Monday, July 23, 2012

TI Posts Revenue of $3.34B, Sees Cautious Market

Texas Instruments posted Q2 revenue of $3.34 billion, net income of $446 million and earnings per share of 38 cents.  EPS includes 6 cents of charges associated with the company's September 2011 acquisition of National Semiconductor and restructuring.

"TI revenue in the second quarter was about as we had expected," said Rich Templeton, TI's chairman, president and CEO.  "Our Analog and Embedded Processing segments grew sequentially, while our Wireless segment declined.   "Although we believe customers and distributors have low inventory levels, the global economic environment is causing both to become increasingly cautious in placing new orders.  Our backlog grew last quarter but orders slowed in the month of June and our backlog coverage for September is lower than normal.  As a result of this increased uncertainty, we currently estimate that our revenue in the third quarter will be about even with last quarter and below our seasonal average growth rate."

Cisco Eliminates 1,300 Jobs

Cisco will eliminate 1,300 jobs -- roughly 2% of its global workforce -- as a cost-cutting measure.

Cisco's next quarterly financial report is expected August 15.

  • In July 2011, Cisco announced a workforce reduction of approximately 6,500 employees, including approximately 2,100 employees who elected to participate in a voluntary early retirement program.

Ciena Supplies Metro Net for Israel Credit Cards

Cal (Israel Credit Cards Ltd) has selected Ciena and its partner Telrad to build a high-capacity, low-latency private optical network connecting its new data centre in Yehud to its main facilities in Giv’atayim. The metro network uses Ciena’s 4200 Advanced Services Platform to support two 10G Ethernet and four 4G Fibre Channel connections between the data centres. Cal has leased two dark fibre links between its sites to be used as active-active links, for which Ciena’s technology provides a very low latency solution.

Riverbed Hits Q2 Revenue of $198 Million, up 9%

Riverbed reported GAAP revenue for Q2’12 of $198 million, an increase of 9% compared to $182 million in the first quarter 2012 (Q1’12) and an increase of 17% compared to $170 million in the second quarter 2011 (Q2’11). GAAP net income for Q2’12 was $18 million, or $0.11 per diluted share.

“We executed well in the second quarter, driving stronger sales of our new Steelhead and Cascade platforms, demonstrating continued demand for performance-improvement technologies," said Jerry M. Kennelly, Riverbed president and CEO. “Revenue grew across all major geographies and revenue growth accelerated across our core product offerings. Looking forward, we believe our expanded product offerings and partnerships will further extend our reach to new customers and market segments."

Juniper Posts Revenue of $1.07 Billion, Down 4% YoY

Juniper Networks' Q2 revenue increased 4% sequentially, and decreased 4% on a year-over-year basis, to $1,074 million. GAAP net income came in at $58 million, or $0.11 per diluted share, and non-GAAP net income of $103 million, or $0.19 per diluted share, for the second quarter of 2012.

"Juniper's second quarter results delivered sequential top line growth as a result of our focus on execution," said Kevin Johnson, CEO of Juniper Networks. "New products continued to gain traction in the marketplace with key customer wins across our portfolio. In a challenging macro environment, we remain focused on our operational execution, delivering great products, driving revenue and managing our cost base."

ZTE Lands US$281.5 million Contract with China Telecom

ZTE announced a contract valued at US$281.5 million contract for the largest share in China Telecom’s 2012 CDMA Purchase Project. Through this project, ZTE will gain a cumulative share of 43.5 per cent of China Telecom’s CDMA network. ZTE will supply its Uni-Ran solution and relevant services in over 220 cities of 27 provinces across China.

“We’re very pleased to join hands with China Telecom to promote healthy development of the CDMA field,�? said ZTE Vice President Fan Xiaobing. “ZTE’s Uni-Ran solution will enhance network services and compliment China Telecom’s operations, filling the network evolution needs.�?

Broadcom Posts Record Revenues of $1.971 billion – Up 9.7% YoY

Broadcom reported record net revenue for the second quarter of 2012 of $1.971 billion, up 7.9% compared with the $1.827 billion reported for the first quarter of 2012 and an increase of 9.7% compared with the $1.796 billion reported for the second quarter of 2011. Net income computed in accordance with U.S. generally accepted accounting principles (GAAP) for the second quarter of 2012 was $160 million, or $.28 per share (diluted).

