Monday, July 23, 2012

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."

http://www.vmware.com
http://www.nicira.com


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.
http://www.infonetics.com

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.
http://www.infonetics.com

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.
http://www.ciena.com


Sunday, July 22, 2012

Palo Alto Networks Rises 26.5% in IPO

On the first day of trading, shares in Palo Alto Networks (NYSE: PANW) rose 26.5% to close at $53.13.


This gives the company a market cap of $1.09 billion.

President and CEO Mark D. McLaughlin, joined by members of Palo Alto Networks’ leadership team, celebrated the company’s first day of trading by visiting the NYSE trading floor for the stock opening and ringing The Opening Bell.

President’s Council Recommends Opening 1,000 MHz for Shared Use

U.S. federal policy should shift in favor "Shared-Use Spectrum Superhighways" instead the current plan which is to first clear federal users from specific bands and then auction this spectrum for the exclusive use of the highest bidder, according to a new report issued by the President’s Council of Advisors on Science and Technology (PCAST). The report identifies 1,000 MHz of federal spectrum for sharing with the private sector.

The New Spectrum Superhighway plan (1) divides spectrum into substantial blocks with common characteristics (2) makes sharing by Federal users with commercial users the norm (3) measures spectrum effectiveness using a new metric (4) increases capacity by "1,000’s of times." 


A Presidential memorandum issued in June 2010 requires that 500 MHz of spectrum to be made available for commercial use within 10 years.  However, a recent NTIA Study found that clearing just one 95 MHz band will take 10 years, cost $18 billion, and cause significant disruption. Moreover, the net revenue for the Treasury from the last successful auction of 45 MHz realized a net income of just a few hundred million a year ($5.3 billion total).

The PCAST report said its vision of shared spectrum is viable using existing technologies and is not dependent on cognitive or "smart" radios. Instead, a geo-location database could be used the share spectrum much like how the FCC is using managing TV bands. The TV Whitespaces system could be used as a model. Technical standards would need to be implemented for coexistence of transmitters and receivers to enable flexible sharing.

To get things rolling, the PCAST report recommends that an incentive mechanism be created to encourage Federal agencies to begin sharing (e.g., Spectrum Currency). The existing Spectrum Relocation Fund, which is supposed to fund the migration of federal users out of certain bands, could be redeveloped into a "Spectrum Efficiency Fund." The system could be tested in a specific city before being extended nationwide.

Specifically, PCAST recommends beginning a pilot program involving spectrum sharing, supported by early release of funds from various sources, with three key elements: immediate sharing by new low-power devices in two existing Federal spectrum bands; formation of a Spectrum Sharing Partnership Steering Committee (SSP) of industry executives (e.g. CEOs) to advise on a policy framework to maximize commercial success; and creation of an urban Test City and a Mobile Test Service that can support rapid learning in spectrum management technology and practice.

The 192 page report is posted online.
http://www.whitehouse.gov/administration/eop/ostp/pcast

Reaction from AT&T: "While we are still reviewing the PCAST report, we are encouraged by the sustained interest in exploring ways to free up underutilized government spectrum for mobile Internet use. However, we are concerned with the report’s primary conclusion that 'the norm for spectrum use should be sharing, not exclusivity.' The report fails to recognize the benefits of exclusive use licenses, which are well known. Those licenses enabled the creation of the mobile Internet and all of the ensuing innovation, investment and job creation that followed.

“While we should be considering all options to meet the country’s spectrum goals, including the sharing of federal spectrum with government users, it is imperative that we clear and reallocate government spectrum where practical. We fully support the NTIA effort of determining which government bands can be cleared for commercial use, and we look forward to continuing to work with NTIA and other stakeholders to make more spectrum available for American consumers and businesses."

Reaction from CTIA: "Cleared spectrum and an exclusive-use approach has enabled the U.S. wireless industry to invest hundreds of billions of dollars, deploying world-leading mobile broadband networks and resulting in tremendous economic benefits for U.S. consumers and businesses. Not surprisingly, that is the very same approach that has been used by the countries that we compete with in the global marketplace, who have brought hundreds of megahertz of cleared spectrum to market in recent years."

Brazil Suspends New Mobile Line Sales Due to Poor Service

Brazil's National Telecommunications Agency (Anatel) has prohibited the nation's mobile operators with the worst customer service from selling new lines. The ban impacts the following carriers: TIM, Hi, and Clear in certain regions where their performance is the worst. The ban against TIM is the widest due to a spike in problems

Failure to comply with this order will result in a penaly of R$200,000 per day in each state in which the noncompliance is found.

In addition, the agency has ordered the operators to submit a National Action Plan with the next 30 days to explain who they will address the problem.

http://www.anatel.gov.br

CWA Negotiator Dies in Tragic Drowning


The Communications Workers of America is mourning the loss of Seth Rosen, vice president of Communications Workers of America District 4, who drowned in a tragic accident in North Carolina on Friday, July 20, 2012. He was 55.


