Sunday, April 23, 2017

The Open Network Automation Platform looks like a turning point for telecom architecture

The biggest news out of the recentOpen Networking Summit in Silicon Valley is that the Open Network Automation Platform (ONAP) Project, which unites AT&T's open source ECOMP and the Open Orchestrator Project (OPEN-O), has made substantive progress toward becoming a dominant lifecycle service management platform for the telecom industry.

Senior executives from AT&T, China Mobile and The Linux Foundation took the ONS stage to declare that ONAP is not only a path towards more open, agile and cost effect carrier networks, but it is perhaps The Path forward for the networks that support the majority of the world’s mobile users. Besides AT&T (with 135 million mobile users) and China Mobile (853 million), the ONAP project has attracted the endorsement, support or commitment to early trials from other key operators including Orange (265 million accesses), Bell, China Telecom, China Unicom and the hot, new Reliance Jio in India. Together, these operators serve 38% of the global wireless subscriber base. The Linux Foundation said they are already in discussions with mobile operators representing a further 34% of the global subscriber base, so clearly we are talking about enormous market clout.

The project description for ONAP states that ONAP is an open source software platform that delivers capabilities for the design, creation, orchestration, monitoring and life cycle management of: low-level virtual network functions (VNFs); the carrier-scale software defined networks (SDNs) that contain them; and higher-level services that combine the above.

From a functionality point of view, ONAP is expected to handle:

•   Automated onboarding.

•   Automated deployment.

•   Automated management.

•   Intelligent operation of network resources using big data and AI for policy optimisation.

The first vendors to announce ONAP support include companies that worked with AT&T on its ECOMP and Domain 2.0 initiatives, including Amdocs, Cisco, Ericsson and Metaswitch, along with key suppliers for the OPEN-O project, which include Huawei, H3C and ZTE). However, with this level of market momentum, expect all vendors to jump on board as quickly as possible. As the ONAP technical steering committees get establish, now would seem a good time to demonstrate enthusiasm and expertise in this new project.

A developer Wiki has already been set-up (and can be accessed here:, and the ONAP governing board members have elected the individuals to serve in key roles, while the governance structure was established via The Linux Foundation, with key appointments including:

•   Chair: Chris Rice, SVP of AT&T Labs.

•   President: Yachen Wang, deputy director of the Network Technology Department at China Mobile Research Institute.

•   Treasurer: Vincent Danno, director wireline standards, Innovation Technical and Marketing at Orange corporate.

How we got here

AT&T’s Enhanced Control, Orchestration, Management and Policy (ECOMP) platform has been running in its production network for the past two and half years. The company states that ECOMP contains over 8 million lines of code and that over one hundred virtual network functions are currently supported, including all of its VoLTE traffic. The ECOMP capabilities are also multi-layer, with optical wavelengths orchestrated by the system.

ECOMP was first publicly discussed in depth by AT&T at ONS 2016 (March 2016), when John Donovan, the company’s chief strategy office, described it as the 'next big thing'. Donovan said ECOMP was the most sophisticated software project that AT&T has ever undertaken. ECOMP's aim was to be the engine that powers its software-centric network, with the goal of enabling high utilisation of network resources by combining dynamic, policy-enforced functions for component and workload shaping, placement, execution and administration. At the time, AT&T published its ECOMP white paper, which has since attracted over 7,000 downloads.

In September 2016, Orange became the first telecom company to join AT&T's ECOMP effort. Orange agreed to test the platform for creating and managing its own software-defined network. The carriers also agreed to collaborate on open source and standardisation initiatives to accelerate the standardisation of SDN and NFV. As the first ECOMP partner, Orange perhaps played a critical role in persuading AT&T to move ahead with the idea of contributing its 8 million lines of code to open source. After all, there must have been many reasonable voices from within the company advising against a new and risky strategy of giving away its intellectual property, its crown jewels, for free. In December 2016, Bell Canada became the second carrier to join the ECOMP team.

The OPEN-Orchestrator Project (OPEN-O) was first announced at Mobile World Congress 2016. Its mission was to develop the first open source software framework and orchestrator to enable agile software-defined networking (SDN) and network function virtualisation (NFV) operations. The initiative was driven by China Mobile and Huawei, with early support from Brocade, China Telecom, DynaTrace, Ericsson, F5 Networks, GigaSpaces, Infoblox, Intel, KT, Red Hat, Raisecom, Riverbed and ZTE. In November 2016, OPEN-O launched its first major software release, codenamed SUN.

Many questions about what comes next

With the agreement only just coming into place and technical integration work yet to begin, it is too early to forecast how other models will be impacted. Is it game over for other service orchestration systems? Will other open networking projects, such as ONOS, Open Daylight and OPNFV be redirected to become perfect fits into ONAP? How will ETSI NFV evolve? And what of privately-developed orchestration systems, such as BluePlanet?

Presumably these will also need to adapt to the coming reality of a widely supported ONAP. On the other hand, will one open orchestration system be able to fit all use cases and service providers? And what about the public cloud providers?

The telcos are racing to make their infrastructure hardware more like cloud data centres, while companies such as AWS already have sophisticated software systems in place to bring up new equipment, services and customers quickly and efficiently. From the cloud operators perspective, will the 8 million lines of ONAP prove to be impressive? If so, and if the majority of telcos really agree to this common service orchestration model, will this give them an advantage over cloud operators?

Microsoft has already joined the ONAP project, the only cloud provider to announce its membership in the group so far. However, it is possible that a cloud provider like Google or Microsoft could have a better orchestration system, and perhaps they could find a business case to offer it on a wholesale basis.

Friday, April 21, 2017

NTT Com extends Multi-Cloud Connect to Oracle Cloud

NTT Communications (NTT Com) announced the extension of the Multi-Cloud Connect solution to Oracle Cloud to help multinational customers leverage the performance and cost benefits offered by the cloud while leveraging its secure, high performance MPLS network.

Under the agreement, Multi-Cloud Connect will connect directly to Oracle Cloud's platform via Oracle Network Cloud Services – FastConnect, enabling private connectivity to its portfolio and features based on platform as a service (PaaS) and infrastructure as a service (IaaS) offerings. The agreement encompasses middleware such as Oracle Database Cloud Service and Java Cloud Service, as well as integration and business analytics features.

Additionally, NTT Com and Oracle will enable hybrid deployment of Oracle Cloud and Oracle software hosted on-premises or Oracle Cloud at Customer based on a single, global network.

Multi-Cloud Connect currently connects to Oracle Cloud and other third party cloud services including Amazon Web Services (AWS), Microsoft Azure, Office 365, Dynamics CRM Online, as well as NTT Com's private cloud service, via a security-enhanced, private Layer 3 connection, avoiding the public Internet.
Multi-Cloud Connect is designed to enable enterprises to support the demands of different applications by delivering a hybrid cloud environment incorporating a mix of public cloud and private cloud or on-premises, private cloud (enterprise cloud) and/or public cloud elements.

NTT Com's Multi-Cloud Connect is directly connected to public clouds hosted in key markets across Europe, North America and Asia Pacific.

