Friday, May 19, 2017

Broadband Forum progresses on Cloud Central Office and 5G

The Broadband Forum announced at its second quarter meeting in Taipei significant progress on five projects relating to the realisation and implementation of Cloud Central Office (CloudCO), which is scheduled to be launched later in the year, with preparations to test the implementations under way at the first Open Broadband Lab in Asia, which was announced recently.

The Broadband Forum's CloudCO projects encompass architecture and hardware, as well as software implementation and migration, and represent one of the first use cases for the recently launched Open Broadband initiative designed to provide a new platform for the integration and testing of broadband-related services.

The forum is also focusing on key use cases for 5G networking, including hybrid wireless wireline networking in access and home networking, network slicing and projects for backhaul and fronthaul transport.

Additionally, further aspects of the forum's Broadband 20/20 vision include the evolution of TR-069 into a user services platform for premises' networks and compute resources, for example entertainment and the Internet of Things (IoT), which are scheduled to be released later this year.

During the second quarter meeting a number of specifications were approved, including TR-390, which defines standardised mechanisms for performance measurement and is designed to enable service providers to gain greater insight into how the access network is performing.

Unveiled in August last year, the CloudCO projects aim to enable functionality that can be accessed via a northbound API and cover:

1.         Definition of a reference architectural framework for the CloudCO specifying the behaviour of functional modules.

2.         Definition of interfaces (potentially including APIs, Yang or other schemas and protocols) between the functional modules.

3.         A software reference implementation of the framework to allow code to be upstreamed to open source organisations in the future, plus enable VNF vendors to test functions on the reference implementation.

4.         A project on CloudCO coexistence with, and subscriber migration from, legacy broadband architectures, such as TR-178-style architectures.

5.         A project to deliver a hardware reference implementation of CloudCO based on deployment considerations.

Thursday, May 18, 2017

Microsoft Builds Cloud Data Centers in Johannesburg and Cape Town

Microsoft announced plans to open cloud data centers in Johannesburg and Cape Town, South Africa by next year.  These will be Microsoft's first data centers on the African continent.

The facilities will be used to deliver the Microsoft Cloud — including Microsoft Azure, Office 365 and Dynamics 365.

This announcement brings us to 40 cloud regions around the world

Cisco reports Q3 revenue of $11.94bn, up 3.1%

Cisco reported financial results for its third quarter ended April 29, 2017, as follows:

1.         Revenue for the third quarter of fiscal 2017 of $11.94 billion, up 3.1% compared with $11.58 billion in the second quarter and down 0.5% from $12.00 billion in the third quarter of 2016.

2.         Gross profit for the third quarter of $7.52 billion, up 3.3% compared with $7.28 billion in the second quarter and down 2.6% from $7.72 billion in the third quarter of 2016.

3.         R&D expenditure for the third quarter of $1.51 billion, flat compared with $1.51 billion in the second quarter and down 7.4% versus $1.63 billion in the third quarter of 2016.

4.         SG&A expenditure for the third quarter of $2.71 billion, up 1.1% compared with $2.68 billion in the second quarter and down 10.0% from $3.01 billion in the third quarter of 2016.

5.         Total operating expenditure for the third quarter of $4.35 billion, down 0.7% compared with $4.38 billion in the second quarter and down 8.2% from $4.74 billion in the third quarter of 2016.

6.         On a GAAP basis, net income for the third quarter of fiscal 2017 of $2.51 billion, compared with net income of $2.35 billion in the second quarter and net income of $2.3.5 billion in the third quarter of 2016.

On a non-GAAP basis, net income for the third quarter of $3.03 billion, compared with net income of $2.86 billion in the second quarter and net income of $2.88 billion in the third quarter of 2016.

7.        Cash, cash equivalents and investments as of April 29, 2017 of $67.97 million, compared with $71.84 billion as January 28, 2017 and $65.76 billion as at July 30, 2016.

Additional results and notes

For the third quarter of fiscal 2017, Cisco reported cash flow from operating activities of $3.4 billion, compared with $3.8 billion in the second quarter and $3.1 billion in the third quarter of fiscal 2016.

In the third quarter of fiscal 2017, Cisco repurchased approximately 15 million shares of common stock under its stock repurchase program at an average price of $33.71 per share, for an aggregate purchase price of $0.5 billion. As of April 29, 2017, Cisco had repurchased and retired 4.7 billion shares of common stock at an average price of $21.21 per share for an aggregate purchase price of approximately $99.1 billion since the inception of the stock repurchase program.