VSS Monitoring Scales its Packet Broker for Network-wide Visibility

VSS Monitoring introduced a new suite of network packet brokers (NPBs) that leverage a unique fabric-system approach for interconnecting network monitoring and security systems.

The new VSS Monitoring product family, called vBroker, delivers network-wide link-layer visibility and access to a broad set of network monitoring and security systems. This significantly reduces the capital costs of ensuring link visibility and analysis tool access across the network.

The new "vMesh" architecture can seamlessly interconnect up to 256 VSS Monitoring NPBs and more than 10,000 ports, delivering the greatest scalability and link-layer visibility in the industry, whether across multiple data center racks, physical locations or entire geographies. vMesh leverages VSS Monitoring’s proprietary vStack protocol to provide end-to-end visibility and data access – at the link-layer – across the entire network.

The new hardware includes the vBroker 200 and vBroker 300 appliances, which support traffic filtering/grooming and offloading of packet processing to increase tool system capacity and efficiency. The vBroker 300 Series provides the industry’s highest capacity in a 1RU format – 560 Gbps – and up to 56 ports per appliance, while the vBroker 200 Series provides the flexibility of a modular chassis in compact 1RU or 2RU form factors.

VSS Monitoring is also introducing a new management console, called vMC, that lets customers manage all or multiple VSS Monitoring NPBs using a single “pane-of-glass" to deploy, provision, and make drag-and-drop configuration changes for the full topology and perform bulk software updates. Customers can also create advanced charts and graphs at a group or network-wide level.

"Service providers and enterprises alike are challenged with ensuring continuous application performance, threat mitigation, and service availability, and are turning to us to support the latest set of network tool systems, including new security services that protect data, mitigate loss of control due to cloud and mobility initiatives, and ensure compliance. With our unique systems approach, we enable customers to start small and scale to meet their growing needs."

CenturyLink To Accept FCC Connect America Funds

CenturyLink confirmed that it will accept $35 million from the FCC's Connect America Fund (CAF) to deploy broadband service to 45,000 homes in unserved rural areas. The company was eligible for nearly $90 million in CAF Phase I funding, but decided that restrictions on the use of the CAF 1 funds made further deployment uneconomic.

"CenturyLink is excited to be able to work with the FCC to bring broadband services to thousands of homes for the first time. In addition to the incremental CAF funding, we are investing millions of dollars of our own money to bring robust broadband services to more customers because we believe these services will bring essential educational and economic opportunities to high-cost, rural areas of the country," said Steve Davis, CenturyLink executive vice president for public policy and government relations.

Huawei's 2012 H1 Sales Zoom to CNY102.7 Billion, Up 5.1%

Huawei reported revenue for the first half of 2012 of CNY102.7 billion, an increase of 5.1% over the first half of 2011. Operating profit was CNY8.79 billion with the operating margin at 8.6%, an increase of 20.3% against 2011 H2 and a decrease of 22.0% from 2011 H1.

The company asserted that it continues to maintain robust growth momentum although the global economic situation and telecom equipment market remains a significant challenge.

"In 2012, Huawei outlined our new pipe strategy and we will focus even further on this approach moving forward to ensure more effective growth and greater efficiency to drive continued improvements in operating performance," said Ms. Meng Wanzhou, Chief Financial Officer of Huawei. "We are relatively optimistic about our operating performance and profitability for the remainder of 2012."

Huawei noted that it has now deployed 38 of the 80 commercial LTE networks launched worldwide . These networks now cover footprints of 200 million people.

Meraki Adds Layer 7 Visibility to Cloud-managed Switches

Meraki has enhanced its MS-series cloud managed access switches with Layer 7 visibility capability, which provides a view into application traffic at the network edge.

Meraki, who pioneered application visibility in wireless LANs, is ushering in a new generation of switches with rich, fine-grained layer 7 visibility into the applications, users, and devices. For example, a quick search in the Meraki dashboard reveals how iPad utilization compares to Android tablets, which port the CEO's phone is connected to, and how much bandwidth is being consumed by video.