  • Earlier this year, NTT announced that as part of a commitment to expand its position in the cloud it would explore how to leverage the potential of its cloud investments worldwide. Specifically, Dimension Data and NTT Com planned to explore how to deliver a unified cloud experience to clients through greater collaboration within NTT, initially via closer integration of the Dimension Data and NTT Com cloud IaaS platforms.
  • In addition, NTT Com recently announced the launch of software-defined (SD) services and a suite of technologies with managed services named SDx+M (Software Defined Everything and Management). The new solution is part of NTT Com's strategy of providing software programmable networking, cloud and infrastructure environments.

Telecom, M2M and IoT are Showcased at Brooklyn 5G Summit

At the annual Brooklyn 5G Summit in New York University's Tandon School of Engineering, jointly organised by NYU Wireless and Nokia, attendees assessed how close the industry is to deploying commercial 5G products and services and showcased the latest developments and research in the areas of telecommunications, M2M communication and the Internet of Things (IoT).

The event featured executives from companies and organisations including Nokia, Verizon, National Instruments, Intel, Qualcomm and the Federal Communications Commission (FCC).

It was noted that recently carriers including Verizon and AT&T have announced trials around a dozen cities of both mid-band and the millimetrewave (mmWave) technology, for which Rappaport and NYU Wireless conducted seminal research. Meanwhile, government and bodies such as the FCC, 3GPP and ITU have recently defined new benchmarks intended to enable higher mobile data speeds.

NYU Wireless, which conducted early radio channel measurements showing that the mmWave spectrum can be used to improve wireless communications, noted that it is one of two academic institutions recently selected by the FCC to help test, debug and provide feedback on a new web-based portal that allows researchers to apply for a program experimental license that is intended to reduce the barriers to experimentation.

During the Brooklyn 5G Summit, NYU Wireless is demonstrating developments including:

1.         Research on 5G transmission in mmWave spectrum that indicates the potential for up to 40 times higher data transmission rates than at present.

2.         Advanced tools for designing 5G systems, including the widely used NYUSIM open-source channel software simulator.

3.         A new real-time network emulation tool for evaluating virtual reality and other applications over real-world mmWave channels.

4.         A phased-array antenna system for measuring mmWave directional channel dynamics.

5.         A dual architecture channel sounder providing 2 GHz RF bandwidth throughout the mmWave spectrum and a channel sounder on a chip.

During the event, NYU Wireless also announced that global smartphone supplier OPPO had joined the university research centre at the NYU Tandon School of Engineering as an industrial affiliate sponsor of research into 5G technology.

Construction Update on SACS Angola-Brazil Cable System

Angola Cables, an Angolan telecoms wholesale operator, has announced the completion of the marine survey for the South Atlantic Cable System (SACS) and the commencement of cable loading on the Angolan side of SACS cable, which will interconnect with the MONET cable system linking the U.S. and Brazil and the West Africa Cable System (WACS).

The SACS subsea system is a 40 Tbit/s, 6,165 km cable with four fibre pairs, with each fibre pair capable of transmitting 100 wavelengths with a bandwidth of 100 Gbit/s, which will connect from Angola to Brazil. SACS is scheduled to be ready for service in mid-2018.

Angola Cables stated that completion of the marine survey ensures that the cable will be deployed along the best route, avoiding hazards. Conclusion of the marine survey means that final manufacturing can be completed and route and cable type selections fine-tuned based on the survey findings.

As a result, loading of the pre-laid shore end (PLSE) is complete and the construction of SACS cable is underway. Angola Cables has commissioned NEC to build the cable system and contracted Ocean Specialists (OSI) to oversee the construction process. NEC announced in April last year that it had been selected to deploy the SACS system.

Angola Cables is an international wholesale provider focused on delivering capacity on international routes. Angola Cables is one of 12 members of the consortium managing the WACS cable system serving Angola and sub-Saharan Africa. The 14,530 km WACS cable extends from South Africa to the UK, with 14 landing points, including 12 along the west coast of Africa. The company also operates the Angonix IXP exchange at its data centre in Luanda, Angonap.

  • In early March, Ciena announced that Angola Cables had selected its GeoMesh and Blue Planet solutions to support the launch of a new service over a 10,556 km route on the MONET subsea cable, which is currently under construction and expected to be completed in the second half of this year.

Ericsson unveils virtualised video processing platform with MediaFirst controller

Ericsson has announced the launch of a platform that provides the foundation for all-IP and cloud native delivery models with the new MediaFirst Management Controller and MediaFirst Encoding Live 8.1.

Ericsson's fully virtualised processing solution, unveiled at NAB 2017, is designed to enable operators to address consumer demand for new services in areas such as UHD TV, virtual and augmented reality, as well as providing support for new revenue opportunities through dynamic ad insertion.

Able to operate on any platform, including pure software, common off the shelf (COTS) server hardware, private and public cloud, the flexible solution is designed to enable complex configurations by providing control for all processing elements utilising a service-based approach that secures operations and optimises service quality.

Leveraging its video compression expertise, and working in collaboration with customers and users, Ericsson MediaFirst Management Controller is designed to simplify the transition to a software-based architecture and provide a unified access point for Ericsson MediaFirst Video Processing products including Encoding Live, On Demand, Packaging and Stream Processing.

The new Ericsson solution allows operators to move from a monolithic approach towards a more agile, service-based allocation that helps streamline application management and deployment across multiple services and clusters. The new management platform offers centralised visibility, configuration and control, as well as providing flexible failover and licensing management for MediaFirst Video Processing applications. It can also adapt to changing conditions.

Ericsson's new MediaFirst Video Processing Encoding Live 8.1 enables faster content deployment with enhanced efficiency. The new version specifically offers a unified microservice architecture across any platform type and features centralised management, integral failover and dynamic licensing, together with faster video transcoding and high density when implemented on a platform based on Intel's Quick Sync Video (QSV) dedicated video hardware core.

KPN unit NL-ix establishes PoP at EdgeConneX Amsterdam

EdgeConneX, a specialist provider of data centre solutions at the edge of the network, has announced a new partnership with Netherlands-based NL-ix, a KPN company that interconnects over 100 carrier neutral data centres in 15 European countries, under which NL-ix has established a new point of presence (PoP) at its Edge Data Center (EDC) facility in Amsterdam.

With the deployment, NL-ix customers have access to local, regional and pan-European transport, routing and cloud connect services, and peering with local EdgeConneX customers, including wireless carriers, service providers, content delivery networks (CDNs), cloud providers and enterprises.

The EdgeConneX Amsterdam EDC is designed and located to provide the shortest and fastest routes for the delivery of Internet and cloud-based content in the Netherlands. The facility is strategically positioned close to major network provider aggregation points.

With 620 members connected and peak traffic of 1.7 Tbit/s, NL-ix is estimated to be the fifth largest Internet exchange globally. NL-ix interconnects in carrier neutral data centres in 25 metro areas and 105 data centres across Europe, offering metro, national and pan-European peering, routing, transport and cloud connect services.

