Friday, January 9, 2015

Infonetics: Shift to Generic Hardware and Virtualization Pressuring Video Equipment Prices

Global broadcast and streaming video equipment revenue decreased 4 percent to $810 million in the first half of 2014 (1H14), with nearly all product segments down, according to a new report from Infonetics Research.

“The cost of encoding and transcoding platforms continues to come down, pressuring video and broadcast equipment revenue as pay-TV providers move to generic hardware platforms and, ultimately, network functions virtualization (NFV) rather than dedicated platforms,” said Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research. “This is a long-term shift that will keep video revenue from growing more significantly, despite the fact that pay-TV providers must fundamentally alter their video processing environments to support linear, over-the-top (OTT) and multiscreen content that continues to grow exponentially.”

Some highlights:

  • Sales of video-on-demand (VOD) playout servers rose 20 percent in 1H14 from 2H13 as operators in China and the Middle East continue to drive spending 
  • Content delivery network (CDN) edge server revenue is forecast by Infonetics to grow at a 14 percent CAGR from 2013 to 2018, and multiscreen broadcast encoders are expected to grow moderately 
  • Despite the sluggishness in the first half of the year, Infonetics expects streaming video and broadcast equipment revenue for the full-year 2014 to be up slightly.

Corning Acquires TR Manufacturing for Interconnect Components

Corning completed its previously announced acquisition of TR Manufacturing, which supplies fiber-optic and copper cable/component interconnects and electro-mechanical assemblies to OEMs.

TR Manufacturing has its main activities in Fremont, California.

“We welcome our talented new colleagues to Corning,” said Clark S. Kinlin, executive vice president, Corning Optical Communications. “Together, we look forward to extending Corning’s position as a leading provider of connectivity solutions to every edge of the communications network.”

Thursday, January 8, 2015

Blueprint: VoLTE, WebRTC and IoT Igniting Mobile Operators in 2015

by Thorsten Trapp, Cofounder and CTO of tyntec 

Reflecting on 2014, the year was an inspired one for mobile innovation. With the growing popularity of OTT messaging services and IP-based communication technologies, new opportunities have emerged for all players in the ecosystem – MNOs, enterprises and OTT players – to streamline, expand and increase the quality of communication offerings.

Over the course of 2015, we’ll see a paradigm shift in how operators approach their role and respond to changing market conditions. Operators will have to bring the outside in to strategize and implement innovations in order to find new ways to reinsert traditional telecom services into the communications equation. By leveraging the power of VoLTE, tapping the growing use of WebRTC in businesses and exploring opportunities with OTT and IoT – operators will attempt to regain a foothold in the market.  Advancements on those fronts will compel enterprises to streamline, expand and improve the mobility they provide for their employees and customers. As they increasingly move to the Cloud, enterprises will see the residual benefits from new mobile innovations.

Uptick in MNO Consolidation 

For the telecom industry, 2014 can best be categorized as a tumultuous year for MNOs. Over the last 12-months, we saw several record-setting funding and valuations of OTT messaging service providers including, Kik ($38M funding), Tango ($1.5B valuation), not to mention Facebook’s $19B acquisition of WhatsApp. All of which, fueled OTT’s growth and diminished operator revenues.

In 2015, MNOs will feel heightened pressure as market forces continue to escalate. Traffic and revenue from traditional telco services will decline at a rapid rate as a result of increased OTT adoption and declining ARPU, leading to the acquisition of smaller operators. Those MNOs who are able to weather the storm will be forced to shift their strategies from multi-local to central. Additionally, more telcos will seek out partnerships in an effort to monetize OTT services.

VoLTE Will Help Operators Level The Playing Field
Amidst MNO market consolidation, operators looking to shift strategies will look to VoLTE to help level the playing field and remain competitive with OTT providers and mobile VoIP services. As subscribers consume more data, MNOs will be looking to offload voice traffic onto data networks, which have historically been kept separate as a result of legacy infrastructure. More and more, we’re seeing MNOs move from classical telephony to pure SIP (VoIP) – a significant shift in business model and a winning strategy for MNOs seeking an all-IP approach.

In 2015, the industry can expect even broader adoption of VoLTE as MNOs continue offloading voice traffic to newly built-out LTE networks. Along the way, we anticipate seeing a few headline-worthy outages as carriers struggle to cope with increasing system requirements caused by ever-growing bandwidth demands.