  • Sales of Cisco's next-generation firewall portfolio grew 49%, with 6,000 new customers in the quarter, bringing the total customer base to over
  • 73,000.
  • Cisco's advanced threat portfolio delivered strong revenue growth of over 30%, as the company added 6,600 new customers, bringing the total number of AMP customers to over 35,000.
  • In its data center switching business, Cisco has a combined install base of over 20,000 customers who are using the portfolio to help them build, run, and manage their private and hybrid cloud environments.
  • Cisco's ACI portfolio grew 42%, as customers move to 100 gig and look to automate the network and increase network performance, visibility, and security. We added almost 1,200 new Nexus 9K customers in the quarter, bringing the total install base to 12,000.
  • APIC adoption continues to increase rapidly with over 380 new ACI customers in Q3, bringing the total to nearly 3,500.
  • Total product revenue was flat year-over-year. 

For the fourth quarter of fiscal 2017, Cisco expects revenue to be in the range of down by between 4% and 6% year on year versus $12.60 billion in the fourth quarter of 2016.

Cisco Extends Layoffs to 1,100 More Positions

Cisco announced plans to increase the number of layoffs in its restructuring program by 1,100 additional postiions.

In August 2016, Cisco initially said it would eliminate 5,500 jobs to improve profitably.

The company issued a weaker than expected outlook for its fourth quarter, saying revenue is likely to fall 4-6% compared to a year earlier.

Comcast Business trials SD-WAN solution for mid-market/enterprise customers

Comcast Business announced that it is beta testing a new software-defined WAN (SD-WAN) solution targeting mid-market and enterprise customers that combines gigabit connectivity with the flexibility of software-defined networks to provide capabilities including centralised network policy management and lower operating costs.

Comcast Business claims to be the first cable company to introduce a carrier-grade, SD-WAN platform designed for enterprises and multi-site businesses. For the new solution it has partnered with Versa Networks, a provider of next-generation, software-based networking and security technology. Leveraging the Versa Cloud IP Platform, Comcast is able to offer a secure turnkey service that improves operational efficiency for customers.

Comcast Business noted that the SD-WAN beta trial will continue during the summer, with a full market launch anticipated for later in the year.

Comcast Business added that it is currently rolling out Business Internet 1000, a DOCSIS 3.1-based gigabit Internet service for business customers, and plans to extend availability throughout its service areas. It also offers a range of multi-gigabit, fibre-based Ethernet services nationwide. The combination of SD-WAN capabilities with high-speed broadband and Ethernet services is designed to offer an advanced solution for mid-market and large enterprises investing in hybrid WAN services.

Versa Networks recently announced a significant expansion of its SDN capabilities to support software-defined branch (SD-Branch) as well as SD-WAN solutions. The Versa Cloud IP Platform has been enhanced to allow large enterprises and service providers to virtualise and software-define the branch and WAN to help reduce complexity and increase flexibility.

The enhanced Versa Cloud IP Platform offering enables customers to software-define IP services across the branch office and WAN and specifically offers features including support for third-party virtual network functions (VNFs), integrated WiFi and Ethernet switching support and embedded LTE.

Commenting on the new SD-WAN offering, Kevin O’Toole, SVP of product management at Comcast Business, said, "The SD-WAN solution pairs a carrier-grade, hosted SDN environment with widely available gigabit service… SD-WAN and gigabit bandwidth solutions herald a new generation of networking that provides the bandwidth, scalability, reliability and flexibility needed for cloud applications that are transforming business operations".

Equinix teams with Eastern Light to build Stockholm-Finland dark fibre route

Equinix, the global interconnection and data centre company, has announced it is working with Sweden-based independent dark fibre infrastructure provider Eastern Light to establish a new international optical cable route in northern Europe.

The new cable system is non-amplified and designed to allow customers to utilise the equipment of their choice over dark fibre. The cable system will connect from Stockholm, Sweden to Hanko, Helsinki and Kotka in Finland, along the route terminating in two Equinix International Business Exchange (IBX) data centres: HE6 in Helsinki and SK2 in Stockholm. The Equinix facilities serve as key interconnection points for the Nordics region and support the transmission of global Internet traffic in the region.

By connecting to Equinix data centres, Eastern Light and its dark fibre customers can leverage Equinix's established business ecosystems and interconnection platform, Platform Equinix, which provides access to the markets and ecosystems that support digital business worldwide.

Equinix noted that Stockholm-based Eastern Light is currently building a series of new international optical cable routes in northern Europe, with a focus on selling dark fibre to operators and other customers that require control over their own infrastructure.

Eastern Light's main supplier of submarine sea cable systems is NSW (Norddeutsche Seekabelwerke), and the new cable system has been optimised utilising Ciena's GeoMesh solutions as part of its dark fibre offering. The Sweden-Finland portion of the cable is scheduled for completion in the autumn of 2017.