Meraki's layer 7 application visibility comes to the entire line of MS series switches via a firmware update, and requires no additional appliances or management software. Moreover, Meraki's switches analyze traffic while maintaining full non-blocking gigabit performance (up to 176 Gbps per switch), and ultra-low latency for voice quality.

Parks Associates: AsiaPac to overtake North America in LTE Subscriptions

The Asia & Pacific region is poised to overtake North America this year in number of 4G/LTE subscribers, thanks to large gains in South Korea and Japan, according to a new report from Parks Associates. The reports finds that the region will claim over 53% of all 4G/LTE subscribers by the end the year, helping push the total number of subscribers over 560 million globally by 2016.

"Fifteen carriers in Asia & Pacific now have live LTE services, with affordable pricing models that prompt robust subscriber growth in this region," said Harry Wang, Director, Digital Health and Mobile Product Research, Parks Associates. "Mobile operators worldwide have committed to 4G/LTE as the network technology of the future, but financial conditions, handset costs, and spectrum license availability will all influence the pace and scope of regional deployments."

"Deciphering optimal mobile data pricing schemes is an important piece of operators' monetization efforts, and many are experimenting with their mobile data pricing plans," said Jennifer Kent, Research Analyst, Parks Associates. "Verizon Wireless recently introduced its ShareEverything plan, which allows users to share one data quota across multiple mobile broadband devices. Share data plans should encourage subscribers to add more mobile devices, while offering unlimited text messaging mitigates the threat of third-party messaging services like Whatsapp."

NTT DOCOMO Xi LTE Service Subscribers Top 4 Million

NTT DOCOMO has passed the 4 million subscriber mark for its X (pronounced 'crossy') LTE service.

In the past six weeks, the carrier has added over 1 million LTE subscribers, indicating that the service has entered a fast growth phase. The pace of new subscriptions nearly doubled after the introduction in summer 2012 of a Xi-compatible smartphone lineup that offered more variety to meet customer needs.

Last month, DOCOMO announced flat-rate billing plans for Xi compatible smartphones, tablets and other data communication devices from October 1. The new offerings are lower cost than existing plans and are expected to benefit light users who do not download large-sized data such as video content.

AT&T: Smartphone Penetration at 62%, Wireless Margins Up

Driven by its highest margin for wireless services yet, AT&T reported consolidated revenues of $31.6 billion, up 0.3 percent versus the year-earlier period. Second-quarter 2012 net income attributable to  AT&T  totaled $3.9 billion, or $0.66 per diluted share, up from $3.6 billion, or $0.60 per diluted share, in the year-earlier quarter.

"We executed well across the business and posted another strong quarter with growing revenues, expanding margins and double-digit earnings growth," said Randall Stephenson,  AT&T  chairman and chief executive officer. "Our mobile Internet leadership continues, with solid gains in smartphones and tablets, plus our wireless margins have never been better.�?


  • Total wireless revenues, which include equipment sales, were up 4.8 percent year over year to $16.4 billion.

  • Wireless service revenues increased 4.3 percent, to $14.8 billion, in the second quarter.

  • Wireless data revenues increased by $1.0 billion, or 18.8 percent, from the year-earlier quarter to $6.4 billion.

  • Wireless operating income margin was 30.3 percent versus 26.9 percent in the year-earlier quarter, and  AT&T 's wireless EBITDA service margin was 45.0 percent, compared with 41.1 percent in the second quarter of 2011. 

  • Postpaid subscriber ARPU increased 1.7 percent versus the year-earlier quarter to $64.93, which is the highest in the industry.

  • There was a net increase in total wireless subscribers of 1.3 million in the second quarter to reach 105.2 million in service. This includes postpaid net adds of 320,000. Prepaid net adds were 92,000, connected device net adds were 382,000 and reseller net adds were 472,000.

  • Postpaid, prepaid and total churn reached their lowest levels ever – 0.97 percent, compared to 1.15 percent in the year-ago second quarter and 1.10 percent in the first quarter of 2012. Total churn was 1.18 percent versus 1.43 percent in the second quarter of 2011 and 1.47 percent in the first quarter of 2012.

  • AT&T  sold 5.1 million smartphones in the second quarter.