  • Earlier in April EdgeConneX announced a partnership with the Salt Lake Internet eXchange (SLIX), offering connectivity solutions via the EDC in Salt Lake City. Owned and operated by XMission, SLIX is the only Internet exchange in Salt Lake City serving 10-plus networks connected with available peering for local EdgeConneX customers.
  • Earlier in the year, EdgeConneX launched its second EDC in Miami, Florida, located in Miami Gardens, 10 miles north of the NAP of Americas and offering direct access to LATAM, South America and the Caribbean via dark and lit fibre. In January 2017, Megaport (USA), the U.S. subsidiary of Australia-based Megaport, a provider of Elastic Interconnection services, deployed its SDN-based interconnection services in EDCs across North America and Europe.

Mellanox Cites Momentum for its 25G Ethernet Adapters

Mellanox Technologies announced that the ConnectX-4 Lx 25 Gigabit OCP and PCIe Ethernet adapters targeting data centre applications, which deliver 2.5x the throughput of 10 Gbit/s solutions using the same infrastructure, along with low latency performance, have been adopted by a number of major ODMs (original design manufacturers).

Mellanox stated that it is currently shipping hundreds of thousands of Ethernet adapters each quarter in line with increasing demand for its Ethernet connectivity solutions.

Mellanox cited ODM customers for its ConnectX-4 Lx 25 Gigabit Ethernet adapters including:

1.         Wiwynn, a cloud infrastructure provider offering computing and storage products, which is shipping its OCP server SV7221G2 products with the Mellanox ConnectX-4 Lx OCP Mezzanine NICs and PCIe cards to major ISPs.

2.         Inventec of Taiwan, which has qualified ConnectX-4 Lx 25 Gigabit Ethernet cards for TB800G4, Balder and K800G3 platforms for supply to major cloud and Web 2.0 providers in China,
3.         Acer, a Taiwanese hardware and electronics company, which has qualified the ConnectX-4 Lx PCIe adapters and plans to shortly launch its Altos R380 F3, R360 F3 and AW2000h F3 servers.

4.         Mitac-TYAN, a supplier of servers and desktop motherboards based in Taiwan, which is shipping ConnectX-3 Pro 40 Gigabit Ethernet OCP mezzanine cards and recently added the ConnectX-4 Lx 25 Gigabit Ethernet OCP mezzanine cards to its GT86A-B7083 server offering.

Mellanox's ConnectX-4 Lx is a 10/25/40/50 Gigabit Ethernet adapter that allows data centres to transition from 10 Gbit/s to 25 Gbit/s and from 40 Gbit/s to 50 Gbit/s while delivering similar power consumption and cost and utilising the same infrastructure.

Monthly update on the Indian telecommunications market - Part 2

Full article: Part 1Part 2 , Part 3Part 4

Update on consolidation of the 12-operator telecom market to four groups

Group 1 - Bharti Airtel plus Telenor

Bharti Airtel to acquire Augere Wireless, Telenor India and possibly some spectrum from Tikona

On February 17th Bharti Airtel, the current Indian telecom market leader, which as of December 2016 served 23.57% of Indian mobile subscriptions, closed the acquisition of Augere Wireless, a company which holds 20 MHz of spectrum in the 2,300 MHz band spectrum in the Madhya Pradesh circle.

Also, as previously reported by OND, on February 23rd Bharti Airtel and Norwegian multinational operator Telenor, whose Indian subsidiary at the end of 2016 served 4.83% of mobile subscriptions,
announced an agreement whereby Bharti Airtel would acquire most of the assets of Telenor India, including access to 44 million customers (nominally increasing its user base to over 320 million, though the final figure is likely to be less), 43.4 MHz of spectrum in the 1,800 MHz band and 20,000 base stations. The cashless deal, which is expected to close in April 2018, will include Airtel acquiring Telenor India's running operations in seven circles: Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam.

On March 24th persons familiar with the matter told the LiveMint news-source that Bharti Airtel was in the final stages of talks with Tikona Digital Networks of Mumbai to buy the latter's 4G spectrum in a transaction which could be worth in the range of INR 800-1,000 crore (excluding debt, which Airtel would assume, raising the total value to INR 1,500-1,700 crore). Tikona's 4G spectrum consists of 20 MHz in the 2,300 MHz band in Gujarat, Himachal Pradesh, Uttar Pradesh (East), Uttar Pradesh (West) and Rajasthan, which would be particularly useful for Airtel in UP (East), UP (West) and Rajasthan, where it has no airwaves in the 2,300 MHz band, and in Gujarat and Himachal Pradesh, where it has only 10 MHz each. The arrangement would not include Tikona' wireless broadband business, Tikona WiBro, which it would continue to run independently.

On March 28th Bharti Airtel said it had sold a 10.3% stake in its tower company, Bharti Infratel, to a
consortium of funds (including private equity firm KKR and Canada Pension Plan Investments Board (CPPIB)) to raise INR 6,193.9 crore. The company said it would us the proceeds of the sale to further pay down its corporate debt, which as of the end of September 2016 stood at INR 98,813.50 crore.
As a result of all these moves, Bharti Airtel will end up with an important increase in its share of subscriptions which, based on the December 2016 numbers, would be 28.40%, with a significant improvement in its 4G spectrum holdings and slightly stronger financial position.

Group2 - Vodafone plus Idea Cellular

$23bn merger of India's No. 2 and 3 operators to create world's second largest company by mobile subscriptions

As previously reported, Vodafone India, the country's second largest operator which as of the end of 2016 served 18.16% of Indian mobile subscriptions, and third-ranked Idea Cellular, with a 16.90% share, announced they were in merger talks. For some time Vodafone, which has had continuous problems locally for many years including poor profitability and major taxation disputes with the Indian government, had made it clear it was interested in modifying its position in India. Idea Cellular is currently owned 49.05% by the $41 billion sales level Indian conglomerate group Aditya Birla (chaired by Kumar Mangalam Birla) and 19.96% by the Axiata Group of Malaysia, and for its 2016 financial year reported revenue of INR 394 billion.

On March 21st it was announced that the boards of Idea Cellular and Vodafone India had approved a $23 billion merger (excluding the latter's 42% stake in Indus Towers), which if completed in FY 2018 would, based on the latest TRAI numbers, become India's largest telecom company with a pro forma mobile wireless subscriptions market share of around 35.06%, revenue share of the Indian communications market of around 41%, and about 395 million actual mobile subscriptions, making it the second largest company in the world after China Mobile.

The new company's pro forma revenue would be around INR 81,600 crore and it with operating profit of INR 24,400 crore and combined debt of INR 1.08 trillion. The mechanics of the merger, which is expected to take about 24 months to complete, will be evolutionary as outlined in the following from LiveMint:

- 'The deal will see Aditya Birla Group, the promoters of Idea, gradually raising its stake in the combined entity while Vodafone Group will reduce its own, with the aim of both holding equal stakes over a period of time'.

- 'As a first step, the Aditya Birla Group will acquire 4.9% from Vodafone for INR 3,874 crore, or INR 108 a share, to take its stake to 26% with Vodafone holding 45.1%, while AB Group will have the right to buy another 9.5% from Vodafone at INR 130 a share or the prevailing market price, in the combined entity over four years'.