The new Eastern Light cable integrates the cable landing station and interconnection hub within a single solution at Equinix's Helsinki and Stockholm data centres, eliminating the need for a beach cable landing station. This helps to reduce cost and complexity and enhance reliability, and will enable Eastern Light customers to scale bandwidth using advanced networking technologies such as SDN.

  • In March, Equinix announced the expanded availability of the Equinix Cloud Exchange, bringing the solution to three new markets, including Dublin, Milan and Stockholm. The solution offers direct, private access to multiple cloud providers for European businesses and enables global enterprises to orchestrate hybrid and multi-cloud solutions across multiple locations.

EXFO introduces Universal Virtual Sync software for network latency monitoring

EXFO, the specialist supplier of network test, monitoring and analytics solutions, launched Universal Virtual Sync, a software-based solution designed to enable communications service providers to accurately and cost-effectively measure network latency.

EXFO's new Universal Virtual Sync software tool provides real-time visibility into latency behaviour helps operators improve service quality instantly for applications such as video, VoIP and interactive services, and is also key to assuring the sub-millisecond latency performance necessary for C-RAN, 5G and NFV applications.

The company noted that latency, or delay, can be an issue for subscribers using interactive, real-time applications such as streaming and gaming, and can lead to churn if the quality of experience does not meet expectations. In addition, for service providers latency is difficult to manage and is different for upstream and downstream IP traffic.

These factors means that service providers require a solution that allows them to reliably measure unidirectional latency in order to identify the direction of degradations and the location of excessive or uncontrolled delay. The new EXFO Universal Virtual Sync solution is designed to enable service providers to address this need.

Regarding the new solution, Claudio Mazzuca, EXFO VP of systems and services, commented, "Customers are demanding more bandwidth, better coverage and predictable service performance… so service providers need a strategy for network latency management… EXFO's standards-compliant measurement algorithm is simple to deploy and there is no hardware to install, maintain or upgrade, which delivers capex and opex savings".

TE SubCom provides update on progress with Hawaiki cable system

Hawaiki Submarine Cable and TE SubCom, a TE Connectivity company that delivers undersea communications technology, have provided a further update on the project to deploy the 14,000 km Hawaiki trans-Pacific cable system that will link Australia and New Zealand to the mainland U.S. and Hawaii and American Samoa.

The partners have announced manufacturing progress, as well as ongoing advances with the installation permitting process in New Zealand, Australia and the U.S., stating that the Hawaiki cable system remains on schedule for completion by mid-2018.

Specifically, TE SubCom and Hawaiki Submarine Cable announced that:

1.         At SubCom’s Newington, New Hampshire facility, more than 13,000 km of cable for the Hawaiki system has been manufactured, together with more than 150 completed repeaters.

2.         Installation permits for Australia, New Zealand and Oregon are in process, and are progressing as expected in Hawaii.

3.         Horizontal directional drilling (HDD) for the cable landing in Pacific City, Oregon has commenced and is due to be completed over the coming weeks.

4.         In Sydney, the construction of the land duct route is progressing, with more than half of the conduits installed, while HDD operations are scheduled to begin in June.

5.         The first cable load, including 7,000 km of cable, is scheduled to begin in June.

New Zealand's Hawaiki Cable announced in 2013 that it had awarded a turnkey supply and installation contract to TE SubCom to build the 14,000 km trans-Pacific cable linking Australia, New Zealand and Hawaii to the US west coast.

  • The Hawaiki cable system will support capacity of up to 10 Tbit/s per fibre pair on the Australia/New-Zealand to U.S. route, while a number of Pacific Islands along the route will be able to connect to the main trunk.  The wet plant equipment is based on 100 Gbit/s technology and designed to allow for future upgrades. The cable system will also feature SubCom's OADM branching unit technology to allow connection of multiple regional branches to the main cable.

CommScope introduces High Speed Migration platform for data centres

CommScope, a global provider of communications network infrastructure solutions, announced the introduction of a High Speed Migration platform, designed to help data centre managers as they seek to develop faster, more agile, high-density migration plans.

CommScope's High Speed Migration portfolio is designed for duplex and parallel applications and allows customers to adopt the best approach to deliver the data centre architecture to meet their specific requirement. The offering is also designed to support higher speeds and emerging applications without the need to replace existing infrastructure. CommScope also has a team of network architects who are familiar with customer's business needs and can provide insight into future data centre and technology trends.