  • Smartphones represented 77 percent of postpaid device sales. At the end of the quarter, 61.9 percent, or 43.1 million, of  AT&T 's postpaid subscribers had smartphones, up from 49.9 percent, or 34.1 million, a year earlier.

  • AT&T 's ARPU for smartphones is twice that of non-smartphone subscribers, and about 88 percent of smartphone subscribers are on FamilyTalk or business plans.

  • In the quarter, the company activated 3.7 million iPhones, with 22 percent new to  AT&T .

  • Approximately 27 million, or about two-thirds, of all smartphone subscribers are on tiered data plans, compared to 45 percent a year ago, and about three-quarters of these have chosen the higher-tiered plans.


  • Total second-quarter wireline revenues were $14.9 billion, down 0.8 percent versus the year-earlier quarter and down slightly sequentially. Second-quarter wireline operating expenses were $12.9 billion, down 1.3 percent versus the second quarter of 2011 and down 1.9 percent sequentially.

  • Total business revenues were $9.1 billion, down 1.5 percent versus the year-earlier quarter.

  • Revenues from strategic business services — including Ethernet, VPNs, hosting, IP conferencing and application services — grew 13.5 percent versus the year-earlier quarter, continuing strong trends in this area.

  • Revenues from residential customers totaled $5.5 billion, an increase of 1.7 percent versus the second quarter a year ago — their strongest growth in more than four years.

  • Consumer broadband, video and voice over IP revenues now represent 57 percent of wireline consumer revenues, up from 50 percent in the year-earlier quarter.

  • Total  AT&T  U-verse subscribers (TV and high speed Internet) reached 6.8 million in the second quarter.  AT&T  U-verse TV added 155,000 subscribers to reach 4.1 million in service.

  • AT&T  U-verse High Speed Internet delivered a second-quarter net gain of 553,000 subscribers to reach a total of 6.5 million, helping offset losses from DSL. Overall,  AT&T wireline broadband connections decreased 96,000, partly due to seasonality.

  • More than 50 percent of U-verse broadband subscribers have a plan delivering speeds up to 12 Mbps or higher, up from 39 percent in the year-ago quarter.

    UK Sets LTE Auction – 800MHz and 2.6 GHz band

    Ofcom, the telecoms regulator for the UK, announced its largest ever auction of spectrum for mobile services-- the equivalent of three quarters of the mobile spectrum in use today – some 80% more than released in the 3G auction which took place in 2000. The auction of spectrum for LTE is set to get underway before the end of the year.

    Key details of the auction have now been confirmed, including plans to reserve some of the available spectrum for a fourth national wholesaler other than the three largest mobile operators.

    The 4G auction will offer at least two spectrum bands – 800 MHz and 2.6 GHz. The lower frequency 800 MHz band is part of the 'digital dividend', which is ideal for widespread mobile coverage. The higher frequency 2.6 GHz band is ideal for delivering the capacity needed to deliver faster speeds. These two bands add up to 250 MHz of additional mobile spectrum, compared to 333 MHz in use today.

    The spectrum bands will be auctioned to bidders as a series of lots. One of the 800 MHz lots of spectrum will carry an obligation to provide a mobile broadband service for indoor reception to at least 98% of the UK population by the end of 2017 at the latest.

    Mobile operators are expected to start rolling out 4G networks using the auctioned spectrum from the middle of 2013, and to start offering 4G services to consumers later that year.

    Ed Richards, Ofcom Chief Executive, said: “The 4G auction has been designed to deliver the maximum possible benefit to consumers and citizens across the UK. As a direct result of the measures Ofcom is introducing, consumers will be able to surf the web, stream videos and download email attachments on their mobile device from almost every home in the UK.�?


    Mindspeed Posts Results, Notes 3 LTE Small Cell Design Wins

    Mindspeed reported quarterly net sales of $35.5 million and a loss per share of $0.12 on a non-GAAP basis, or a loss per share of $0.18 on a GAAP basis.