- 'Kumar Mangalam Birla will be the chairman of the new entity, Vodafone will name the CFO, while the two companies will jointly name the CEO and operations head before the closure of merger, expected within 24 months. The new entity will remain listed and be renamed at a later stage, with the promoters of Idea and Vodafone having the right to nominate three members each on the board, which will have 12 directors, six of whom will be independent'.

Interim comment on the risky nature of the above merger

Although LiveMint reported very thoroughly and professionally with minimum comment on the terms and mechanics of the proposed Vodafone/Idea merger on March 21st, it swiftly followed up on March 22nd with an extremely acerbic article by consulting editor Sundeep Khanna (entitled A crown of thorns awaits the Vodafone-Idea merged entity), who left few doubts about how negative he felt about the deal, pointing out that:

• Mergers of equal-sized companies were typically disastrous (because of constant turf squabbles), and the way the top jobs were due to be filled looked messy.
• Both brands would continue to be promoted in parallel making this an inorganic, i.e. incomplete,
• Mergers generated in a panic as a reaction to threatening outside events (in this case the massive
disruptive incursion of RJIO) were often put together very badly.
• Despite the aggressive public language about the new JV setting out to dominate the Indian
communications market, he felt that Idea had settled for 'bronze position' and that Vodafone's real focus was now on consolidating its position in Europe as the leader in fully converged communications and that it was no longer committed to the Indian market, noting that 10 years after it first entered the Indian market with its acquisition of Hutchison Telecommunications International stake in Hutchison Essar Vodafone seemed ready to get off the roller-coaster ride that has witnessed two write-downs, an aborted IPO and a pending $2.5 billion retrospective tax charge with little to show in terms of profits.

Nonetheless, as a coda to the above its worth noting that on March 24th India's Foreign Investment Promotion Board (FIPB) announced that as of February 21, 2017 in its 243rd meeting it had retrospectively approved the acquisition by Vodafone India of 100% of the stock of YOU Broadband, an Indian cable operator with 600,000 customers. So perhaps Vodafone still sees a long term opportunity for its Indian operations.

Full article: Part 1Part 2 , Part 3Part 4

Vodafone Egypt selects Procera

Procera Networks has announced a multi-year, multi-million dollar partnership with Vodafone Egypt, the largest mobile operator in the country with over 39 million subscribers, under which its virtualised solutions will be deployed to enhance the subscriber experience for fixed and mobile subscribers.

Procera noted that it was selected following a competitive evaluation, and for the project its virtualised technology will be implemented to provide Vodafone Egypt with subscriber experience analytics, including for encrypted traffic carried on the Internet.

Procera's analytics solutions leverage the visibility provided by the PacketLogic DRDL engine, which is designed to deliver fine-grained application identification despite the increasing use of encryption on the Internet.

As part of the solution, ScoreCard provides a view of quality, with high frequency measurements of service quality for criteria relevant to subscribers, such as web surfing, streaming video, social media, real-time gaming, upload/download performance and voice applications. In addition, analysis of ScoreCard results can be used to target investment in network capacity upgrades and identify potential demand for new services by the network planning team at Vodafone Egypt.

  • Earlier in 2017, Procera Networks reported a record number of contract wins and deployments in 2016 and had added 36 new Tier 1 service provider contracts. It also noted growing adoption of its virtualised DPI technology, which increased 177% versus 2015, with total deployments at over 50 Tier 1 and 2 operators as part of their NFV strategies.
  • In February, Procera announced it had reached a new industry benchmark for NFV performance, achieving 1.8 Tbit/s data throughput for its virtualised PacketLogic network intelligence technology running on Intel-based 1 RU Dell servers equipped with Mellanox 100 Gigabit Ethernet NICs. The test provided scale-up performance to 180 Gbit/s in a single system and scale-out throughput of 1.8 Tbit/s across a 10 RU cluster.

Thursday, April 20, 2017

Verizon: Revenue Down 4.5%, LTE Traffic up 57%

Verizon reported consolidated Q1 revenue of $29.8 billion, a 7.3 percent decrease compared with first-quarter 2016, but down 4.5 percent on a comparable basis excluding divestitures and acquisitions in the period. Net income was $3.6 billion in first-quarter 2017, and EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled $11.2 billion. Consolidated operating income margin was 24.1 percent.

Earnings per share (EPS) were 84 cents in earnings per share (EPS) and adjusted EPS (non-GAAP) ws 95 cents, excluding non-operational items, compared with EPS of $1.06 in 1Q 2016.and adjusted EPS (non-GAAP) of 95 cents, excluding non-operational items, compared with EPS of $1.06 in 1Q 2016. Capital expenditures totaled $3.1 billion in first-quarter 2017.

Some Wireless highlights                                                              

  • There was a net decline of 307,000 retail postpaid connections in first-quarter 2017 included 289,000 phone losses. Prior to the launch of Unlimited service in mid-February, Verizon had a retail postpaid phone net loss of 398,000; after the launch, Verizon added 109,000 retail postpaid phone connections. For the entire quarter, Verizon added a net of 49,000 smartphones to its retail postpaid phone base.
  • Verizon’s retail postpaid connections base grew 1.2 percent year over year to 108.5 million, and retail prepaid connections grew 0.5 percent to 5.4 million.
  • Retail postpaid churn was 1.15 percent in first-quarter 2017, a year-over-year increase of 19 basis points primarily due to increased churn in tablets. Phone customer loyalty remained high, with retail postpaid phone churn of less than 0.90 percent for the eighth consecutive quarter.
  • Total revenues were $20.9 billion in first-quarter 2017, a decline of 5.1 percent compared with first-quarter 2016, due to decreased overage revenue, lower postpaid customers in the quarter and continued promotional activity.
  • In first-quarter 2017, overall traffic on LTE increased about 57 percent compared with first-quarter 2016, while Verizon extended its lead in the industry’s third-party network performance studies across the country.

Some Wireline highlights

  • Total wireline revenues declined 0.6 percent, to $7.9 billion, comparing first-quarter 2017 with first-quarter 2016. Consistent with recent trends and on a comparable basis (non-GAAP), this decline was 3.2 percent, excluding revenues from XO Communications in first-quarter 2017.
  • Total Fios revenues grew 4.7 percent, to $2.9 billion, comparing first-quarter 2017 with first-quarter 2016. This supported revenue growth of 0.7 percent in consumer markets and 2.3 percent in business markets.
  • In first-quarter 2017, Verizon added a net of 35,000 Fios Internet connections and lost a net of 13,000 Fios Video connections. At the end of first-quarter 2017, Verizon had 5.7 million Fios Internet connections and 4.7 million Fios Video connections, year-over-year increases of 3.3 percent and 0.1 percent, respectively.

HK-G Submarine Cable to Offer 48Tbps Capacity

Construction has commenced on a new Hong Kong - Guam Cable system (HK-G) that will offer 48 Tbps of design capacity when it comes into service in late 2019.

The 3,900 kilometer undersea cable, which features 100G optical transmission capabilities, is being built by RTI Connectivity Pte. Ltd. (RTI-C) and NEC Corporation with capital from the Fund Corporation for the Overseas Development of Japan's ICT and Postal Services Inc. (Japan ICT Fund), along with syndicated loans from Japanese institutions including NEC Capital Solutions Limited, among others.

