, tiered pricing, usage caps, and WiFi offload.


  • Europe is experiencing a large variation in mobile broadband uptake. LTE networks have been launched in the Nordics and Germany, and smartphone shipments are now over 50% with some operators. Western Europe has been slow with 4G rollouts. Here there is a focus on network sharing, outsourcing and new services. In Southern Europe, LTE auctions are recently concluded but the picture is affected by political unrest and weak economies.


  • For India, it is early days for mobile broadband and the 3G rollout is at a temporary peak. In China, there are now 952 million mobile subs, with 100 million on 3G. Three live LTE networks are in operation in Japan and Korea.


  • Ericsson has signed 47 managed services deals so far this year.


  • Ericsson is looking to expand licensing of its extensive intellectual property portfolio. The company holds 27,000 granted patents covering a wide range of technologies and the whole ICT value chain. The company claims to be the No. 1 holder of essential patents for 3G (WCDMA/HSPA) and the No. 1 holder of essential patents for LTE with about 25% of issued patents in this area. Ericsson already has a licensed program extending from devices through network access, transport and core platforms. The challenge is to enforce wireless royalties while licensing these patents to enable the vision of 50 billion connected devices. In short, Ericsson contends that any device with cellular connectivity needs a license to Ericsson's patents.


  • Ericsson highlighted its new SSR platform as a key enabler of 4th generation IP services. Ericsson calculates that 1 Hour of smartphone Angry Birds = 2422 Signaling Messages for the network. To handle signaling overload, Ericsson's new SSR routers can handle >150,000 Transaction Messages per second. The SSR uses deep packet inspection (DPI) to support new business models, such as charging per service: Internet browsing package, Social Networking package, etc.


  • By the end of the year, the RBS 6000 base stations will account for more than 95% of Ericsson's total RBS supply. The RBS 6000 has contributed to an increased market share in mobile infrastructure from 32% in May 2011 to today's estimated 36%.


  • In Managed Services, more than 20,000 operator staff have been transfered to Ericsson over the past few years, including 6,000 people from Sprint. The attrition rate for these employees after one year for most transfers is close to zero percent.
http://www.ericsson.com

National Emergency Alert Test Reveals Problems

At 2p ET on Wednesday, the U.S. Federal Emergency Management Agency (FEMA), the FCC, NOAA and communications service providers conducted the first-ever nationwide test of the Emergency Alert System. The test, which did not include mobile networks or social media sites, suffered numerous other gaps in quickly distributing the test message from the White House to TV and radio networks. FEMA said it will take several weeks to analyze the results.
http://www.fema.gov/

China Unicom Picks Alcatel-Lucent for GPON in 29 Provinces

China Unicom has selected Alcatel-Lucent for one of the largest fiber broadband access networks to date in China. China Unicom plans to extend its broadband access network with GPON technology in 29 provinces using Alcatel-Lucent's 7360 Intelligent Services Access Manager (ISAM) FX – the company's highest capacity fiber access platform. Financial terms were not disclosed.


“This project represents another major milestone in the rapid expansion of broadband in China. It also demonstrates our strong and growing leadership position in the FTTx market as we help accelerate availability of superfast broadband throughout China," stated Rajeev Singh-Molares, President, Asia-Pacific at Alcatel-Lucent.
http://www.alcatel-lucent.com

China Telecom and China Unicom Face Monopoly Inquiry

China Telecom and China Unicom reportedly are being investigated by China's National Development and Reform Commission for anti-competitive practices, including blocking the entrance of new players.
http://www.shanghaidaily.com

FCC and Cable Operators Announce $10/Month Connect Plan

The FCC and leading NCTA cable operators announced a plan to offer all eligible families two-years of $9.95 + tax broadband cable Internet, with a no installation/activation fee option and no modem rental fees (with an option to purchase a $10 modem). The Connect to Compete initiative aims to close the digital divide. One-third of all Americans – 100 million people – haven't adopted broadband at home, according to FCC stats.


The program has an in-kind value of more than $2.5 billion if all eligible families take the offer, which represent on average a 70% discount off monthly broadband services charges.


Eligible families must have at least one student enrolled in the Free School Lunch Program; not be a current
subscriber to broadband (or have subscribed in the last 90 days); and not have an overdue bill or unreturned
equipment to the participating service provider.


Participating Internet service providers include: Bend Cable, Bright House Networks, Cablevision, Charter,
Comcast (via Internet Essentials), Cox Communications, Eagle Communications, GCI, Insight, Mediacom,
Midcontinent, Sjoberg's Cable, Suddenlink, and Time Warner Cable.


The initiative also provides the opportunity to purchase discounted computers.
http://www.fcc.gov
  • In approving the Comcast-NBCU mega-merger, the FCC and the Department of Justice imposed a number of conditions and commitments which generally will remain in effect for seven years. One of these conditions was a requirement to make available to approximately 2.5 million low income households: (i) high-speed Internet access service for less than $10 per month; (ii) personal computers, netbooks, or other computer equipment at a purchase price below $150; and (iii) an array of digital literacy education opportunities.

Deca Technologies Targets Wafer Level Chip Packaging

Deca Technologies, a start based in Tempe, Arizona, announced its entrance into the market for wafer level chip scale packaging (WLCSP) services for the semiconductor industry.