    Product revenue from communications convergence processing (CCP) solutions contributed 41 percent of fiscal third quarter 2012 product revenues and decreased 4 percent sequentially from the prior quarter. Product revenue from high-performance analog (HPA) products represented 48 percent of fiscal third quarter 2012 product revenue and increased 8 percent sequentially from the prior quarter. Wide area networking (WAN) product revenue accounted for the remaining 11%.

    In addition, Mindspeed noted three new LTE small cell basestation design engagements, including a new major European OEM.

    “While the end markets we serve remain challenging, we delivered on our revenue forecast and grew wireless revenue to $4 million in the quarter, up from $2 million in the prior quarter,” said Raouf Y. Halim, Mindspeed’s chief executive officer. “Growth in our HPA and optical access infrastructure markets was offset by the expected slowdown in our core wireline business due to global weakness in wireline carrier capital expenditures.”

    VMware to Acquire Nicira for $1 Billion for Network Virtualization

    VMware agreed to acquire Nicira, a start-up focused on software-defined networking (SDN) for approximately $1.05 billion in cash plus approximately $210 million of assumed unvested equity awards. The goal of SDN is to allow enterprises and service providers to create the most flexible network topologies that seamlessly span any cloud environment.

    Nicira, which is based in Palo Alto, California, has developed a software-based Network Virtualization Platform (NVP) that creates a distributed virtual network infrastructure in cloud data centers that is completely decoupled and independent from physical network hardware. The company says its technology "decouples and isolates virtual networks from the underlying network hardware, like server virtualization decouples and isolates virtual machines from the underlying server hardware."

    Nicira's NVP software is implemented at the network edge and managed by distributed clustered controller architecture. The system forms a thin software layer that treats the physical network as an IP backplane. This approach allows the creation of virtual networks that have the same properties and services as physical networks, such as security and QoS policies, L2 reachability, and higher-level service capabilities such as stateful firewalling. These virtual networks can be created dynamically to support VM mobility anywhere within or between data centers without service disruption or address changes.

    Nicira claims its platform is compatible with any data center network hardware and that it can be deployed non-disruptively on any existing network.

    Nicira has previously disclosed deployments with AT&T, eBay, Fidelity Investments, NTT and Rackspace.

    The acquisition expands VMware’s networking portfolio, which includes the VMware vSphere virtual switching, VMware vCloud Director networking, vShield Network and Security software defined services, and the VXLAN protocol. The line-up provides a solution for virtualizing the network – from virtual switching to virtualized layer 3-7 services.

    VMware confirmed that it plans to continue to support the open principles and technologies that have made Nicira solutions successful, including the Open vSwitch to connect physical networks and multiple hypervisors and the open extensibility framework to implement business-level policies from any cloud management system.

    "VMware has led the server virtualization revolution, and we have the opportunity to do the same in datacenter and cloud networking,” said Paul Maritz, chief executive officer, VMware. "The acquisition of Nicira adds to our portfolio of networking assets and positions VMware to be the industry leader in software-defined networking."

    Infonetics: Carriers Like 100GE, MPLS, SDN, But Not So Much 40G

    A new Infonetics survey of global carriers on their SDN, 40G/100G, and MPLS Control Plane Strategies finds a strong interest in software-defined networking (SDN) to simplify network provisioning.

    "The networking industry is riding up the hockey stick curve of hype based on the hopes of new software-defined network (SDN)/programmable network technologies,” notes Michael Howard, co-founder and principal analyst for carrier networks at Infonetics Research. "And while many uncertainties surround SDNs due to their newness, our survey confirms that the programmable network movement is real, with a good majority of service providers worldwide considering or planning purchases of SDN technologies to simplify network provisioning and to create services and virtual networks in ways not previously possible."

    Some highlights:

    • OpenFlow is the most developed programmable network initiative, and 80% of survey respondents are including it in their purchase considerations
    • 95% of service providers surveyed plan to deploy 100GE interfaces; most will not use 40GE
    • IP/MPLS (with control plane) is much more popular than MPLS-TP among surveyed service providers.

    Reliance Pulls IPO for its FLAG Subsidiary

    Reliance Communications withdrew plans for an initial public offering in shares of its FLAG Telecom subsidiary.  Reliance had planned a public listing in Singapore.