In Hong Kong, the cable is slated to land in Tseung Kwan O (TKO) and will land in Piti, Guam at the recently completed Teleguam Holdings LLC (GTA) cable landing station. HK-G will land in the same facility as the Southeast Asia - United States Cable System (SEA-US).

Russ Matulich, RTI-C's President and CEO, acknowledged this important milestone stating, "Hong Kong is already an important interconnection point for undersea cables, and Guam is emerging as a key telecommunications hub. By extending HK-G to our SEA-US cable investment in Guam, RTI-C is facilitating a new diverse 100G transpacific cable to better serve our customers' traffic requirements between Asia, the United States and Australia." Matulich added, "RTI-C's existing investments, and those under current consideration, will enable other cable owners to better utilize their assets by interconnecting with RTI-C in Hong Kong or Guam."

NTT and Telkom Indonesia Launch Telecom Innovation Initiative

NTT and PT Telkom Indonesia (Persero) announced the launch of the APAC Telecom Innovation Initiative (ATII), a joint research and development initiative intended to support the development of new network services for the Asia Pacific region leveraging virtual infrastructure technologies.

The new joint initiative will focus on establishing technical studies and proof of concepts (PoCs) targeting the requirements for new network services with the advent of virtualisation technology. NTT and Telkom Indonesia plan to expand the initiative through agreements with additional partners, including other service providers, who share the aims of the initiative.

The companies noted that APAC service providers are faced with a number of common issues such as sustainability due to natural disasters and traffic demands complicated by uneven population distribution and growth, particularly in island nations. To help address these challenges ATII will propose new services and technologies tailored for the APAC region.

The ATII will also seek to accelerate innovation and create new markets leveraging information and communications technology (ICT). The initiative will focus on delivering sustainable development through collaboration and promotion with partners across the region to support the development of APAC service providers and countries.

More specifically, taking into account the APAC market environment joint technical studies and PoCs will be conducted with a focus on the speed and availability characteristics of virtualisation infrastructure designed to enable flexible and efficient network services. Initially, three projects have been established:

1.         High value-added network services.

2.         Server platform virtualisation.
3.         Flexible access network virtualisation.

ATII will immediately start joint technical studies and plans to release whitepapers on the identified requirements, specifications and PoCs results. ATII will also liaise and share its findings with the relevant standards organisations and industrial alliances with the aim of advancing and expanding its activities.

In the future, ATII intends to perform field trials with participating service providers and partners in emerging markets that will lead to the creation of commercial services.

Monthly update on the Indian telecommunications market - Part 1

Full article: Part 1Part 2 , Part 3Part 4


The Indian telecommunications market continues to go through tremendous changes which, though occurring in parallel with have been largely independent of, were already happening well before the more general national level social and economic changes instigated (or accelerated) by the reformist government of Narendra Modi.

According to data assembled by the World Bank, in 2014 India with a monthly ARPU of $2.80 was the sixth cheapest nation in the world for phone charges after Sri Lanka, Bangladesh, Iran, Pakistan and Nepal, and in that year its people spent only 2.14% of their average income on mobile phone costs. However, since the dramatic full commercial entry into the Indian mobile broadband market in September 2016 of the Mukesh Ambani-led RJIO operator, whose level of initial investment in its national 4G network, content and services is reported as being around a staggering $20 billion, mobile rates have fallen even further and the absolute value of the market has declined.

According to the Indian Telecommunication Services Indicators Report published by the Indian regulator TRAI for the October to December quarter of 2016 (published April 7th), despite a steep sequential quarter on quarter rise of 7.22% in fixed and wireless subscriptions, from 1,074.24 million to 1,151.78 million as of December 31, 2016, total services revenue for the quarter fell 6.79% to INR 66,532 crore ($9.688 billion). The major factor in that was an amazing decline in monthly ARPU for GSM service (including LTE) of 14.10% from INR 121 in the quarter ended September 2016 to INR 104 ($1.50) in the quarter ended December 2016. On a year-on-year basis monthly ARPU for GSM service (including LTE) declined by 15.32% in the fourth quarter.

Despite radical restructuring and temporary decline of telecoms market, Indian economy beginning to develop long term momentum Despite these surprising local fluctuations in the telecoms sector the national level changes referred to in the first paragraph are still important because they directly and indirectly support a high economic growth rate in India, currently predicated by the IMF at 7.2% in 2017 and 7.7% in 2018. This is a longer-term sustaining platform for further growth in the telecommunications sectors. Macroscopic economic programs include:

Agreement for the implementation of an uniform Goods and Services Tax across all the states; this will to some extent help to support a single integrated national market, which is a crucial advantage for technological development and catch-up, and is supposed to be implemented across India by July 2017.

The effective introduction, by administrative organisation the Unique Identification Authority of India, of the Aadhaar biometric personal identity card, carrying a unique 12 digit number, for well over 1.133 billion Indian citizens as of March 31, 2017. Although more than 150 million Indian citizens are still excluded from the system these are mostly infants. Although this project was initiated in 2010 well before Modi was elected his government has fully supported the program and claims to have already saved around $8 billion through more accurate distribution of food and fuel support to impoverished families.

The energetic pursuit and rooting out of 'black money', which has included Mod's controversial national removal and replacement of high value currency.

Key infrastructure programs including the National Optical Fibre Network (or BharatNet), designed to link 250,000 small villages to the national network, 100 smart cities and high speed rail programmes including the Diamond Quadrilateral project to connect the cities of Chennai, Delhi, Kolkata and Mumbai. In February India announced record spending of INR 3.96 trillion ($59 billion) to build and modernise its railways, airports and roads in a drive to upgrade the strained infrastructure in Asia’s third-largest economy; already under way is the construction of the 1,500 km Mumbai-Delhi Industrial Corridor which includes 24 industrial regions, eight smart cities, two airports, five power projects, two mass rapid transit systems, and two logistical hubs and has an initial budget of $90 billion.

Numerous other less specific programs including national self-sufficiency, morale and capability strengthening programs such as Make in India, the Clean India initiative, the drive to improve the technical competence of the Indian workforce (Skill India), the People’s Bank Plan the Crop Insurance Program.

7-8% growth rate insufficient to prevent India continuing to fall further behind China 

These programs, not all of which are fully funded and active, are all aimed at increasing India's capacity for economic growth, which as noted earlier is currently in the range 7% to 8%. This is a fast rate, around twice the global rate of 3.5%, however, looking back over the last 30 or more years of Chinese economic expansion, when China was at the same economic level as India is now it was growing well over 10% for a decade or more. Over the 28 years from 1989 until 2017 China has grown an average of 9.74% a year, reaching an all time high of 15.40% in the first quarter of 1993

Part 1
Part 2
Part 3
Part 4

Globecomm Deploys Ciena Packet-optical Networking

Ciena announced that Globecomm, based in Hauppauge, New York, a global connectivity solutions provider, has deployed its converged packet-optical and packet networking solutions to address increasing content distribution requirements for applications including video for the news industry, disaster recovery for armed forces and connectivity for ships worldwide.

