Telecom Timeout

A blog

February 5, 2009  10:27 PM

Alcatel-Lucent’s earnings: Moving to half-full

Posted by: KateGerwig
Alcatel-Lucent, broadband, equipment vendors, IP, Next Generation Networks, telephone equipment, wireless broadband

It’s much harder to see the glass as half-full when you’re used to half-empty — or completely empty. Enter Alcatel-Lucent’s 2008 year-end financial results and its $6.2 billion loss. So it may not sound like it at first, but there’s something in that glass, and CEO Ben Verwaayen, who took the top post in September 2008, is starting to hear the Perrier fizz.

Alcatel-Lucent stock went up after the Q4 ’08 earnings report (released Feb. 4) -– which isn’t easy to do this year. The new chief sees positive signs in things like cash flow being at its highest level in two years, as he explained his view of the company in a BusinessWeek interview. The company plans to make good on promises made last December to reorganize and refocus its strategy, and that means less emphasis on traditional products (read telephone switching equipment).

Verwaayen is shifting the company’s focus to services and Internet-related technologies, while placing less emphasis on traditional products like telephone-switching equipment. The analyst community sees Alcatel-Lucent as doing what it promised.

As part of its new strategy, Alcatel-lucent isn’t trying to do everything itself. To address certain hardware maintenance and expense, Verwaayen said the company may outsource legacy equipment servicing to established vendors that could “co-partner” with Alcatel-Lucent.

And to gain some nimble startup advantages — which is like turning the Titanic for a company the size of Alcatel-Lucent — Verwaayen said the company has asked its Bell Labs research division and its carrier product group to keep an eye out for innovative startups and work with them.

In December, Verwaayen said Alcatel-Lucent would focus on four broad areas in 2009: IP, optical, fixed-line broadband and mobile broadband (particularly Long-Term Evolution, or LTE).

In terms of strategy and services, Tom Nolle’s commentary, Telecom operators need vendor help to justify new investment benefits, discusses how Alcatel-Lucent is one of the main vendors that could help service providers sort out their next-generation network architectures. But only if it can get out of its own way and move forward with the new strategy.

February 5, 2009  3:22 PM

Sorry, Verizon: No 700 Mhz spectrum for you til June

Posted by: WPeterson
digital TV, Obama, policy, Verizon

It looks like our resident telecom guru Tom Nolle, who runs our sister blog Uncommon Wisdom, was right again: The House finally went along with the Senate on the second time around, passing a delay to the digital TV transition 264 to 158 and keeping winnners of the 700 Mhz auction from fully tapping their lucre — for now.

But as we examined earlier in the week, the digital TV delay won’t hurt too many telecoms hoping to capitalize on the spectrum:

… LTE is highly unlikely to be deployed within four months, and an agreement to a short delay may avoid some nasty political and public relations fallout.

“The people who bid on and won the auctions are anxious to start exploiting what they purchased,” Nolle said. “But truth be told, if there were a four-month delay in the spectrum, the effect is more psychological and financial than it is tangible.”

The deeper implications of a delay may be for smaller regional or niche media carriers that purchased a portion of the spectrum — and those that will compete against them.

“If you bought rights to get any of the spectrum that is being vacated, the delay isn’t a good thing,” said Stephen Blum, president of telecommunications consultancy Tellus Venture Associates. “If you don’t own any of that spectrum, [and] your competitors are being delayed, in the short term that’s a good thing.”

Still, if after an estimated $1 billion information campaign and numerous delays, are some people ever going to get the message?

Read more about the digital TV delay at Reuters.

February 4, 2009  4:42 PM

The ultimate telecom Valentine?

Posted by: WPeterson
Cisco, mobile backhaul, Valentine's Day, YouTube

Amy Kucharik from sister blog Network Hub sent along some Valentine’s Day gift advice from Cisco. We won’t ruin the surprise, but it sure has put my shopping-phobic heart at ease:[kml_flashembed movie="" width="425" height="350" wmode="transparent" /]

February 4, 2009  3:31 PM

Telecom Timeout: Episode 2 — Quarterly Reports

Posted by: WPeterson
AT&T, telecom timeout, Verizon, video update

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January 26, 2009  6:33 PM

Sprint employees: Can you hear your jobs drop?

Posted by: KateGerwig

Sprint came out with it on Monday, not that anyone was surprised: 8,000 jobs on the chopping block; suspended 401k matching; salary freezes for the second year in a row. The cuts are supposed to be less drastic in locations where employees deal with actual customers, Sprint said, which is awfully nice for actual remaining customers who actually want to talk to someone at Sprint.

