Monday, August 20, 2018

FWD: Big trends from the Chinese telecoms market

China Telecom is the last of the Big 3 Chinese carriers to issue its mid-year report (see below), revealing stronger than expected financials and operational metrics. Later this week, Alibaba's mid-year report is due, hopefully providing equally deep insight into its cloud business and the larger market for data center infrastructure in China.

Some key trends observed on the telecoms side for 1H2018:

  • China Mobile is slowing, while China Unicom and China Telecom appear reinvigorated.
  • 4G network construction has been mostly completed and CAPEX levels are declining at all 3 carriers. 
  • Mobile data has entered its highest period of growth, reflecting the bulk of the subscriber base migrating onto 4G.  China Telecom reports +349% yoy growth!
  • Infrastructure sharing through the newly-public China Tower joint venture company is having a measurable effect in reducing OPEX. All three carriers talk about driving down tower costs even more, especially as each carrier has in excess of 1 million base stations in operation.
  • ARPU levels are very low compared to developed economies.
  • China Telecom gaining traction with a triple play option combining gigabit home broadband, TV service and 4G mobile service.
  • The government intervention to force/lure investment from the nation's most successful tech companies in the floundering state-owned China Unicom is successful in this early stage.
  • The end of provisional roaming tariffs is a welcome bonus for users but a direct hit on carrier revenues.
  • All three top carriers have 5G field trials underway in multiple cities, with pre-commercial user trials expected in 2019, followed by commercial launches in 2020.
  • None of the carriers reported significant network upgrade disruptions arising from ZTE's troubles in Q2.
  • None of the top three Chinese carriers has a viable overseas strategy, either through investments in other operators (Singtel's model) or direct subsidiaries (Orange or Telefonica's model). This is perhaps the missed opportunity of the past decade but understandable given the enormous challenge of modernizing their home market. On the other hand, the equipment supplied by Huawei and ZTE is now well entrenched in carrier networks all over the world, so the influence of China on the global telecoms market is considerable. 

China Telecom delivers strong results in 1H2018

China Telecom reported robust financial results and operational metrics for the first half of 2018, with overall operating revenues of RMB193.0 billion, of which, service revenues amounted to RMB177.6 billion, representing an increase of 7.0% over the same period last year. EBITDA amounted to RMB55.9 billion and EBITDA margin was 31.5%. Net profit amounted to RMB13.6 billion, representing an increase of 8.1% over the same period last year while basic earnings per share were RMB0.168, achieving persistent favorable growth.



Capital expenditure was RMB32.9 billion, representing a decrease of 19.9%. Free cash flow reached RMB18.4 billion which has increased remarkably over the same period last year.

Some operational metrics:

  • The total number of mobile subscribers reached 282 million, representing a net increase of 31.66 million which was more than double of the net addition in the same period of last year. 
  • Handset data traffic growth over the past year has been +379%
  • Average data usage now tops 4.6 GB per month
  • China Telecom captured a 46.5% market share in the net additions for China
  • Overall total market share increased to 18.9%
  • The total number of 4G users reached 217 million, representing a net increase of 35.27 million. 
  • 4G penetration is now at 77%
  • The total number of wireline broadband subscribers reached 141 million, representing a net increase of 7.09 million. 
  • 56% of wireline broadband subscribers are getting over 100 Mbps service
  • Average access bandwidth is 85Mbps
  • China Telecom now has 1.2 million base stations in operation with 98% population coverage and 36% utilization rate
  • 96% FTTH home pass coverage in cities and towns
  • Gigabit-class broadband has been deployed in >170 cities
  • China Telecom's IP metropolitan network and backbone network bandwidth reached 500Tbps and 170Tbps respectively
  • China Telecom is building a premium network of Internet data center clusters; deployment focused on Inner Mongolia, Guizhou, Beijing-Tianjin-Hebei, Yangtze River Delta, southern China, Chengdu-Chongqing-Shaanxi and other key regions
  • Video service penetration reached 70%; 9 mil Smart Home Networking service delivered, Family Cloud subs ~20 mil
  • China Telecom now serves 30 million IoT devices and is aiming for 60 million this year


Akraino Edge Stack advances as LF project

The Akraino Edge Stack project, which promises new levels of flexibility to scale edge cloud services quickly, has moved from formation into execution as a project hosted by The Linux Foundation.  The project originated inside AT&T.

New members of the Akraino project include Arm, AT&T, Dell EMC, Ericsson, Huawei, Intel, inwinSTACK, Juniper Networks, Nokia, Qualcomm, Radisys, Red Hat, and Wind River.

Akraino Edge Stack seed code will be opened up to the community this week based on AT&T’s seed code, (the Network Cloud blueprint,) contributed to The Linux Foundation.