    • FLAG operates the 28,000-km Fiber-Optic Link Around the Globe/

    • In October 2003, Reliance Group acquired FLAG Telecom Group for $207 million.  A year earlier, FLAG had undergone a Chapter 11 bankruptcy proceeding to alleviate its debt.

    Infonetics: Global Market for IP/MPLS and Ethernet Services Surges Ahead

    Both IP MPLS VPNs and Ethernet services grew at a combined 13% in 2011 to just over $50 billion, fueled by surging data traffic, cloud services, and cost-cutting initiatives, according to a new report from Infonetics. The research firm is predicting the market to surpass $81 billion in 2016.

    "The move from legacy frame relay, ATM, and leased line services onto Ethernet and IP services is quickening as businesses put a razor-sharp focus on staying competitive in today’s highly interconnected, mobile, video- and cloud-oriented world,” notes Michael Howard, co-founder and principal analyst of Infonetics Research. "By 2015, ATM and frame relay will virtually vanish, while private leased lines will be around a bit longer."

    Some highlights:
    • The growth rate of IP MPLS VPN and Ethernet service revenue soundly outdistances the growth rate of telecom service provider revenue (though actual service provider revenue is increasing).
    • Asia Pacific is expected to overtake EMEA as the leading region for IP MPLS VPN services in 2012 and already leads in Ethernet services; Asia will remain the leader for the combined IP MPLS VPN and Ethernet services market going forward, led by China and India.
    • Over 90% of spending on mobile backhaul equipment in 2011 was on IP/Ethernet gear.

    AT&T Workers to Get 2-3% Annual Sales Increase Under New Contract

    AT&T outlined some of the provision in the tentative labor agreements with the Communications Workers of America in core wireline operations for the AT&T Midwest region and AT&T Corp.  Key points of the tentative agreements:

    • General wage increases in each year of the contract – 2.25 percent the first year, 2.75 percent the second year, and 3 percent the third year.
    • A 1 percent pension band increase in each year of the contract to the banded pension plan enjoyed by most current employees. New hires will continue to receive the Bargained Cash Balance 2 Pension Plan, with a one-time, 1 percent pay credit increase and a generous 80 percent match in the AT&T Retirement Savings 401(k) Plan.
    • Continues to provide a guaranteed job offer provision that promises qualified surplused employees a guaranteed job opportunity with AT&T .
    • Maintains one of the most robust health care plans in the nation, continuing to cover 100 percent of network preventive care, maintaining previously company funded health reimbursement accounts, with increases to employee costs. For example, employees with individual coverage will pay monthly contributions of $38 in the first year of the contract, $58 the second year and $79 the third year of the contract. Employees with family coverage will pay monthly contributions of $81, $121, and $163 over the three years of the agreement. New hires will pay higher contributions during their first two years of service, then will go into the same plan as current employees. Deductibles for network care will be $500 for individual coverage and $1,000 for family coverage in each year of the contract.

    EchoStar XVII Satellite on Target

    Hughes Network Systems confirmed that its newly launched EchoStar XVII satellite was successfully placed into its permanent geosynchronous orbital slot of 107.1 degrees West longitude last week. Testing is underway and Hughes expects to begin commercial operations this fall.

    "The launch and positioning of EchoStar XVII is a significant milestone for Hughes, as it will be the cornerstone for our HughesNet Gen4 satellite Internet service," said Paul Gaske, Hughes executive vice president and general manager, North America Division. "With well over 100 Gbps capacity, EchoStar XVII will build on the success of our SPACEWAY 3 satellite--the world's largest commercial satellite network, expanding high-speed satellite Internet access in North America to over 1.5 million new consumer and small business subscribers."

    The new generation Ka-band satellite was built by Space Systems/Loral and launched by Arianespace.

    Ciena Supplies Metro Net for Israel Credit Cards

    Cal (Israel Credit Cards Ltd) has selected Ciena and its partner Telrad to build a high-capacity, low-latency private optical network connecting its new data centre in Yehud to its main facilities in Giv’atayim. The metro network uses Ciena’s 4200 Advanced Services Platform to support two 10G Ethernet and four 4G Fibre Channel connections between the data centres. Cal has leased two dark fibre links between its sites to be used as active-active links, for which Ciena’s technology provides a very low latency solution.