WebRTC Will Elevate Value Of Legacy Communication Services In The Enterprise  

With more enterprises moving to the Cloud, WebRTC and APIs for telecommunication services are seeing wider business adoption due to their ability to achieve interoperability and provide a more seamless communication experience. For those businesses that rely on legacy communication services in the office, integrating traditional services such as, phone numbers and SMS, with WebRTC and telecom APIs is creating a compelling business communication solution. In this approach, phone numbers are becoming unique identifiers in the enterprise, helping to connect employees across the multiple communication channels they use on a daily basis.

In the New Year, WebRTC, coupled with easy-to-use APIs for telecommunication services, will make enterprises embrace the idea of using phone numbers as unique identifiers to provide seamless communications in and out of the office.

MNO Opportunity with the IoT Will Fall Short 

The ubiquity of mobile communications is fueling new growth opportunities into this not-so-new concept of linking devices to facilitate machine-to-machine communication (M2M). But while the IoT has sparked growth strategies for MNOs, the current business model of MNOs is not compatible with IoT. The high infrastructure cost and low ARPU creates a significant barrier for MNOs to think and act in the speed that’s required to exploit the opportunities. Regardless, some operators are still driven to make a business case for it. Only the ones who can take advantage of external, specialized platforms optimized for the IoT economy of scale will be able to turn IoT into a revenue-generating machine.

In 2015, we’ll see some MNOs try to capitalize on IoT but the resulting initiatives will not help their bottom line. Regardless, some operators will still be driven by the established KPIs and approach it as a way to add as many SIM cards as possible without a solid business case for it.

Despite evolving market conditions, traditional telecommunications services such as mobile numbers will continue to play a foundational role in mobile innovation. That said, MNOs face transformation in the year ahead. With help from IP-based communication technologies, VoLTE and emerging partnership opportunities, operators will learn to adapt in 2015.

About the Author

Thorsten Trapp is the co-founder and CTO of tyntec. He is a highly regarded mobile industry expert with over 20 years’ experience in the space.

Based in the company’s technical headquarters in Dortmund – where he studied computer science and biology at the Technical University – Thorsten developed the company's Mobile Messaging platform architecture which powers tyntec’s core business and is chiefly responsible for the company’s technical innovations and intellectual property. In this capacity he authored all nine of tyntec’s patent families and has been named in 33 patent applications in total. Amongst others, he is the inventor of tyntec’s dynamic SS7 platform, its Mobile Number Portability System and disruptive tt.One product.

  About tyntec

tyntec is a global mobile messaging operator and cloud communications provider founded on the Isle of Man. Its main offices are in Munich and Dortmund, Germany. It operates offices in London, Singapore, San Francisco and on the Isle of Man.

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Facebook Acquires Quickfire Networks for Video

Facebook has acquired QuickFire Networks, a start-up based in San Diego that specializes in video encoding technologies. Financial terms were not disclosed.

QuickFire developed a 1-RU, Intel-based appliance for processing and transcoding video.

Facebook noted that it now has over one billion video views on average every day.

Mirantis Launches Plugabble OpenStack Installer

Mirantis announced a new OpenStack distribution based on the Juno release and featuring the ability for partners to write plugins that install and run their products automatically.

Mirantis OpenStack 6.0 supports the Fuel deployment manager, which is an open source framework for creating deployment plugins, offering users a wide range of capabilities that they can repeatedly and reliably add to their Fuel-managed OpenStack clouds.

“As the pure-play OpenStack vendor, Mirantis is committed to keeping hardware and software choices completely open and to removing technical barriers to adoption,” said Boris Renski, Mirantis CMO. “Our investment in pluggable architecture makes it much easier for customers to take advantage of their preferred networking and storage solutions in building, deploying and managing their OpenStack clouds.”

Fuel plugins that are shipping with Mirantis OpenStack 6.0 include Load-Balancing-as-a Service with HAProxy, Virtual-Private-Network-as-a-Service, and NetApp and Red Hat’s GlusterFS as backend storage for Cinder. Customers and partners can also build additional network, storage, operations and authentication plugins.

GSA: LTE-Advanced and VoLTE Investments Underway

A total of 360 operators have commercially launched LTE networks and service in 124 countries, according to GSA (Global mobile Suppliers Association).

Alan Hadden, President of GSA, said: “LTE-Advanced carrier aggregation deployment was the major trend in 2014. 49 operators have commercially launched LTE-Advanced in 31 countries. Taking account of additional deployments in progress, trials and studies, GSA calculates almost 30% of LTE operators are currently investing in LTE-Advanced technology.”