“Since forming earlier this year, the Akraino Edge Stack project has generated strong industry support and is now well-positioned to create blueprints optimized for various edge use cases,” said Arpit Joshipura, general manager, Networking and Orchestration, The Linux Foundation. “We are pleased to welcome leading members with a broad swath of edge expertise and resources to collaborate on improving the state of open source edge software.”

“We welcome the new members to the Akraino Edge Stack project. As a community, we can expand the development of next gen zero-touch edge cloud infrastructure for carrier and enterprise networks, and foster a new ecosystem of applications that demand high performance, ultra-low latency and blazing speed,” said Mazin Gilbert, vice president of Advanced Technology & Systems, AT&T. “Embracing open interfaces and collaboration with edge computing will expedite new solutions and innovations for 5G services.”
 
“The Akraino project helps fill a critical gap in the ecosystem by supporting the rapid scale of edge solutions across Industrial, Enterprise and Telco. We look forward to establishing Akraino as a blueprint, helping to form the foundation of known-good software and hardware configurations that the ecosystem can easily adopt to foster collaborative development across industries and speed innovation,” said Imad Sousou, corporate vice president and general manager of the Open Source Technology Center, Intel. “We highly anticipate a continued collaboration to realize the bright future that is edge computing.”

“As application use cases at the edge continue to emerge, the need for a lightweight, low-latency, secure edge stack that’s also easy to deploy and manage is becoming more and more clear,” said Randy Bias, vice president of Technology and Strategy for Cloud Software , Juniper Networks. “The goal of Akraino is to deliver that stack in an open model allowing both network operators and the enterprises that rely on them to innovate and differentiate further up the stack. Juniper is actively engaged with the communities that are supporting edge infrastructure and Akraino is an important part of that mix.”

“Nokia is excited to join the Akraino Edge Stack project to support the emerging edge cloud ecosystem across multiple industries,” said Antti Romppanen, head of Cloud Foundation Product Management, Nokia. “Nokia has a long experience with carrier grade edge stacks, being the first company to demonstrate radio access network functions on OpenStack cloud infrastructure and recently launching Nokia’s Open Edge server specifically targeting edge deployments. We are looking forward to sharing our experience in the Akraino project!”

AT&T seeds Akraino project for carrier-scale edge computing

The Linux Foundation will host a new Akraino project to create an open source software stack supporting high-availability cloud services optimized for edge computing systems and applications.

To seed the project, AT&T is contributing code designed for carrier-scale edge computing applications running in virtual machines and containers.

“This project will bring the extensive work AT&T has already done to create low-latency, carrier-grade technology for the edge that address latency and reliability needs,” said Jim Zemlin, Executive Director of The Linux Foundation. “Akraino complements LF Networking projects like ONAP in automating services from edge to core. We’re pleased to welcome it to The Linux Foundation and invite the participation of others as we work together to form Akraino and establish its governance.”

“Akraino, coupled with ONAP and OpenStack, will help to accelerate progress towards development of next-generation, network-based edge services, fueling a new ecosystem of applications for 5G and IoT,” said Mazin Gilbert, Vice President of Advanced Technology at AT&T Labs.

Cumulus Linux runs on Broadcom Trident 3 switches

Cumulus Networks announced support for switching platforms powered by the new Broadcom Trident 3 (TD3) ASIC.

Key capabilities:

  • Simplified EVPN operations: built-in simplicity on different technological layers, thus reducing human errors and downtime.
  • Scale and robustness in data and control plane: The EVPN solution on Trident 3 supports VXLAN routing/tunneling in a single pass at 100/25 GbE line rate, supporting both symmetric as well as asymmetric routing
  • Switch platform: The Trident 3 family of programmable switches are 3.2Tbps and 2Tbps devices designed for data center, enterprise, and service provider networks transitioning to high-density 10/25/100G Ethernet. Trident 3’s programmability allows new enhancements to VXLAN-EVPN, such as VXLAN-GBP, to roll out via a field upgrade, avoiding forklift upgrades and providing investment protection
  • Investment protection: The Cumulus and Broadcom solutions maximize ROI through investment protection with interoperability, flexible positioning and re-use of resources, making it easier for customers to migrate spine devices downstream in the future to operate at the top of rack leaf switches, if and when needed.

“Cumulus Networks and Broadcom have been building network architectures for years, empowering the data center switching market and providing operators with greater control over their infrastructure resources,” said JR Rivers, CTO and Co-founder of Cumulus Networks. “This Cumulus Linux support for Broadcom supports our goal of bringing even more modern, scalable networks to more organizations around the world.”

Cumulus raises $43 million for its open networking

Cumulus Networks, which offers a Linux operating system environment for open networking, announced $43 million in new funding. Cumulus plans to expand its sales force and invest in growing its marketing programs, with a particular focus on reaching new customers in EMEA and Asia Pacific.