The following CommScope solutions constitute the foundation for the initial phase of the High Speed Migration platform and are designed to provide support for current and future high speed applications:

1.         MPO connectivity options: 24-fibre connections that enable low initial cost duplex deployments with a single connection; 12-fibre solutions to support the expansion of legacy 12-fibre infrastructures; and 8-fibre to support QSFP technologies and addressing customers utilising the parallel optic configuration.

2.         Fibre optic panels: ultra- and high-density panels designed to simplify management of duplex and parallel ports for dynamic migration and flexibility.

3.         Ultra-low loss (ULL) performance: ULL pre-terminated components that enable longer link spans with increased connectivity options and support for attenuation-sensitive applications.

4.         LazrSPEED WideBand OM5: part of the flagship SYSTIMAX portfolio, recently designated OM5 by the ISO/IEC, the products enhance the ability of short-wavelength division multiplexing to provide a four-fold increase in usable bandwidth while maintaining backward compatibility with legacy multimode fibre.

5.         imVision: the automated infrastructure management system (AIM) that enables oversight and control of the SYSTIMAX physical network connectivity solutions.

Wednesday, May 17, 2017

China Telecom launches 100G Asia-Europe on Terrestrial Route

Hong Kong-based China Telecom Global (CTG), the subsidiary of China Telecom established in 2012, announced the launch of 100 Gbit/s service capability over its terrestrial cable system to address demand for high capacity connectivity between Asia and Europe in collaboration with Russian operators.

Building on the launch of the Super TSR (Transit Silk Road), an ultra-low latency terrestrial route via the China-Kazakhstan Gateway, the latest initiative further diversifies CTG's product portfolio across the Europe-Asia route.

CTG's new 100 Gbit/s capability is supported by cross-border transmission systems leveraging the China-Russia, China-Mongolia-Russia and China-Kazakhstan-Russia routes. The solution will be managed in collaboration with Russian partners, with which CTG has established a long-term strategic relationship.

CTG stated that the service launch represents the first terrestrial 100 Gbit/s bandwidth option available between Asia and Europe, and is intended to support increasing IP transit/transmission demand from carrier partners and IP service providers.

CTG launched the Super TSR last year, offering latency performance of 147 ms from Shanghai to Frankfurt, Germany and 159 ms between Hong Kong and Frankfurt, which is claimed to be 10 ms lower latency than on existing routes. The new shorter route was implemented in partnership with a Kazakhstan operator. CTG noted that the developments are part of its efforts to support China's Belt and Road initiative.

  • Previously, last December CTG and Nepal Telecom announced an agreement to deliver IP services in Nepal leveraging the newly launched terrestrial route connecting China and Nepal, via Jilong (Rasuwa) Gateway.

Video: Connecting Key Destinations - @Global_Capacity

Global Capacity is expanding seven of its OneMarketplace POPs, adding access to its high-performance Ethernet backbone, expanding Ethernet access for local businesses, and adding connections for cloud business services.

In this video, Mary Stanhope, VP of Marketing for Global Capacity, provides an update.

See video:

Video: New Subsea Capacity for the Caribbean - @DeepBlueCable

Deep Blue Cable is a new 10,000-km undersea cable system being developed for the Caribbean.

 In this video, Stephen Scott, CEO of Blue Deep Cable, talks about delivering a new wave of communication to the Caribbean and the Americas.

 See video:

Beijing Internet Harbor Tech Deploys Coriant's DCI

Beijing Internet Harbor Technology Co., Ltd. (BIH), a leading provider of Internet Data Center (IDC) and value-added cloud computing services in China, has deployed the Coriant Groove G30 Network Disaggregation Platform (NDP) to scale metro network capacity and enhance high-speed interconnect services for its end-user customers, including large and small enterprises, Internet and Web 2.0 providers, and government agencies. The Coriant Groove G30 solution for Internet Harbor includes coherent 200G line side transmission, and spans major metropolitan cities across China, including Beijing, Shanghai, Guangzhou, and Shenzhen.

“Digital technologies and cloud computing are rapidly transforming the enterprise communications landscape across China and driving the need for more scalable, flexible, and efficient data center interconnect services,” said Ren Zhiyuan, CEO, Beijing Internet Harbor Technology Co., Ltd. “From best-in-class metro transport solutions to a world-class service and support team, Coriant has proven the ideal technology partner as we have expanded our footprint and scaled our metro infrastructure. With the addition of the Coriant Groove™ G30 solution, we are positioned to take our data center interconnect services to an entirely new level.”

The compact 1RU Groove G30 solution, which can be configured as a muxponder, enables Internet Harbor to cost-efficiently support delivery of 10G, 40G, and 100G interconnect services while maximizing utilization of fiber resources with coherent 200G DWDM transport. The Groove G30 NDP stackable solution supports 3.2 terabits of capacity throughput in a compact and highly pluggable 1RU form factor.