Some highlights of the report:

  • 312 operators deployed FDD mode only
  • 31 operators deployed TDD mode only
  • 17 operators deployed both FDD and TDD modes
  • 80 operators in 42 countries i.e. over 22% of operators are investing in VoLTE deployments, studies or trials, with 14 operators having launched HD voice service using VoLTE in 7 countries. Many more launches are expected in 2015
  • 107 operators in total, i.e. almost 30% of LTE operators have launched, are deploying or are trialling LTE-Advanced technologies. 49 operators have commercially launched LTE-Advanced carrier aggregation in 31 countries, and this figure could double in 2015
  • 8 operators have commercially launched LTE using APT700 (700 MHz) band 28 spectrum. APT700 is a key coverage band for LTE with near-global market potential. 42 countries have allocated, committed to or recommend APT700 band 28 spectrum for LTE deployments, in markets covering 3.2 billion people. 55 APT700 (band 28) user devices comprising smartphones, tablets, CPEs and MiFi hotspots have been announced

AT&T to Run LTE Broadcast at College Football Championship

AT&T will host a live, on-site demonstration of LTE Broadcast for invited guests at the first football national championship game at AT&T Stadium in Arlington, Texas on January 12.

LTE Broadcast enables delivery of content directly to all users with compatible devices within a designated timeframe and area.

AT&T said LTE Broadcast could be used to distribute a wide range of content including music, video, and software to specific areas within its LTE footprint, such as a single sports stadium.

Sonus Acquires SDN Assets from Treq Labs

Sonus Networks has acquired the SDN technology assets of Treq Labs, a start-up based in Sunnyvale, California, for approximately $10.1 million in cash.

Treq’s Spoq platform  was developed to virtualize the WAN, enabling on-demand service creation based on business applications and policy.

The acquisition deal includes an Earn-Out Agreement whereby the Sonus has agreed to issue up to an aggregate of approximately 6.6 million shares of common stock over a three-year period of 2015 through 2017 if aggregate revenue thresholds of at least $60 million are achieved by the SDN business during that period, and up to an aggregate of an additional approximately 11 million shares (17.6 million shares in total) if aggregate revenue thresholds of at least $150 million are achieved by the SDN business during that period.

Wednesday, January 7, 2015

Ericsson Announces License Assisted Access (LAA) Small Cells

Ericsson will support License Assisted Access (LAA) capability in its small cells starting in fourth quarter 2015.  This will enable carrier aggregation of licensed with unlicensed bands to effectively address growth in indoor data traffic. T-Mobile US has agreed to trial the technology.  LAA capability will be supported in the Ericsson Radio Dot System for medium and large buildings and the Ericsson RBS 6402 Indoor Picocell for smaller buildings under 50,000 square feet.

LAA is an LTE-Advanced technology that can improve mobile data speeds and reduce congestion. Ericsson calculates that using only 4 percent of the 5 GHz band, LAA can provide up to a 150 Mbps speed increase to smartphone users. Each additional 4 percent of available spectrum used will increase the smartphone data speed further. Ericsson LAA also incorporates fair sharing within the 5 GHz band, to accommodate traditional Wi-Fi users. Fair sharing works on the principle that Wi-Fi and LAA users would have equal access to the spectrum.

"One of the great things about LAA is its 'rising tide' effect, increasing system capacity and making way for better service to all users in the area, whether they have an LAA-enabled device, or are using Wi-Fi or cellular access," stated Thomas Norén, Vice President, Head of Radio Product Management, Ericsson.

"With our LTE footprint now covering 264 million Americans, we look to innovations like License Assisted Access to help us drive an even better, more differentiated wireless experience. There's approximately 550 MHz of underutilized spectrum in the 5 GHz Unlicensed National Information Infrastructure (UNII) band and LAA is one of the technologies we plan to develop and use in our continuing efforts to provide our customers with superior network performance. We are excited to be working with major infrastructure partners, like Ericsson, to bring this technology to our customers in the near-future," said Neville Ray, Chief Technical Officer, T-Mobile US.

T-Mobile Looks at Unlicensed Spectrum for Potential Boost

T-Mobile is looking at integrating licensed and unlicensed spectrum on its LTE network.

In a blog posting, Neville Ray, T-Mobile's CTO, notes there is approximately 550 MHz of underutilized spectrum in the 5 GHz Unlicensed National Information Infrastructure (UNII) band, which is available for any use within the FCC’s rules for the UNII band. T-Mobile is considering Licensed Assisted Access (LAA) for its ability to deliver higher peak and average data speeds to smartphones and mobile broadband devices with reduced packet latencies.