Last week, Mr, Rosen was working to finalize a tentative agreement for CWA members at AT&T Midwest. He was elected CWA vice president in 2005, and was a leader in organizing, bargaining and many areas of the union.

http://www.facebook.com/seth.rosen.memorial

AT&T and Unions Reach Tentative Deals in Two Regions


The Communications Workers of America District 4 and CWA’s Telecommunications and Technologies Sector announced tentative deals with AT&T Midwest and AT&T Legacy. The tentative settlement provides for wage increases, improvements in employment security and improvements in work and job issues limits on forced overtime and changes to unfair attendance policies.


District 4 covers about 15,000 CWA members at AT&T operations in Ohio, Indiana, Illinois, Michigan and Wisconsin. AT&T Legacy covers about 5,500 workers at locations nationwide.



Separate negotiations are continuing with AT&T West, which has 18,000 CWA members throughout California and Nevada, and with AT&T East, which has 4,000 CWA members in Connecticut.  CWA said its 24,000 District 3 members throughout the Southeast are keeping up their mobilization efforts as the clock ticks down to the Aug. 4 contract expiration.

China Telecom Adds 17.7 Million Mobile Subscribers in 1st Half


China Telecom added 17.71 million mobile subscriptions in the first half of 2012, 0f which 14.6 million were 3G accounts, giving it a total of 144 million subscribers.


China Telecom remains on a steady pace of adding over one million broadband lines per month.


Local access lines continue to drop due to mobile substitution, broadband substitution, as well as competition.


In June, ZTE announced a contract for 40% of China Telecom’s 2012 broadband equipment procurement project -- the largest share of any vendor participating on the project. The contract covers procurement of PON OLTs, FTTB MDUs, and broadband terminals. It includes for over 21 million units valued at approximately RMB4 billion (approximately US$629 million).

ZTE said this is the largest broadband procurement project in the world in 2012.

VMware Hits Revenue of $1.12 Billion, up 22% YoY

VMware reported Q2 revenue of $1.12 billion, an increase of 22% from the second quarter of 2011, and 23% measured in constant currency. Net income for the second quarter was $192 million, or $0.44 per diluted share, compared to $220 million, or $0.51 per diluted share, for the second quarter of 2011. Non-GAAP net income for the quarter was $296 million, or $0.68 per diluted share, compared to $235 million, or $0.55 per diluted share, for the second quarter of 2011.

License revenues for the second quarter of 2012 were $517 million, an increase of 11% from 2011. Service revenues, which include software maintenance and professional services, were $606 million for 2012, an increase of 33% from 2011.

"The quarter’s strong performance reflects the continued confidence customers have in our solutions," said Paul Maritz, chief executive officer, VMware. "Our products, amplified by the recent acquisitions, including Nicira, are providing the means for our customers to transform IT as we move into the Cloud Era."http://www.vmware.com

Riverbed Enhances WAN Optimization with Inbound QoS

Riverbed introduced an inbound QoS capability to its Steelhead WAN optimization appliances.

The inbound QoS is increasingly needed to ensure the performance of public cloud services, such as SaaS, that may compete with recreational traffic such as Facebook and YouTube.

Riverbed said its Steelhead already offers advanced traffic classification and outbound QoS capabilities, so its appliance is the right place to ensure inbound QoS as well.

Riverbed developed advanced QoS capabilities that use a combination of proprietary classification methods, simplified configuration and unique scheduling techniques to efficiently allocate minimum and maximum bandwidths and prioritize latency-sensitive applications for both incoming and outgoing traffic.
http://www.riverbed.com


IEEE Forms 802.3 BASE-T Study Group


IEEE has established a new 802.3 Next-Generation BASE-T Study Group to measure industry interest and needs in the next generation of Ethernet transmission over twisted-pair cabling.

Current IEEE 802.3 BASE-T typically runs at Gigabit Ethernet and 10 Gigabit Ethernet speeds and is used in data centers.

"Because of the ability of current IEEE 802.3 BASE-T technologies to interoperate with legacy versions via the standard’s autonegotiation’ feature and thereby support cost-effective infrastructure upgrades, extension to 40 Gigabit Ethernet and higher speeds will be required in coming years,” said Bill Woodruff, chair of the IEEE 802.3 Next-Generation BASE-T Study Group and associate product line director with Broadcom. “IEEE 802.3 BASE-T continues to be one of the most successful technologies within the greater IEEE 802.3 family, and our new study group will gauge the timing and needs of extending the standard to support industry needs for server connectivity and other applications."

http://www.ieee.org

Thursday, July 19, 2012

Verizon Tops 11 Million LTE Subs, 12% of its Postpaid Base

Verizon reported strong Q2 performance, including the addition of over 2.5 million LTE subscriptions and significant increases in operating cash flow. Verizon Wireless generated record-high margins and strong operational results, and Verizon's Wireline segment generated continued increases in revenues from FiOS fiber-optic services and strategic business services. 