The company will leverage the solar wafer manufacturing methods of SunPower Corp. and the financial, operational and manufacturing support from Cypress Semiconductor.


Deca's initial products include a series of WLCSP (Wafer Level Chip Scale Packaging) derivatives targeted at the current $1 billion-plus WLP (Wafer Level Packaging) market. Growth in WLPs continues to be driven primarily by the desire of handset OEMs to integrate more features and functionality into less space. Miniaturization, cost and performance benefits increasingly lead to a preference for WLP solutions. However, as traditional strip-based package technologies give way to advanced wafer-based methods, significant capital strain and cycle time challenges have burdened the supply chain.


Deca's investors include Cypress and SunPower. The new company is part of Cypress's Emerging Technology Division.

http://www.decatechnologies.com/

Cloudera Raises $40 Million for Big Data Apache Hadoop

Cloudera, a start-up based in Palo Alto, California, closed a $40 million Series D funding round to support its Apache Hadoop-based data management software and services.


Apache Hadoop is a powerful and disruptive open source technology that is used by some of the world's leading social media and ecommerce companies, including eBay, Facebook, LinkedIn and Twitter.


Cloudera said its goal is to make Hadoop an enterprise-ready solution by delivering software, training and support services that enable data driven enterprises to easily derive business value and actionable insights from structured and unstructured datasets. Since 2009, Cloudera has trained more than 7,000 students on Hadoop.


The new funding was led by Frank Artale of Ignition Partners and joined by existing investors Accel Partners, Greylock Partners, Meritech Capital Partners and In-Q-Tel.


"This investment validates the success and innovation that Cloudera has achieved to date and the enormous market opportunity for Big Data managed by Hadoop,�? said Mike Olson, CEO of Cloudera. http://www.cloudera.com

Fujitsu Labs and Furukawa Develop 50 Tbps Optical Interconnect

Fujitsu Laboratories and Furukawa Electric Co. disclosed the joint development of an optical interconnect technology that increases the density of fiber-optic lines connecting to a system backplane while enabling high-bandwidth internal communications at speeds of 50 terabits per second (Tbps), ten times faster than is possible with today's copper lines.


Conventional interconnects pass electrical signals over copper wires, making it difficult to generate transmission speeds of 10-25Gbps because simply increasing the number of copper lines leads to problems of waveform degradation and signal interference. Optical fiber has excellent characteristics but the limited space inside servers has made it difficult to accommodate a large number of fiber-optic lines, according to the companies.


The approach adopted by Fujitsu Laboratories and Furukawa Electric is to use thin, highly flexible optic fibers, along with high-density optical connectors made possible with multiple lanes, allows for line capacity to be increased from the existing figure of 500 lines to 2,000 lines. The prototype optical midplane carries 25Gbps on each of these lines for a total capacity of 50Tbps. http://www.fujitsu.com/

FBI's Operation Ghost Click Dismantles DNS Malware Ring

Operation Ghost Click, a two-year investigation by the FBI, has led to the arrest of six Estonians who are charged with running a sophisticated Internet fraud ring that infected millions of computers worldwide. According to the indictment, beginning in 2007, the cyber ring used DNSChanger malware to infect approximately 4 million computers, including about 500,000 infections in the U.S. of PCs belonging to individuals, businesses, and government agencies. The thieves were able to manipulate Internet advertising to generate at least $14 million in illicit fees. In some cases, the malware had the additional effect of preventing users' anti-virus software and operating systems from updating. http://www.fbi.gov/news/stories/2011/november/malware_110911/malware_110911

Cisco Posts Solid Results, Ahead of Expectations

Cisco posted sales of $11.3 billion for its first fiscal quarter ended October 29, 2011, with net income (GAAP) of $1.8 billion or $0.33 per share, and non-GAAP net income of $2.3 billion or $0.43 per share.


"We delivered a solid quarter," said John Chambers, Cisco Chairman and CEO. "We've completed the majority of our restructuring and have organized Cisco to successfully execute against our strategy of providing intelligent networks, architectures and integrated products that solve customers' business problems. Even in times of limited capital spending, intelligent networks are being deployed to drive new business, revenue and consumption models, enable new customer and employee experiences, and drive efficiencies. Cisco's leadership in networking, video, collaboration and cloud, offered together in an integrated architectural approach, uniquely positions Cisco as a strategic business partner."


Some notes from the conference call:


Cisco has now completed the majority of its restructuring.


High-end routing equipment orders were up 11%.


Looking at revenue growth YoY by customer segment:

Enterprise was +11%

Public Sector was +10%

Commercial was +12%

Service Provider was +16%


For Q2, Cisco is predicting 7-8% growth YoY but warns investors not to let expectations to get ahead of market conditions. The company sees minimal impact from flooding in Thailand. EPS is expected to $0.42 to $0.44.
http://www.cisco.com

Amazon Activates New Data Center in Oregon

Amazon Web Services has activated that offer low-cost, low-latency access to key services from the Western portion of the US. The new US West (Oregon) Region supports Elastic Compute Cloud (EC2), Simple Storage Service (S3), SimpleDB, and other cloud services. This is AWS' seventh Region and its fourth in North America. http://aws.typepad.com/aws/2011/11/now-open-us-west-portland-region.html

See also