Sprint Secures Vendor Financing from Nokia, Samsung, ALU

Sprint signed three new vendor financing facilities totaling $1.8 billion to purchase 2.5 GHz network equipment and related services from key suppliers. The company also amended some existing equipment credit facilities.


  • A new secured facility for up to $800 million has been signed with Nokia Networks, maturing in June 2021. It is backed by credit insurance provided by Finnvera plc, the export credit agency of Finland.
  • A new secured facility for up to $750 million has been signed with Samsung, maturing in Dec. 2022. It is backed by credit insurance provided by the Korea Trade Insurance Corporation (Ksure), the export credit agency of Korea.
  • A new secured facility for up to $250 million has been signed with ALU, maturing in Dec. 2021. It is backed by credit insurance provided by Delcredere | Ducroire (D/D), the export credit agency of Belgium.
  • With ALU's assistance, Sprint amended and expanded by $300 million its credit relationship with Export Development Canada (EDC) as well as amended the terms of its existing secured equipment credit facility. The total outstanding borrowings from EDC now amount to $800 million.
  • Sprint has  amended the terms of the secured equipment credit facility that it used to finance $1 billion in purchases of network equipment and related services from Ericsson. 

In addition, the FCC recently approved Sprint’s request to reduce the Letter of Credit (LOC) for 800 MHz incumbent reconfiguration costs by an additional $22.6 million. This lowered the LOC to approximately $434 million and follows the FCC’s approval of a reduction from $850 million to $457 million earlier in 2014.

T-Mobile US Added 8.3 million Customers in '14

T-Mobile US continued to acquire market share from its competitors in 2014, adding 8.3 million total net customers for the year. In the fourth quarter, T-Mobile added 2.1 million net customers.  This was the seventh quarter in a row that the Company has generated more than 1 million net customer additions.

“While my competitors are hiding behind less valuable connected device subscriber additions and managing profit expectations to the downside, T-Mobile delivered over 2.1 million customers in Q4, while managing the balance between growth and profitability.  Needless to say, 2014 was a record breaking year,” stated John Legere, President and CEO of T-Mobile.

AT&T Adds Rollover Data to Mobile Share Plans

AT&T is adding a Rollover Data feature to its new and current Mobile Share Value customers.

This rolls over unused, shareable plan data in a given month roll be used within the next month.

"Rollover Data is an added benefit of being an AT&T Mobile Share Value customer and it's just another way that we're saying thanks to our more than 50 million plus Mobile Share Value subscribers," said Glenn Lurie, President and CEO, AT&T Mobility. "We're providing even more value and flexibility, and the best part is it's simple, shareable and easy to track for our customers. All Mobile Share Value customers get this automatically."

Sckipio Demos OpenFlow over Distribution Point Unit

Sckipio Technologies, a start-up based in Israel, demonstrated OpenFlow control over a commercial DPU hardware.

The demonstration includes a 16-port fully vectored Sckipio DP3000-EVM Distribution Point Unit device transmitting over a 50 meter twisted pair binder to 16 separate Sckipio CP1000-EVM units.

Sckipio said its demonstration shows ultra high-speed broadband access over telephone wires being controlled using an open framework instead of utilizing proprietary approaches.

“Telcos expect to run as open, Software Defined Networks,” said David Baum, CEO of Sckipio. “OpenFlow is the critical technology to make their vision possible and Sckipio is the first company to show it working on a networking node.”

IBM SoftLayer Data Center Opens in Frankfurt

IBM officially opened its first cloud data center with SoftLayer in Germany.  The new facility in Frankfurt provides customers with a local cloud center to help them meet Germany and Europe’s strict security and data privacy regulations, improving application performance by lowering latency for local customers.

The Frankfurt facility is part of SoftLayer’s unique global network, differentiated by its network-within-a-network architecture, and offers 10Gbps connections to SoftLayer services, with only 7 milliseconds of latency from SoftLayer’s Amsterdam facility and less than 330 milliseconds of latency from other SoftLayer cloud data centers around the world.

It also complements existing European IBM Cloud facilities in Amsterdam, London, and Paris and broadens redundancy options and geographic diversity within EMEA and around the world by enabling backups that can be replicated and integrated in any other SoftLayer cloud data center, with free unmetered bandwidth between locations.

Infonetics: Fibre Channel SAN Shows New Life

Worldwide converged data center network adapter revenue was up 13% sequentially in 3Q14, with converged network adapters (CNAs) in the lead, followed by internet small computer system interface (iSCSI) adapters, according to a new report from Infonetics Research. The report tracks storage area network (SAN) Fibre Channel switches and host bus adapters (HBAs), converged data center network adapters, and switch ports-in-use for storage.

