Wednesday, August 23, 2017

Telia narrows focus on Nordics and Baltics

The summer break is now well past its peak for many regions. For telecom operators, traffic must be carried whether the whole country is on holiday or not, and this is surely the case for Telia Company. The recent news from Stockholm was not good. A disappointing financial report for Q2 2017 issued on July 20th forced the company to announce a 3% cut in employment, or roughly 850 people, just before the summer holidays and precisely the time many new graduates are looking for opportunities. Telia is a major employer for Sweden and has a local payroll of about 21,000 employees.

For those unfamiliar with the company, Telia was once the state telephone monopoly of Sweden with roots back to 1853. After privatisation, Telia was merged with Sonera, the Finnish incumbent operator, in 2002 and the company was known for a while as Telia-Sonera, before eventually simplifying to just Telia. The government of Sweden still owns a 37% stake in Telia, while the government of Finland is believed to hold a 3% stake.

The disappointing news - flat to declining

Key numbers for Q2 include:

·         For Q2 2017, Telia's net sales in local currencies, excluding acquisitions and disposals, fell 0.4%. In reported currency, net sales fell 6.3% to SEK 19,801 million (21,130). Service revenues in local currencies, excluding acquisitions and disposals, fell 0.6%.

·         The number of subscriptions decreased from 26.7 million from the end of the second quarter of 2016 to 23.4 million. During the quarter, the total number of subscriptions increased by 0.2 million to 23.4 million.

·         Adjusted EBITDA declined 3.3% in local currencies, excluding acquisitions and disposals. In reported currency, adjusted EBITDA fell 4.6% to SEK 6,095 million (6,389). Adjusted EBITDA margin improved to 30.8% (30.2).

·         Capex increased to SEK 5,180 million (3,773) and the capex-to-service revenue ratio to 30.3% (20.9). Capex excluding license and spectrum fees increased to SEK 4,718 million (3,773) and capex-to-service revenue ratio, excluding license and spectrum fees, increased to 27.6% (20.9).

Several factors are putting stress on the business. First, Telia's FTTH business in Sweden is starting to 'reach the end of the fibre rollout potential'. The company says it is struggling with red tape in connecting new households to its fibre network. Specifically, 45,000 new fibre households were connected in the quarter of which 12,000 were single home, down from 22,000 a year earlier. The lower number of single home campaigns resulted in declining installation revenues of SEK 164 million compared to the corresponding quarter last year. At 1.6 million homes passed, Telia is the nation’s largest player. On a positive note in Sweden, Telia's mobile subscriptions grew by 77,000, of which 31,000 were for machine-to-machine services. Meanwhile, fixed broadband subscriptions fell by 1,000 in the quarter. The number of TV subscriptions increased by 10,000 in the quarter, largely driven by the acquisition of C-Sam.

Secondly, management has concluded that operational costs are simply too high. Sweden is an expensive country to do business and to employ large numbers of people. Thirdly, there is the long-term problem impacting nearly all former incumbents – legacy telephony services continue to decline at faster rate than new services are growing.

Telia's job cuts impact 650 positions in Sweden, equal to 8% of the company's Swedish employees. These cuts are expected to yield a 5% reduction in expenses for the second half of 2017. Further structural initiatives are being planned to achieve a reduction of the targeted cost base of at least 3% in 2018.

While Telia is experiencing problems in Sweden, its other Nordic markets are doing better. Revenues in Finland are growing and there is double-digit growth in Norway. Revenues in Lithuania grew 13.5% year over year, but there was a 1.5% revenue decline in Denmark. Revenue is Estonia was stable.

Finally exiting the Eurasian entanglement

Telia also now believes that by the end of 2017 it will have completely disposed of its Eurasian assets, including the disposal of its stake in Tcell in Tajikistan, and the sale of its shares in Turkcell Iletism Hizmetleri (Turkcell).

The controversies regarding the company’s alleged illegal activities in Eurasia, including bribery and money laundering in Uzbekistan, now date back over a decade and have yet to be fully resolved, despite the resignation of Lars Nyberg as CEO in 2013 along with the dismissal of involved employees. Telia still has pending legal cases with the U.S. Department of Justice, the U.S. Securities and Exchange Commission and with the Swedish and Dutch authorities. Most likely there will be a financial sanction to pay. In its Q1 2017 report, Telia said it was looking for a likely settlement to be in the range of US$1 billion.

The longer term strategy

Along with the divestiture or disposal of its businesses in Uzbekistan, Tajikistan and Turkey, Telia has also sold its 77% interest in the Spanish operator Yoigo to MASMOVIL, bringing in Euro 479 million. Telia also sold its 100% stake in Sergel Group, a debt collection company, to Marginalen for SEK 2.1 billion. Its new strategy is to transform itself into a next generation telco focused on the Nordic and Baltic regions. New areas of interest include IoT, IT services, media and content. This week, Telia announced the acquisition of Data Logistics Center, one of the biggest data logistics operators in Lithuania, from  Lietuvos Energija (Lithuania Energy) and Litgrid for an undisclosed sum. The deal includes a state-of-the-art Tier III data centre. Telia owns eight other data centres in the Baltics.