ADVA Ensemble upgrades NFV platform to support uCPE

Ensemble, a division of ADVA Optical Networking, has launched a major upgrade of its NFV platform, a software-based suite designed to enable the low-cost deployment of universal CPE (uCPE) solutions, adding key enhancements for telco-scale virtualisation.

With the enhancements, service providers are able to combine multiple virtual network functions (VNFs) on a single uCPE, rather than stacking multiple boxes, to gain lower total cost of ownership. The new NFV platform also features LTE wireless support and zero touch provisioning, designed to eliminate the need for site visits for service activation. These capabilities allow the shipment of servers directly from COTS suppliers to end customers.

The latest Ensemble release provides enhanced provisioning capabilities and includes significant resource optimisation, enabling service providers to reduce NFV infrastructure footprints to a single Intel Atom core. The update is also designed to address the issue of how to expand OpenStack beyond the data centre. By incorporating local OpenStack controllers it effectively embeds the cloud in compute nodes and helps to address the problems that service providers face.

In addition, Ensemble advances the use case of SD-WAN by allowing service providers to deploy SD-WAN as a VNF on a COTS server, rather than utilising a traditional closed appliance.

  • Separately, ADVA's Ensemble announced that Verizon has selected the Ensemble Connector as part of the deployment of its universal CPE (uCPE) solution. Through the agreement, Verizon is using the Ensemble Connector as its NFV infrastructure (NFVI) on COTS white box servers. Ensemble Connector's zero touch provisioning enables Verizon to drop-ship servers directly from the COTS supplier to the end customer, simplifying supply chain logistics.

Huawei Marine completes survey for SeaX-1 cable system

Huawei Marine Networks, the joint venture between Huawei Technologies and UK-based Global Marine Systems, and Singapore-based Super Sea Cable Networks (SEAX) announced the completion of offshore and inshore marine surveys covering the full route of its SEA Cable Exchange-1 (SeaX-1) submarine cable system that will kink the eastern seaboard of Peninsular Malaysia, Singapore and Indonesia.

The SeaX-1 cable system comprises a 250 km high-speed, high capacity 24 fibre-pair undersea optical cable that will connect Mersing (Malaysia) with Changi, Singapore and Batam in Indonesia. Once commissioned the cable system, which is designed to meet growing demand for bandwidth in the South East Asia region, will be owned and operated by Super Sea Cable Networks.

Huawei Marine stated that it has commenced manufacturing of the submarine cable for the cable system, with the SEAX-1 cable scheduled to be ready-for-service (RFS) in the first quarter of 2018.

It was noted that SeaX-1 is fully funded and has obtained the necessary licenses to operate submarine and terrestrial cable systems within the territories of Singapore, Indonesia and Malaysia.

  • Huawei Marine announced in September 2016 that it had been selected by Super Sea Cable Networks to deploy the 250 km SeaX-1 subsea cable.

Telco Systems and Advantech deliver open vCPE solution for SMB market

Telco Systems, a BATM Advanced Communications company and provider of CE 2.0, MPLS, IP, SDN/NFV solutions, and the Networks & Communications Group within Advantech have jointly announced a partnership to deliver an open vCPE solution designed to enable VNF services using cost optimised hardware.

The partnership between Telco Systems and Advantech is intended to facilitate the rapid deployment of Telco Systems' NFVTime open vCPE solution across a range of Advantech white box appliances. The NFVTime suite offers a service-ready, plug-and-play vCPE solution that integrates white box hardware, NFVi-OS and a VNF portfolio that can be centrally managed and orchestrated.

The combined offering is based on:

1.         Telco Systems' NFVTime solution, designed to allow telcos and managed service providers to flexibly deploy any VNF service, including SD-WAN, vRouter, vFirewall, vProbe and vSecurity, remotely, as and when required with zero touch provisioning.

2.         Advantech's FWA-1010VC white box vCPE appliance, which is based on Intel Atom architecture, or for demanding on-premises workloads, the FWA-3260 appliance with Intel Xeon Processor D-1500 to provide greater processing headroom, additional encryption offload and higher network throughput.

In addition, the NFVTime solution features a range of LTE, WiFi, LAN and WAN connectivity to help simplify product deployments by leveraging the infrastructure available in a particular location.

The companies stated that by deploying the joint, open vCPE solution on high performance, cost optimised white box appliances, telcos and managed service providers can efficiently expand vCPE-based NFV services targeting small-to-medium sized business (SMB) customers.