The upgraded network is designed to enable Globecomm to cost-effectively increase the capacity and improve the reliability and availability of high-bandwidth services to its more than 250 customers globally.

Globecomm is a global connectivity provider operating in more than 100 countries, providing satellite-centric video, voice and managed data solutions for media sector, maritime, wireless, enterprise and government customers. Ciena noted that due to the need to support mission-critical, time-sensitive applications for its customers, Globecomm's network needs to be both responsive and reliable.

Ciena's Ethernet switching, optical transport and network management solutions are designed to provide Globecomm with the fast, reliable and high-performance connectivity required to meet the demands of customers that may be operating in harsh and/or remote environments.

Under its growth strategy, Globecomm is expanding its terrestrial network capacity and reach utilising Ciena's solutions as the backbone. Ciena noted that as part of this initiative the provider recently deployed a high throughput content distribution network (CDN) to support its growing media customer base, while expanding into multiple developing countries in Africa and Asia.

For the project, Globecomm has deployed Ciena's 10 Gigabit Ethernet 5142 Service Aggregation Switch to enable the cost-effective transmission of quality, bandwidth-demanding content such as videoconferencing, surveillance and video streaming over Layer 2 and 3 networks. In addition, the Ciena 6500 Packet-Optical Platform allows Globecomm to customise service delivery and deliver applications at rates from 2.5 to 200 Gbit/s and beyond.

Additionally, utilising Ciena's network management capabilities Globecomm is able to design, schedule and commission services across its network within minutes.

ADTRAN Reports Q1 Revenue of $170.28m, up 18.7%

ADTRAN reported financial results for the first quarter ended March 31, 2017, as follows:

1. Revenue for the first quarter of 2017 of $170.28 million, up 4.5% compared to $162.99 million in the fourth quarter and up 19.7% from $142.20 million for the first quarter of 2016.

2. Gross profit for the first quarter of $73.71 million, up 4.1% compared to $70.79 million in the fourth quarter and up 12.0% from $65.79 million for the first quarter of 2016.

3. R&D expenditure for the first quarter of $31.92 million, down 0.5% compared to $32.08 million in the fourth quarter and up 8.2% from $29.49 million for the first quarter of 2016.

4. SG&A expenditure for the first quarter of $34.77 million, up 1.0% compared to $34.44 million in the fourth quarter and up 13.0% from $30.78 million for the first quarter of 2016.

5. Total operating expenditure for the first quarter of $66.68 million, up 0.2% compared to $66.51 million in the fourth quarter and up 10.6% from $60.27 million for the first quarter of 2016.

6. Net income for the first quarter of 2016 of $6.65 million, compared to net income of $7.57 million in the fourth quarter and net income of $5.01 million for the first quarter of 2016.

7. Cash, cash equivalents and short-term investments as of March 31, 2017 of $125.02 million, versus $123.08 million as at December 31, 2016.

Additional results and notes

ADTRAN reported Network Solutions revenue in the first quarter of $143.60 million, compared with $123.88 million in the fourth quarter 2016, and Services & Support revenue of $26.68 million, versus $18.32 million in the fourth quarter. Access and Aggregation revenue totalled $120.14 million, compared with $93.85 million in the fourth quarter.

For the first quarter, ADTRAN reported domestic revenue totalled $119.26 million, compared with $123.7 million in the fourth quarter, with international revenue of $51.02 million, compared with $39.3 million in the fourth quarter.

Commenting on the results, ADTRAN chairman and CEO Tom Stanton said, "… first quarter revenue (was) driven by increasing momentum in ultra-broadband product sales and continuing strength in the services area… most notably, ADTRAN had very strong performances in FTTP and vectoring products in both domestic and international markets".

Big Switch enhances Big Cloud Fabric

Big Switch Networks, a supplier of next-generation data centre networking solutions, announced it has extended Big Cloud Fabric (BCF) container networking support to VMware vSphere integrated containers, building on the previously introduced multi-container networking support for Mesosphere DC/OS and Kubernetes container orchestration platforms, including Red Hat OpenShift container platform.

Big Switch noted that as demand for container technology grows in enterprise and service provider data centres, a next-generation networking architecture is required to handle the rapid lifecycle of container instantiation, elasticity and retirement. BCF uses SDN to provide a single 'logical switch' managed by a centralised controller, enabling simplified network operations, visibility and telemetry of containers and their hosts, and network automation for application and micro-services deployment.

vSphere integrated containers allow organisations to use existing infrastructure to run containerised apps together with traditional applications on the same infrastructure, as well as implement tools, policies and processes to manage containerised applications in production. With the enhanced BCF, customers gain the same benefits for networking infrastructure hosting a mix of traditional VM and containerised workloads.

In container environments, the Big Switch BCF controller enables physical network automation as well as providing greater visibility of container-to-container traffic across the network through integration with vSphere integrated containers.

Big Cloud Fabric is designed to offer an optimised networking fabric for multiple VMware solutions via a single point of integration. Within VMware environments, BCF connects with the VMware vCenter API to provide physical network automation and end-to-end visibility for vSphere. In addition, the BCF controller directly integrates into vCenter to help simplify and automate application deployments on its physical SDN fabric and physical networks.

This BCF integration allows the following aspects of the network to be automated, eliminating the need for intervention from VM or network administrator: automatic ESXi host connectivity with fabric using LAG/MLAG; automated Layer 2 network configuration; and automatic network policy migration for vMotion.

Integrated VMware visibility via BCF also helps network and virtualisation administrators to resolve cross-domain issues, while vSphere integrated containers provide enterprise container infrastructure to help IT teams run both traditional and containerised applications on a common platform. Combined with BCF, the same physical infrastructure can be logically provisioned and orchestrated in different VMware environments for workloads including vSphere, vSphere + NSX, vSphere + vSAN, VMware integrated OpenStack and vSphere integrated containers.

In addition, the scale-out architecture of BCF can accommodates growth in east-west traffic with the roll-out of micro-services.

Criterion Offers Support for CORD

Criterion Networks, a network transformation and solution integration company with a focus on supporting the adoption of SDN, NFV and the cloud, announced the availability of the Mysterious-Decision release of CORD (Central Office Re-architected as a Datacenter) on the Criterion SDCloud platform.

Criterion Networks stated that as enterprises and service providers move towards SDN/NFV deployment, it can provide an on-demand SDN/NFV solution environment. SDCloud Enterprise, Criterion's SaaS-based solution orchestration platform is designed to enable customers to bring up the SDN/NFV solution environment of their choice for development, evaluation and learning.

The cloud-based development and test environment, CORD-in-the-Cloud (CiTC), is designed to simplify the process of launching the SDCloud solution and allows for one touch provisioning of the components of CORD in an isolated, multi-node virtual environment. CiTC also offers a base platform to build more complex use cases such as Mobile CORD (M-CORD).