Level 3 enables multiple VLANs on single Ethernet to AWS Direct Connect

Level 3 Communications is introducing a new self-serve capability as part of its Cloud Connect Solutions that provides customers with more flexibility for optimizing their cloud-based workloads.

The new Level 3 Cloud Connect Solutions feature is a scalable Ethernet offering enabling customers to host multiple virtual local area networks (VLANs) on a single Ethernet Virtual Circuit (EVC) from their data centers to Amazon Web Services (AWS) with the AWS Direct Connect service.

Key Facts:

  • Level 3 is an AWS Direct Connect partner in the AWS Partner Network (APN). Level 3 Cloud Connect Solutions leverages AWS Direct Connect to provide private connection to AWS cloud.
  • Level 3 Cloud Connect Solutions give customers the ability to add and remove VLANs to AWS, including the connections to their virtual private clouds in near real-time via the MyLevel3 portal or API.
  • Customers can also share bandwidth across their Amazon virtual private cloud (Amazon VPC) instances.
  • As a private, direct connection to the cloud, Level 3 Cloud Connect Solutions provide an additional layer of security for customers' multi-cloud environments.
  • When combined with Level 3 Adaptive Network Control Solutions, customers gain increased visibility and control, including granular, real-time reporting and the ability scale bandwidth up and down as business demands shift.
  • Customers can access this scalable Ethernet offering across Level 3's Metro 2.0 Ethernet footprint of nearly 290 markets in North America, EMEA and APAC.

Cumulus targets web-scale networks for containers and microservices

Cumulus Networks is introducing a suite of technologies to help enterprises to deploy and operate production-ready web-scale networks for containers and microservices.

The company said its new "Cumulus Host Pack" enables a path to web-scale networking that supports containers and microservices by utilizing a common toolset of the Linux ecosystem. Because Cumulus Linux brings the host to the network, Host Pack gives application developers and network operators universal visibility and connectivity of the network. This visibility is needed because containers are constantly created and destroyed, and workloads are often moved to different physical machines or migrated to completely different data centers. The new Host Pack offering is the first of its kind to address the challenges network operators face in achieving end-to-end network visibility and connectivity of containerized applications.

Key capabilities and benefits of Host Pack include

  • Granular container visibility for faster debugging: Host Pack gives operational and development teams shared visibility of application availability through popular container orchestration tools such as Mesosphere, Kubernetes, and Docker Swarm. Enabled by NetQ running on the host, network operators can easily view the health of container services, keep track of container locations, track IP addresses and open ports, and have deep insights into where an issue resides, allowing for faster troubleshooting.
  • Simplified network connectivity for improved performance: With the use of routing protocols such as FRRouting and BGP unnumbered directly on the host and in a Layer 3 architecture, Cumulus' network fabric is able to dynamically learn about containers and distribute these addresses throughout the network to ensure predictable performance between containers across host environments. This removes the complications of a Layer 2 overhead, provides rich and reliable multipathing, simplifies IP address management, and increases reliability.   
  • A common data center operating model, Linux, from network to containers: Cumulus Linux utilizes the same Linux networking model that is foundational to container systems. This enables the use of a common operational toolset, guarantees interoperability, and reduces complexity across the entire data center.

The Cumulus Host Pack suite will also be made available for trial through Cumulus in the Cloud, a low effort, zero cost way to explore these technologies before committing to a full deployment.

“As companies look at containers as a way of deploying revenue generating applications in faster, more agile ways, the supporting networking infrastructure needs to adapt and change,” said Josh Leslie, CEO, Cumulus Networks. “Until now, we’ve been missing a solution that gives customers a scalable end-to-end network architecture and pervasive view of how containers impact the network. Cumulus Host Pack allows customers to deliver on the promise of containers and microservices by removing operational barriers and enabling them to design a network of web-scale efficiency that is reliable, and simple to deploy.”

ADTRAN Introduces Mosaic Software Tools

ADTRAN introduced its Mosaic Subscriber Solutions & Experience, described by the companyt as a new category of software products to help service providers transition their access infrastructure to a more open, programmable and scalable network.

Mosaic Activate, which has been shipping for several quarters, is the initial software product released under the Mosaic Subscriber Solutions & Experience umbrella. The software streamlines the pre-provisioning steps typically required before new customer service activation, allowing services to be configured from the edge of the network via a web interface. ADTRAN said service providers will realize a tenfold productivity increase leveraging the same number of network management resources to activate new services, accelerating new customer turn up by eliminating the swivel chair operations traditionally involved.

“The Mosaic Subscriber Solutions & Experience portfolio demonstrates our passion for staying hyper-focused on our customers to solve real world challenges,” said Jeremy Harris, director of Portfolio Management at ADTRAN. “We believe that software offers the possibility to orchestrate every task, data driven machines can securely manage the network, and end users deserve a blissful experience. This is the network that consumers want and that service providers desperately need, and we plan to make this a reality.”
Adtran Promo from Cutting Factory on Vimeo.