  • Recently, Telco Systems and Silver Peak, a provider of broadband and hybrid WAN solutions, unveiled an open vCPE solution for managed SD-WAN services. The joint solution integrates the Silver Peak Unity EdgeConnectSP virtual SD-WAN solution with Telco Systems' Verge platform, an open, service-ready vCPE based on x86 hardware platforms and part of its NFVTime suite.]

Global Capacity expands 7 One Marketplace Ethernet access points

Global Capacity, the provider of connectivity as-a-service based on its One Marketplace platform, announced the expansion of seven One Marketplace points of presence (PoPs) in its North American network, including six Ethernet local access aggregation points and three high performance Ethernet Backbone points designed to support demanding cloud, over-the-top applications and data services.

The new locations that have been Ethernet-enabled include Pittsburgh and Philadelphia, Minneapolis, plus three new PoPs in Boston, Kansas City, Missouri and Vienna, Virginia, while locations added to the Ethernet backbone include Kansas City, Missouri, Minneapolis and Toronto, Ontario in Canada.

These key aggregation points support the provision of diverse route options, more competitive pricing and a selection of network access services for One Marketplace customers. Global Capacity noted that Ethernet is the technology of choice for SD-WAN, hybrid WAN and cloud connectivity, and the demand for these enterprise services is driving the continuing expansion and investment in its network.

Earlier in 2017, Global Capacity announced the expansion of its national Ethernet service, strengthening its position as a major provider of Ethernet over Copper (EoC) solutions in the U.S. The investment in CO facility equipment enables the company to use existing copper infrastructure to deliver from 1 up to 100 Mbit/s access to customers and address growing demand for hybrid and SD-WAN network solutions. Global Capacity expanded its Ethernet services footprint in 264 cities across 36 metro markets in 20 states.

Global Capacity announced in April a partnership with VeloCloud Networks, the Cloud-Delivered SD-WAN company, to enable the delivery of managed SD-WAN services, expanding its global enterprise networking portfolio with new software defined services.

Earlier this year, Global Capacity launched Ethernet Multi-Cloud Connect service, a virtual network service based on its One Marketplace software-defined platform that allows enterprises to build multiple cloud services from a single port to access hybrid and multi-cloud solutions across multiple locations.

Jack Lodge, president of Global Capacity, noted with regards to the latest expansion, "Last year, Global Capacity achieved 37% growth in installed Ethernet revenue driven by cloud and data centre connectivity, and the higher traffic needs of the data-driven society… Global Capacity will continue to invest in the One Marketplace network… (to) connect business locations in more markets to key destinations over greater bandwidth and high performance Ethernet".

LightCounting expects Ethernet transceivers to drive silicon photonics market

LightCounting, in a research note on the silicon photonics (SiP) market, has reiterated its forecast for the product segment based on updated projections for sales of Ethernet and DWDM transceivers, specifically finding that while the share of SiP products in the total market has not changed significantly the product mix has, and noting that the success of SiP will be more dependent on Ethernet transceivers and less on DWDM modules.

LightCounting notes that projection for sales of active optical cables (AOCs) and embedded optical modules (EOMs) have not changed since its AOC-EOM report of December 2016, with demand for AOCs in early 2017 consistent with forecasts, although stating that the EOM market was very slow in the first quarter. However, it expects Intel to start shipping SiP-based EOMs in 2018 to support its latest supercomputer project.

The research firm notes that EOMs and co-packaged optics/ASICs were key topics at OFC 2017. In particular, supporting its long term forecast for SiP-based EOMs LightCounting cites Ayar Labs, which announced its first product - SiP-based EOMs – designed to sit adjacent to complex ASICs to enable connectivity with network interface cards. The first chip is designed to support 3.2 Tbit/s of capacity. Such SiP-based solutions are able to operate at the high temperatures required for EOM applications.

In terms of optical transceiver technology, LightCounting reports that in 2016 the market of over $6 billion was largely made up of InP devices, split roughly equally between discrete and integrated InP products and accounting for around $4.5 billion of the total. The SiP market segment accounted for around $500 million, with the remainder accounted for by integrated and discrete GaAs devices.

In 2017, the SiP-based optical transceiver market is forecast to rise to around $700 million, in a total market of approximately $7 billion, growing to just over $1 billion in 2019 and around $2.2 billion by 2022, when the total optical transceiver market will reach around $11.5 billion.

LightCounting observes that while SiP technology has been proven in terms of technical performance, it remains to be seen whether it can help the optical components industry move towards sustainable profitability.

The research firm notes that in this context the performance of Acacia has been encouraging, although the company's products are neither high volume nor low cost. In addition Luxtera, whilst a privately held company, is believed to have had a good 2016 and likely gaining share in the PSM4 segment based on the first quarter earnings report of Applied Optoelectronics.