The company noted that reliably implementing complex test-beds such as CORD in a stable manner presents a challenge for developers. CiTC facilitates test-bed creation and is designed to help customers realise the potential of CORD. With all components of CORD instantiated by SDCloud, customers are able to validate configurations with different versions of the solution components, change controllers, orchestrators or the Open Stack VIM, which constitute key components of the CORD framework.

Criterion Networks, an early contributor to ON.Lab and ONF, provides CiTC for established use cases such as R-CORD and is used by ON.Lab for development purposes. It also offers complex solutions such as CiTC, OpenStack sandboxes with different SDN controllers and other OpenStack integrated SDN/NFV solutions, together with eLearning programs through the Criterion Networking Academy.

Criterion launched its SDCloud Platform in April 2016, offering a scalable on-demand cloud deployment and provisioning platform for evaluating SDN/NFV and OpenStack solutions. The platform initially provided support for Software Defined Data Center (SDDC) use-case solution.

In July last year, Criterion Network Labs, an independent network interoperability test facility, announced the launch of CNLabs SDN/NFV Alliance Program, intended to bring together SDN/NFV product vendors and end users to help ensure that SDN/NFV products meet the solution and production requirements of customers.

Media Commerce Deploys ECI for Optical Network in Colombia

ECI, the Elastic Network company, announced that in partnership with Media Commerce based in Bogota, the largest operator of optical network infrastructure in Colombia, it has completed the deployment of packet-optical metro and aggregation networks nationwide.

Media Commerce of Colombia, founded around ten years ago, has subsequently expanded through both the acquisition of local operations and building out networks for operators. The company also has a history of investing in the upgrade of its fibre infrastructure to improve coverage for business and private networks regionally.

The new Media Commerce infrastructure features a combination of ECI's Apollo (OPT) and Neptune (NPT) family of products, with management provided by the LightSOFT NMS solution.

ECI's Apollo suite is designed to provide transparent and flexible DWDM transport with integrated packet services. The platform combines low-latency OTN transport and OTN switching with software-configurable optical routing for enhanced efficiency. For the project with Media Commerce, a combination of the Apollo 9603 and 9608 solutions provides the foundation for the optical backbone.

The Neptune family of products, supporting packet transport with integrated optics, will provide transport in the metro rings. Neptune offers a MPLS-based, multi-service packet transport solution for metro networks, and via a range of interfaces is designed to enable cost-optimised, multi-service packet transport of both packet and TDM-based services over a converged packet infrastructure.

Huawei's Target of $150bn revenue by 2020 - Part 3

Huawei unique in being a world leader in professional and consumer electronics

Huawei is currently unique, in the world, at least for a company of its size, in being amongst the leaders in both professional electronics equipment and also in consumer devices. Ericsson tried stubbornly for many years to pull off the same trick but failed utterly and still bears the scars and arguably its present woes stem largely from that lengthy, expensive and futile endeavour. Motorola was once a world leader in consumer and also quite strong in professional equipment but now is neither. John Chambers' reckless and amateurish and ultimately disastrous attempts to enter the consumer field damaged his credibility during his last few years as Cisco CEO. Nokia's precipitous collapse as the world's long time dominant mobile phone provider was quite shocking though the company has managed to hang on still in the professional field. Samsung, the market leader in smartphones, has a modest position in the base station market but shows no signs there of higher ambitions.

Despite stalled profits Huawei's commitment to massive growing R&D expenditure unwavering

In 2016, Huawei's spending on R&D rose by just over 28% from RMB 59,607 million in 2015, which was 15.1% of revenue, to RMB 76.4 billion ($11 billion), which was 14.6% of revenue. According to the EU Industrial R&D Investment Scoreboard, an annual ranking of the world's top 2,500 R&D investors, Huawei ranked as the world's eighth-largest company in terms of R&D spending in 2016. By comparison, Apple spent $10.39 billion in 2016, its highest level ever (although its Q4 spending did touch $2.8 billion). Meanwhile, Ericsson cut back its R&D spending in 2016 by over 10% to around $3.7 billion and Cisco's R&D has been flat at just over $6 billion for the last three years.

As shown in Part 1, Huawei's profits stalled in 2016 at RMB 37,052 million, only 0.4% up compared to RMB 36,910 million in 2015, which many analysts ascribed to the company's continued steady growth in R&D. Several overexcited commentators made rather too much fuss about that, but rotating CEO Eric Xu (whose six month tenure expired March 31st) pointed out that 2016 profits were still around 7% of revenue and the company's management had always made it clear it would never adjust its R&D expenditure just to meet a profit target.

In 2016, according to WIPO, Huawei filed 3,962 international patent applications which ranked it second in the world on that parameter behind only ZTE, which filed 4,123 patent applications during the year. These add to the total of 52,550 patent applications in China and 30,613 outside China, filed as of December 31st 2015 (of which s total of 50,377 had been granted at that time). According to Huawei's recent 2016 report it has so far been granted 62,519 patents. Roughly 45% of Huawei's 180,000 employees, or about 80,000, are R&D engineers working in 15 research institutes and centres and 36 joint innovation centres where they collaborate with global innovators. Huawei also is working with over 300 universities in more than 20 countries, and has sponsored over 1,200 innovation research projects by them. According to Huawei, it is currently a member of over 360 standards organisations, industry alliances, and open source communities, and holds over 300 positions of responsibility, and within these organisations its engineers have submitted 49,000 proposals, with around 6,000 submitted in 2016 alone.

What does Huawei consider its key achievements during 2016?

These achievements are scattered over several different sections and the following is a sample of Huawei's activities:

• Carrier operations – its Polar code was selected as a 5G standard.

• Collaboration with major operators - with Vodafone, Telefónica, Deutsche Telekom and China Unicom to roll out new services in smart home, smart meter, and connected vehicle domains; with China Telecom, China Mobile, China Unicom, Deutsche Telekom, Etisalat and others on benchmarking projects to develop video into a basic service; providing Deutsche Telekom, Telefónica, and China Telecom with public cloud services to help expand their B2B business; and strategic partnerships with China Unicom Shanghai and HKT to help evolve their O&M systems.

• Cloud - work with over 500 partners to provide cloud computing solutions across over 130 countries and regions; public cloud and big data solutions provided to over 300 financial institutions including six of the world's top banks; and deployment of over 2 million virtual machines and 420 cloud data centres.

• Enterprise business - installed smart city solutions in 100 cities in 40 countries; smart grid solutions installed for over 170 customers in the electricity sector across 65 countries.

• Consumer business - shipped over 139 million smartphones, up 29% YoY but below a target of 140 million (according to IDC Huawei shipped 45.4 million smartphones in Q4 for a unit market share of 10.6% and in 2026 shipped 139.3 million for a market share of 9.5% in a total market up only 1.1% YoY, and shipped 76.6 million phones in China for a 16.4% market share just behind OPPO); according to one source by end of 2016 Huawei had a market share of over 15%% in 33 countries and over 20% market share in 22 countries, half in Europe; and Huawei said it achieved key technological innovations in the consumer business including chipsets, UI and dual-lens camera technology.