Some highlights:

  • In 3Q14, the global storage area network (SAN) equipment market, including Fibre Channel switches and host bus adapters (HBAs), grew 10% from 2Q14 to $654 million, and was up 15% from 3Q13
  • Another transformation in the converged data center network adapter market is on the horizon: the introduction of 25GE, expected in 2015 targeting large cloud service providers (CSPs)
  • Brocade dominates the SAN switch and adapter market, while Intel leads the converged data center network adapter space.
“The long-term downward streak for Fibre Channel SAN equipment was broken in the third quarter of 2014 (3Q14), driven by high performance requirements for flash storage and Cisco’s customers finishing their SAN product evaluation cycles and beginning to scale deployments,” notes Cliff Grossner, Ph. D., directing analyst for data center, cloud, and SDN at Infonetics Research.

“The question remains, however, whether the growth expected from solid-state drive storage and Gen 6 Fibre Channel that’s expected in the coming year will be enough to return the market to increased growth,” continues Grossner. “We believe the answer is yes for the short term, but do not see any evidence that double-digit growth will return to Fibre Channel market.”

CoreSite Opens Huge Data Center in Reston, VA

CoreSite Realty officially opened the second building on its Reston campus, a new 198,000 square foot facility, of which the 50,000 square-foot Phase 1 turn-key data center capacity was leased in Q4 2014 to a single anchor tenant.

Construction has now commenced on Phase 2 of the VA2 build-out, totaling an additional approximate 50,000 NRSF, with completion anticipated in Q2 2015.

CoreSite’s Reston campus provides access to nearly 60 network, cloud and IT service providers, including interconnection with AWS Direct Connect.

“We are pleased to open the first phase of VA2 fully leased to an anchor customer, consistent with our strategy for the facility,” said Tom Ray, CEO of CoreSite. “Further, we believe that the nearly 60 network, cloud and IT service providers already deployed at our Reston campus combine with our market-leading network ecosystem at DC1 and the scalability offered at VA2 to enable CoreSite to offer one of the most comprehensive solutions in the region for performance-sensitive customer requirements.”

Procera Updates Guidance, Sees Recovery

Procera Networks updated its financial guidance, saying it now expects revenue for the fourth quarter of 2014 to be in the range of $23.5 million to $24.5 million. The ratio of bookings to revenue for the fourth quarter was above one. The company expects the gross margin rate to be around 60%, to incur a net operating loss on a GAAP basis and to be profitable on a non-GAAP basis for the fourth quarter of 2014. For the fiscal year ended December 31, 2014, the company expects revenue to be in the range of $74 million to $75 million and expects to incur a net operating loss on both a GAAP and non-GAAP basis.

“The results of the quarter represent a recovery driven by the strength of our product portfolio and sales pipeline,” said James Brear, President and CEO of Procera Networks. “We are executing on our sales plan and new product initiatives and believe we are well positioned for 2015 as we continue to work toward the primary goal of driving value for our shareholders.”

Cyan Raises Q4 Revenue Range

Cyan released new financial guidance, saying it now expects fourth quarter 2014 revenue to be between $30 million and $31 million, exceeding the company’s prior guidance of $24 million to $26 million.

“Fourth quarter revenue outpaced our initial expectations due to strong demand for our Z-Series packet-optical hardware for both metro and regional 100G and packet applications,” said Mark Floyd, Cyan’s chairman and chief executive officer. “We continue to believe that in the first half of 2015 we will convert some of our SDN and NFV trials into wins. Between the growing traction for our Z-Series hardware and the accelerating commercial interest we are seeing for our SDN and NFV software, we are excited about our role as the supplier of choice for critical network transformation technology. We look forward to sharing more details when we announce our full fourth quarter and 2014 results.”

Molex Acquires SDP Telecom for RF Components

Molex has acquired SDP Telecom, a maker of RF/microwave solutions for the wireless communications industry. Financial terms were not disclosed.

SDP, which is based in Montreal, Canada, has manufacturing facilities in China. SDP will be managed by the RF/Microwave Business Unit that is part of Molex’s Global Integrated Products Division.

“Together, Molex and SDP will broaden our RF/Microwave product capabilities and create additional value for our customers in the growing wireless infrastructure market, said Tim Ruff, senior vice president, Molex. “This is a next step towards achieving our vision to offer total integrated solutions to the markets we serve.”