IEEE P7130 to define Quantum Computing nomenclature

A new IEEE P7130—Standard for Quantum Computing Definitions project aims to establish a general nomenclature for Quantum Computing to standardize communication with related hardware and software projects.

Specifically, IEEE P7130 will define terms related to the physics of quantum computing including quantum tunneling, super position, quantum entanglement, as well as other related terms and terminology that will be updated as technological advances are made.

"While Quantum Computing is poised for significant growth and advancement, the emergent industry is currently fragmented and lacks a common communications framework,” said Whurley (William Hurley), chair, IEEE Quantum Computing Working Group. “IEEE P7130 marks an important milestone in the development of Quantum Computing by building consensus on a nomenclature that will bring the benefits of standardization, reduce confusion, and foster a more broadly accepted understanding for all stakeholders involved in advancing technology and solutions in the space.”

"IBM is part of quantum information's history, since its foundation more than 30 years ago. And we've been championing important terms, metrics, and scientific methods ever since," said Jerry Chow, manager, Experimental Quantum Computing, IBM Research and IEEE P7130 working group participant. "This standards project will help anyone from students to seasoned quantum scientists nucleate around a common language, while keeping up with the field's rapid pace of change, and further accelerate pioneering experiments and explorations in quantum computing."

"1QBit works with a variety of classical, quantum and otherwise non-standard processors, which necessitates communication between multiple external teams, across a wide range of industries, discussing many different types of computing systems,” said Andrew Fursman, CEO 1Qbit and IEEE P7130 working group participant. “IEEE P7130 "Standard for Quantum Computing Definitions" provides a valuable service to 1QBit, our partners in quantum computing, and the many industries with which we intersect."

“Confusions exist on what quantum computing or a quantum computer means,” added Professor Hidetoshi Nishimori of the Tokyo Institute of Technology and IEEE P7130 working group participant. “This partly originates in the existence of a few different models of quantum computing. It is urgently necessary to define each key word.”

CALIENT acquired by Suzhou Chunxing Precision Mechanical Co.

Suzhou Chunxing Precision Mechanical Co., Ltd. has agreed to acquire a controlling stake in CALIENT Technologies, a supplier of optical switching solutions based on proprietary 3D microelectromechanical systems (MEMS) technology. Financial terms were not disclosed. CALIENT is based in Goleta, California (near Santa Barbara).

CALIENT’s S-Series Optical Circuit Switches are used in data center, compute cluster and communication service provider applications.

In a joint statement, Carvin Chen, EVP of Chunxing and Atiq Raza, CEO of CALIENT, said: “Chunxing and CALIENT share very similar management philosophies, cultures and values. This lays a very profound and solid foundation for our two companies to join together at a perfect time and with a perfect match to cope with the demands and challenges of keeping pace with a fast-growing new generation of optical switching technology. With our most cutting-edge optical switching technology, products and systems, and by exploring and leveraging both companies’ strengths and synergies, our common vision is to create a great world-leading company to explore, develop and deliver the most innovative optical switching value propositions and solutions to our most valuable customers and the market.”

The company will continue to operate from its Goleta, CA, headquarters under the CALIENT brand.

  • CALIENT’s enabling technology is a three-dimensional array of silicon micro mirrors that are used to switch up to 320 incoming fiber optic signals from any port to any output port.

NTT DOCOMO invests in Petametrics

NTT DOCOMO Ventures has made an equity investment in Petametrics, a San Francisco start-up that provides “LiftIgniter”, a personalization API to deliver a wholly unique experience to every individual user impression.

LiftIgniter was founded by Indraneel Mukherjee, a former Google researcher, and a team of machine learning and math PhDs., The personalization engine is powering various NTT DOCOMO e-commerce services.

NTT DOCOMO said personalization based on sparse data points and real-time action by users has demonstrated the ability to significantly improve sales and customer engagement. However, most personalization engines require data scientists to analyze huge amounts of log data combined with user preferences and historical information in order to deliver intelligent recommendations to the end-user. With LiftIgniter, the machine learning-based personalization algorithms run 24/7, learning and reacting to each impression in real-time to predict and serve up tailored content for every user touchpoint. The platform is agnostic across all content, languages and devices. It can be fully integrated and operational within a few hours, with minimal ongoing management.

China Mobile Hong Kong and Huawei build All-Cloud Core Showcase

China Mobile Hong Kong Company Limited (CMHK) and Huawei have jointly built an all-Cloud Core Network showcase to serve as an incubation center for new businesses.

At the showcase, more than 20 main traditional core network NEs have been moved on to the cloud, where the same NFVI is shared.

The companies said their deployment approach makes O&M more efficient and allows resources to be better utilized. The unified NFVI accelerates rollout of new services, guarantees fast innovation and service verification. So far, the site has provided more than three million subscribers with mobile data, VoLTE (Voice over LTE) and VoWiFi (Voice over WiFi). All KPIs show that network operation has been stable.