Representative technology achievements in 2016/17


In December 2016 Huawei at the 57th annual Battery Symposium in Japan announced  new graphene-assisted heat-resistant technologies that would enable Li-ion batteries to remain functional at 60 degrees C, 10 degrees higher than the existing upper limit and which would also support a lifespan for the graphene-assisted Li-ion batteries twice as long as ordinary Li-ion batteries. Huawei also, based on technology first announced in 2015, confirmed plans to bring to market a mobile phone with 3000 mAh batteries rechargable to 48% of capacity in five minutes.

5G technology 

In September 2016 at a conference in Beijing, Huawei announced that, working with China Academy of Information and Communications Technology (CAICT), China Mobile, China Unicom and China Telecom, it had completed first-stage field test verification of 5G air interface technologies, which: demonstrated three times spectrum efficiency improvement; successfully tested flexible air interface slicing, a technology expected to be a key component of 5G and which supports a particular connection type with a specific way of handling the control and user planes to provide only the traffic treatment that is necessary for the use case and avoid other unnecessary functionality.

On March 1st at MWC Huawei and Deutsche Telekom provided a demo based on work done at Deutsche Telekom's 5G network lab in Bonn, Germany using Huawei all cloud architecture to enable multiple industry services over one physical network, aimed at validating wireless network slicing technology and specifically showing E2E network slicing including RAN, transport, core network and massive MIMO C-band for high throughput, physical isolation and ultra-low latency mobile edge computing technology.

On March 31st Huawei and Telenor announced that during the month they held the first 5G-based, E-band, multi-user MIMO demo in Norway reaching a maximum speed of 70 Gbit/s.

Smartphone development

In its review of the 2016 global market for smartphones, which it said grew only 1.1% YoY to 1470.6 million, IDC observed that in the past year, vendors such as Huawei, Xiaomi and LeEco had developed phones with dual cameras, thin bezels, and digital headphone connectors well before many overseas vendors.

Summary and commentary

It is dangerous to bet against momentum on the sports field, the stock market, in business or in politics, and Huawei is certainly at this time going like a rocket. Almost whatever happens it is hard to see the company's drive for growth slowing significantly in under 2-3 years unless China Inc. itself crashes, which many analysts have been forecasting for years. However, China is a well-educated, hardworking, politically stable, technically ambitious and opportunistic country, centrally planned by a strong technocratic government with a very clear sense of direction and a sense of global mission and also with plenty of momentum, and nominal GDP per capita of $8,100 in 2016 is still 20% below the global average, so that seems rather unlikely.

Similarly, at Huawei there is just so much going on in terms of new technologies, new products, new joint ventures that even if growth slows and the company takes a year to consolidate and maybe lift its product margins the opportunities and desire for growth will still dominate the situation. However, there are a few caveats. Firstly, too much success for too long can result in complacency, overstaffing, reduced work rate and carelessness by staff who take success created by an earlier generation as guaranteed. There are rumours that Huawei's top management is worried that has happened and has been reading the riot act about under performance to many of its senior personnel, and even a suggestion that a whole layer of older management is about to be retired early in a bid to rejuvenate the company. Those kinds of internal strains and necessary restructuring are certainly quite likely in a company which has been regularly doubling in size every 3-4 years. There are at least two much more worrying issues than those necessary organisational adjustments to explosive growth mentioned above.

The first is the underlying threat of what one could term the 'constant curse of the consumer combination',which as noted above has already damaged or destroyed several once-great electronic hardware companies. Despite Huawei's remarkable consumer performance over the last few years there are already hints that the curse may be preparing to strike again. Both OPPO and Vivo arguably did even better at least in unit terms than Huawei in 2016. OPPO is now the leading Chinese smartphone company in terms of units shipped and at global level both OPPO and Vivo, according to IDC, gained more global market share than Huawei. Both companies are also ahead of Huawei in the fast growing, low priced Indian smartphone market. Suddenly Huawei not only has to take on Apple and Samsung in the high priced smartphone market but also watch its back against OPPO and Vivo at the low end. While Huawei may certainly gain share over the next 18 months, what one might call an outright market-dominating win by Huawei now looks very improbable and a five year scenario might suggest a global market which is much more evenly divided between half a dozen top players than has historically been the case.

The second problem for Huawei is the difficulties it has and is likely to continue to have in penetrating the U.S. market, where on the consumer side the company currently only has only a 0.4% market share mainly because the majority of consumer phones are marketed via the two main operators. Problems on the professional side have been frequently covered both in OND and elsewhere and with the present mindset of the ruling Republicans that situation looks unlikely to change in the next few years.

Huawei's semi-legitimate hope is that by forcing the pace in communications technology it can create a situation whereby AT&T and Verizon are forced to ask the U.S. government to drop its informal embargo on the two companies freely trading with Huawei because they are falling behind in technology. On the whole that probability looks quite slight, at least for a few years. After all, the U.S. has trailed several Asia Pacific countries for years in the use of top end fixed broadband in the home and although grumbling is frequent no one other than Google has made any serious effort to fix the problem. Similarly, the mass use of wireless technology in the U.S. lagged Europe and Asia for many years without huge impact. Huawei will certainly eventually achieve success in the U.S. but that may take at least five and up to ten years to achieve.

Wednesday, April 19, 2017

Verizon Award $1.05B Contract to Corning for Fiber and Related Hardware

Verizon Communications has announced a three-year minimum purchase agreement with Corning for the provision of fibre optic cable and associated hardware equipment to Verizon to ensure coverage and capacity for its nationwide wireless broadband network.

Under the new agreement, Verizon will purchase from Corning up to 20 million km (12.4 million miles) of optical fibre each of the three years from 2018 through to 2020, with a minimum purchase commitment of $1.05 billion.

It was noted that in recent months, Corning has announced plans to expand capacity and to invest more than $250 million in its optical fibre, cable and solutions manufacturing facilities to help address demand from carrier and enterprise customers worldwide. Corning expects that these capacity expansions will begin to come online during 2017 and become fully operational in 2018.

Verizon noted that it is engaged in revamping its network architecture based on a next-generation fibre platform designed to support all of the company's businesses. The new architecture is designed to improve Verizon's 4G LTE coverage, speed the deployment of a 5G network and enable the delivery of high-speed broadband to homes and businesses.

In an initial deployment, Verizon launched its One Fiber approach in Boston last year and plans to invest $300 million over six years to deploy it throughout the city. Verizon announced plans in April 2016 to build a new fibre network to support services including Fios in Boston, and invited expressions of interest from residents and small businesses in eight neighbourhoods in the city, which it calls 'fibre zones'.

In January of this year the company announced the launch for customers in parts of Boston, as well as Norfolk, Virginia, of the Fios Instant Internet service offering symmetrical 750 Mbit/s bandwidth.

Verizon also announced the launch of Fios Instant Internet in greater New York City and northern New Jersey, Philadelphia and Richmond, providing a total of over 7 million customers on the East Coast with access to its instant bandwidth offering.

Regarding the agreement, Viju Menon, Verizon chief supply chain officer, commented, "Verizon identified a shortfall in fibre supply and has been working with business teams to forecast demand and fill supply gaps with existing suppliers... securing the required volume of optical fibre and hardware solutions with Corning will ensure it can meet its planned rollout schedules".