China telecoms market update - Part 2

Fixed broadband subscribers for March 2017 (millions):

Total subs Added March Total '16 March vs trend
China Mobile 85.681         2.411   22.595 Above average
China Unicom 76.589             0.357   2.906   Above average
China Telecom 125.82           0.970   10.590 Average
Total 288.352           3.738   36.091 Above average

Comment on the above

There is nothing exceptional about these monthly numbers, although its worth noting that China Mobile, a very late official entrant to this market, only reporting its first surprisingly large international numbers in February 2016, is now well past China Unicom and with around 30% actual fixed broadband market share is also taking almost two thirds of month to month market growth. As a result, its market share is growing steadily each month by about 0.35 points. Also, at the present rate of comparative growth China Mobile could possibly overtake China Telecom in the next three years or so to become the largest fixed-broadband operator. Given China Mobile is already by far China's largest mobile broadband operator it is still difficult to understand what MIIT's plans are for an industry so increasingly dominated by one company. As things stand it would seem logical to merge Unicom and Telecom, which have never really overcome their historic regional bias, and hand out another couple of converged licenses to some of the more successful MVNOs.

The FTTH market

The numbers for this market are not in general publicly reported by the three big operators, though numbers do slip out from time to time. Possibly they report them to MIIT, at least it would be surprising if they did not. On April 18th Digitimes Research reported that, in line with the Chinese government's Broadband China Policy of 2013, and helped by China Mobile's involvement in the fixed-line market, fibre infrastructure has been 'quickly established', and claimed that at the end of 2016 the number of FTTH subscribers in China had increased to 227.7 million, of which 61 million lived in rural areas. Digitimes also claimed 77.8% had download speeds of 20 Mbit/s and above. However, according to the report the number of xDSL subscribers shrank to 19.8 million at the end of 2016, decreasing 60.6% year on year.

It should be noted that Digitimes is normally a quality source of information, mostly about Taiwanese companies, but usually also heavily involved in China. However, this report claimed that the 227.7 million FTTH subscribers accounted for 76.6% of all fixed-line broadband Internet subscribers, which implies that the number of fixed-line broadband subscribers in China at the end of 2016 was 297.26 million. Based on the above official numbers, this seems to be roughly 20 million too high. Digitimes has access to the operator numbers so the implication is that for some reason they are adding estimates for one or more other operators. One possibility is that Digitimes knows or believes that the China Mobile numbers do not include the broadband subscribers of the one time railway operator TieTong.

Although it was reported in November 2015 that China Mobile had agreed a RMB 31.9 billion deal to acquire fixed broadband provider TieTong from China Mobile sister company CMCC it is possible that that consolidation has not yet been fully completed. Moreover, given the size and complexity of China and the power of some of the provinces there may still be a few small local telcos that have maintained an independent existence. Some of the many provincial cable companies, nominally consolidated at national level but still in many cases rather independent, may also serve some customers with fibre. It also seems likely that huge corporations like State Grid Corporation of China also run some internal broadband operations and in any case SGCC has certainly dabbled in the FTTH market in the past, though to what actual level remains unclear.

TenPay online mobile payments system gaining very rapidly on AliPay

In early April 2017 estimates by Analysys of vendor market shares of the huge Chinese online third party mobile payments market for Q4 2016, valued at around RMB 12.8 trillion ($1.741 trillion), up 41.7% Q/Q and 126% YoY, showed Tencent's payment system, TenPay, continuing to gain ground steadily on the market leader AlIPay, a subsidiary of Alibaba. The other more than a dozen payment operators, including ApplePay, averaged less than 1% market share each. Despite a year on year loss of almost 17 points from 71% in Q4 2015, Alipay, remained the market leader in this market with a 54.1% share in Q4 2016, followed by TenPay (including WeChat Payment and QQ Wallet), on 37.02%, with the third-ranked player Yiqianbao on 2.19% and the rest on 1% or less.

According to analysts, TenPay has benefited from the huge 890 million user base of its market leading WeChat social media platform and also since 2014 has successfully targeted China's 'hongbao', or red envelope tradition during the Chinese New Year with reportedly 32 billion virtual red envelopes handled online in 2016,

(NB: the Chinese mobile payment market for 2016 is estimated at $5.5 trillion, or around 50 times the estimated $112 billion for the U.S.)