Verizon's total operating revenues were $28.6 billion on a consolidated basis, an increase of 3.7 percent compared with second-quarter 2011. Consolidated operating income was $5.7 billion in second-quarter 2012, compared with $4.9 billion in second-quarter 2011. Consolidated EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled $9.8 billion in second-quarter 2012, compared with $9.0 billion in second-quarter 2011.

"Verizon delivered another strong quarter of earnings growth and cash generation, and we remain on track to meet our financial objectives and produce solid double-digit earnings growth for the year," said Lowell McAdam, Verizon chairman and CEO.

In its conference call, Verizon said it is "very pleased" with the pace of LTE consumer adoption. Verizon now has nearly 11 million LTE subscribers, representing 12% of its 89 million retail postpaid connections. About 70% are smartphones and 30% are Internet devices. This means 19% of the company's smartphone base has an LTE handset. During the quarter, Verizon Wireless sold 2.9 million DROID smartphones, 2.5 million of which were #LTE, and 2.7 million Apple iPhones, up from 2.3 million a year ago. Of LTE sales, 20% were new to Verizon and 80% were upgrades. 

Some Wireless Highlights

  • Service revenues in the quarter totaled $15.8 billion, up 7.3 percent year over year. Retail service revenues grew 8.6 percent year over year, to $15.2 billion.
  • Data revenues were $6.9 billion, up $1.1 billion - or 18.5 percent - year over year, and represent 43.6 percent of all service revenues. Total revenues were $18.6 billion, up 7.4 percent year over year.
  • Retail postpaid ARPU grew 3.7 percent over second-quarter 2011, to a record $56.13, the highest growth in three years. Retail postpaid data ARPU increased to $24.53, up 15.4 percent year over year. Retail service ARPU grew 3.4 percent year over year, to a record $54.29.
  • Added 1.2 million retail net customers in the second quarter, including 888,000 retail postpaid net customers. 
  • At the end of Q2, the company had 94.2 million retail customers, a 4.9 percent increase year over year, including 88.8 million retail postpaid customers.
  • Smartphones constituted 50 percent of Verizon Wireless' retail postpaid customer phone base, up from 47 percent at the end of first-quarter 2012.
  • Retail postpaid churn was 0.84 percent, the lowest in four years, and an improvement of 5 basis points year over year. Total retail churn was 1.11 percent, an improvement of 11 basis points year over year.

Some Wireline Highlights

  • Wireline operating revenues were $9.9 billion, a decline of 3.1 percent compared with second-quarter 2011. Wireline operating income margin was 1.9 percent, compared with 1.6 percent in first-quarter 2012 and 3.1 percent in second-quarter 2011. Segment EBITDA margin (non-GAAP) was 23.1 percent in second-quarter 2012, compared with 22.6 percent in first-quarter 2012 and 23.8 percent in second-quarter 2011.
  • Consumer revenues grew 2.5 percent compared with second-quarter 2011, the highest increase in several years. Consumer ARPU for wireline services reached more than $100 for the first time, increasing to $100.26 in second-quarter 2012, up 8.5 percent compared with second-quarter 2011.
  • ARPU for FiOS customers increased to more than $149 in second-quarter 2012. FiOS services produced 65 percent of consumer wireline revenues in second-quarter 2012. Approximately 70 percent of FiOS consumer customers have purchased a "triple play" of phone, Internet and TV services.
  • Global enterprise revenues totaled $3.8 billion in the quarter, down 3.4 percent compared with second-quarter 2011. Sales of strategic services increased 4.4 percent compared with second-quarter 2011 and represented 52 percent of global enterprise revenues in second-quarter 2012. Strategic services include Terremark cloud services, security and IT solutions, and strategic networking.
  • Verizon added 134,000 net new FiOS Internet connections and 120,000 net new FiOS Video connections in second-quarter 2012. Verizon had a total of 5.1 million FiOS Internet and 4.5 million FiOS Video connections at the end of the quarter.
  • FiOS Internet penetration was 36.6 percent at the end of second-quarter 2012, compared with 33.9 percent at the end of second-quarter 2011. In the same periods, FiOS Video penetration was 32.6 percent, compared with 29.9 percent. The FiOS network now passes more than 17 million premises.
  • Broadband connections totaled 8.8 million at the end of second-quarter 2012, a 2.6 percent year-over-year increase.
  • Verizon launched several network projects during the second quarter, including deployment of next-generation routing equipment on the global Private IP network to meet growth demands, improve scalability and support 10 gigabit customer access ports and 40G and 100G backbone trunk ports; and a long-term core network architecture project for a common multi-protocol label switching (MPLS) backbone platform that will support current and future service demands.
  • The company also launched its first major initiative to build additional control plane technology into its network infrastructure. This will allow Verizon to deliver on the promise of cloud-based and mobility-enabled industry solutions, as well as enable rapid and automated recovery of complex optical mesh networks. 
http://www.verizon.com 19-Jul-12

See also