Cumulus's mission is "to free customers from expensive proprietary network stacks and bring the automation, agility and scalability of web-scale networks to companies of all sizes."

The company cited the following recent milestones:

  • During 2017, the company signed over 350 new customers and now serves more than 800 customers, including over a third of the Fortune 50.
  • Growth outside the U.S. was particularly strong. Cumulus tripled its business in the Asia Pacific region and more than doubled its business in EMEA during 2017.
  • Cumulus Networks debuted in the Visionaries quadrant of the 2017 Gartner Magic Quadrant for Data Center Networking.
  • In October 2017, Cumulus was inducted into the Innovation Hall of Fame by JP Morgan Chase.
  • During 2017, the company released new solutions including NetQ, a telemetry-based fabric validation system; Host Pack, software essentials for the host enabling web-scale networking for containers, microservices and more; and Cumulus in the Cloud, a personal virtual data center to build and test network designs and operations.

NTT DOCOMO tests 5G with Keysight’s emulation

Keysight Technologies supplied its 5G network emulation solutions to NTT DOCOMO for characterizing and validating new 5G New Radio (NR) mobile devices intended to operate on the leading mobile operator’s 5G network.

Keysight’s solutions can be used to validate the protocol signaling and Radio Frequency (RF) performance of 5G NR mobile devices in a laboratory environment. Keysight’s comprehensive mmWave over-the-air (OTA) test capabilities combine network emulation solutions with anechoic chamber, such as Keysight’s Compact Antenna Test Range (CATR), which is consistent with 3GPP’s decisions approving the chamber as an indirect far field test methodology.

"Keysight’s proven expertise in mmWave and 5G test capability in OTA environments enable us to accelerate our 5G commercialization plans and ensure that new 5G mobile devices will operate reliably on our network." said Toshiyuki Futakata, vice president and general manager of Communication Device Development Department, NTT DOCOMO. "Collaboration with Keysight includes refining highly-specialized technology necessary for testing 5G devices in an OTA environment.”

Keysight is also collaborating with NTT DOCOMO to develop specific test scenarios for their mobile ecosystem to ensure new 5G mobile devices will operate as expected on their network. This enables NTT DOCOMO’s ecosystem to reduce R&D efforts and accelerate market introductions of new 5G mobile devices.

CloudPassage debuts its security for public cloud infrastructure

CloudPassage, a start-up based in San Francisco, announced the general availability of its Halo Cloud Secure service for the continuous protection of public cloud infrastructure.

The company cites the following differentiators:

  • Broadest and deepest coverage for AWS with a comprehensive library of policy checks and coverage that monitors server and container workloads in addition to IaaS services and resources.
  • Full scope visibility of all IaaS assets delivered in a unified view to quickly answer important questions about asset inventory.
  • Unique environment and requirements are adapted to with powerful policy customization options.
  • Enable fast and effective remediation by providing actionable information in an automated fashion. Streamline remediation workflows by sending vulnerability and remediation information via Amazon SNS and other notification mechanisms.

The IaaS capabilities of Halo Cloud Secure have been in beta just a few months and already protect over one million AWS assets.

https://www.cloudpassage.com/freetrial

Ciena expands in Tokyo

Ciena opened a new, larger office in Tokyo, supporting recent growth in the company’s local business and preparing for future expansion of its workforce and customer base. Located in the center of Tokyo in the Marunouchi neighborhood, the new Ciena office is more than twice the area of Ciena’s original Japan office in Uchisaiwaicho, Tokyo.

“With skyrocketing user demand for cloud-based services, video and mobile broadband and the volume of devices and data exploding, our clients in Japan are under intense pressure to automate and scale their networks,” said Rick Seeto, Vice President and General Manager of Asia Pacific and Japan (APJ), Ciena. “Ciena’s new office in Tokyo strengthens our ability to help our clients build more intelligent and adaptive networks that can cater to the growing digital economy.”

Murata expands MEMS production in Finland

Murata Manufacturing Co. will invest five billion yen to expand its MEMS sensor manufacturing operations in Vantaa, Finland.

The MEMS sensors manufactured by Murata in Finland are used in applications such as car safety systems and pacemakers.

"The market for advanced driver-assistance systems, self-directed cars, healthcare, and other emerging technologies are expected to be significant growth drivers. MEMS sensors are critical solutions for these applications and deliver proven measurement accuracy and stability in a variety of conditions," said Yuichiro Hayata, Managing Director for Murata Electronics Oy.

Murata acquired the Finnish company VTI Technologies – today known as Murata Electronics Oy – in 2012. It is the only factory of Murata which manufactures MEMS sensors outside of Japan,.

See also