Top 3 Chinese smartphone vendors in Q1 show 3.7 point market share gain

According to IDC estimates of the size, growth rate and vendor structure of the global smartphone market in Q1 2017, the top three Chinese suppliers - Huawei, Oppo and Vivo - were collectively up 3.7 points in market share year on year to reach a collective 22.40%, while Samsung lost a percentage point from 23.80% and Apple lost 0.5 points from 15.4%. While the market grew an unexpected 4.3% to 347.4 million units the net result of market growth and share decline for the two leaders was that both Samsung and Apple shipments were virtually static year on year at 79.2 million and around 51 million, respectively.

Meanwhile, Huawei grew 1.4 points year on year in share from 8.4% to 9.8% and 22% in unit shipments. While very impressive for a company which has only been seriously in the market since 2011 there are two points that should worry Huawei about these numbers given its clearly stated outrageous ambitions to be the global market leader. The first is that even if Huawei could continue to gain 1.4 points a year, which seems unlikely, it would still take about a decade to overtake the leader Samsung. Secondly, and in some ways more worrying, is given that in almost all the many markets it has entered Huawei is accustomed to being by far the most aggressive competitor, Oppo, whose market share was also up 1.4 points YoY from 5.9% to 7.4%, is growing at least as strongly as Huawei and that is an unusual environment for Huawei. However, according to a Fortune article of January 24th, Richard Yu, head of Huawei's Consumer Group said in November that he expected to overtake Apple in unit market share sometime in 2018. Vivo, meanwhile grew market share much more slowly than Huawei or Oppo, from 4.4% to 5.2%.

China Mobile, Enea, Cavium and ARM to collaborate in validating NFV test cases

On May 2nd it was announced that China Mobile, real-time OS developer Enea of Sweden, ARM of the UK and Cavium of San Jose, a supplier of ARM- and MIPS-based processors, had signed a collaborative agreement whereby Enea's open OPNFV-based commercial core platform (based on OpenStack), ARM's 64-bit processor and Cavium's ThunderX workload-optimised data-centre server processors would be used in China Mobile's Open NFV Testlab as part of its Telecom Integrated Cloud program. The program is designed to validate a variety of NFV tests cases, such as vCPE, vBRAS, vEPC and vIMS, and support Open Network Automation Platform project development and integration.

In relation to the above announcement, in 2015 Wind River, a supplier of software for intelligent connected systems, and China Mobile said they had joined forces on multiple NFV projects including a new NFV test lab as well as the development of virtualised small cell gateway and cloud radio access network (C-RAN) solutions. Also, in January 2016 the OpenStack Foundation published a press release in support of the report Accelerating NFV Delivery with OpenStack on the adoption and business cases driving NFV deployment at leading telecom providers. It claimed that OpenStack was the platform of choice for NFV deployment and noted that AT&T, Bloomberg, China Mobile, Deutsche Telekom, NTT Group, SK Telekom and Verizon were among the organisations documented using OpenStack and NFV.

In addition, in June 2016 Nokia and China Mobile announced the signing of a one-year, Euro 1.36 billion frame agreement for Nokia to provide China Mobile with cloud services, mobile, fixed, IP routing, optical transport and customer experience management technology, as well as support and global services during 2016.

New York's Cleareon launches service assurance monitoring solution

Cleareon, a New York City-based provider of network solutions for wireless and wireline carriers, service providers and large enterprises, announced the launch of its new Service Assurance Monitoring and Reporting platform, which allows customers to monitor circuit performance against historical baselines and service level metrics.

Cleareon's new service assurance solution monitors end-to-end circuit performance, as well as the business services and SLA compliance guarantees associated with those circuits, and is specifically designed to:

1. Exceed the requirements of wireless providers with demanding performance expectations for monitoring jitter, packet loss and latency.

2.  Provide granular performance data for Ethernet circuits.

3.   Allow straightforward integration into customer applications via compatibility with APIs.

4.  Deliver reporting for more than 110 different KPIs.

In October 2016 Cleareon announced the acquisition of Pangaea Networks based in Glen Rock, New Jersey, a provider of metro Ethernet services to carriers, service providers and enterprises throughout the New York metro and tri-state region. The combination was intended to create a provider able to deliver a full range of fibre, Ethernet and wavelength services for carriers and large enterprise customers.

Also in October, Cleareon announced service-ready status across its PoPs in New York City and New Jersey, having established a number of new PoPs in New York during the year. In conjunction with the announcement, Cleareon launched a 10 Gigabit Ethernet ring service, PANMetro, enabling dedicated local access for customers.

Commenting on the service assurance offering, Cliff Kane, co-CEO of Cleareon, said, "In complex environments where multiple networks are stitched together to provide the end-user solution, customers need more than a technology view of the network… the Service Assurance portal has dynamic data aggregation and reporting capabilities that enable customers to correlate key network performance data to provide a service-focused view… and organise KPI data and manage it against SLA thresholds for each circuit".