There have been cuts for the last couple of years at struggling Sprint, as chronicled in a timeline appearing in Sprint’s hometown Kansas City Business Journal

Besides the economy, another reason for the layoffs is that CEO Dan Hesse wants to make his struggling company more competitive with AT&T and Verizon. As soon as The Wall Street Journal’s Marketwatch put it out there that Sprint is the latest telecom service provider to announce job cuts –users jumped on the comment bandwagon immediately. Many took the opportunity to bash the company, saying that Sprint was in trouble even before it merged with Nextel.

On the subject of Nextel, CIMI Corp. President Tom Nolle says Sprint should have benefited from a national trend to shift to mobile devices, but it got carried away with the Nextel merger instead and didn’t move quickly enough. “Sprint is working through its WiMax strategy, but again, it may be late,” Nolle told us, and the economic downturn may hurt the provider by slowing both adoption and its ability to sustain a fast roll-out of service. Find more of Nolle’s thoughts on Uncommon Wisdom, our sister blog.

January 26, 2009  6:15 PM

Nortel Customers: So what do you want to do?

Posted by: WPeterson
Extreme Networks, Metro Ethernet, mixed movie metaphors, Nortel

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“Things are right dead all over” — Vulture from Disney’s The Jungle Book

Nortel Networks hasn’t made its groundbreaking (or hopefully at least ground shaking?) reorganization announcement yet, so breathing room is still tight for the beleaguered Canadian telecom equipment manufacturer, and the vultures are still circling.

In addition to the F5 buyback program we reported earlier, Extreme Networks is licking its chops at the thought of gobbling up some Metro Ethernet market share. Peter Lunk, senior director for Extreme’s Service Provider Marketing, gave us this statement:

We believe Nortel’s Metro Ethernet Networks (MEN) division contains competitive products and significant intellectual property, and as a result it could be sold as part of the larger Nortel restructuring. The key asset in the division is likely the optical group, which has made good progress on 40G and 100G WDM systems.

Ever since the MEN was reported as up for sale in September, Extreme has seen Nortel’s Ethernet switching customers start to evaluate alternative vendors given the uncertainty around the future of the NT product line. These Service Providers are looking for Ethernet to support the build-out of their Carrier Ethernet service offerings, including business services consisting of Ethernet VPNs and wireless Ethernet backhaul.

This provides a great opportunity for Extreme Networks as we continue to invest in this market segment and provide these service providers a migration path that does not require a change in their network architecture.

Circling indeed, but now it seems the only people asking each other “What do you want to do?” are Nortel’s customers, which have assurances of continued equipment manufacturing but are still left in a bit of a lurch while Nortel takes the next 80 or so days to sit and strategize under the watchful eyes of its creditors.

January 26, 2009  2:15 AM

Cyber-security policy locks down lobbyist job security

Posted by: KateGerwig
cyber security, Obama Administration, regulations, Security, Telecom

President Barack Obama promised a bipartisan effort, and in terms of his cyber-security strategy, so far the plan looks remarkably like the 2008 plan recommended by a bipartisan group of computer security experts. The focus is to protect U.S. networks from cyber attack and to increase investment and research on cyber security.

You know that means network regulation to combat cyber crime and increase computer network security, among other things. The new Administration wants to partner with industry to secure personal data stored on government and private systems, with a standard that secures data across industries.

The new Administration’s cyber-security plan hit the website as part of a policy document on homeland security. It’s reassuring to know that the first Blackberry-carrying president believes cyber infrastructure is a strategic asset and may create a national cyber advisor who will report directly to him (hopefully in person, since cyber-impersonation is easier than anyone wants to think, according to security expert Bruce Schneier in his Crypto-Gram newsletter).

What else? The Administration wants to work with industry and academia to develop and deploy a new generation of secure hardware and software, work with the private sector to establish tough standards for cyber security and physical resilience, and a number of additional business and personal security.

Telecom industry lobbyists are no doubt loading their briefcases to make the case for what they want, as well as what they can live with. Stay tuned.

January 23, 2009  8:01 PM

VZW fires second salvo at home market: The Verizon Hub

Posted by: WPeterson

Not a day goes by that I don’t wish my landlines — both in office and at home — could do half as much as my BlackBerry Curve, or even do any of the variety of fantastic tasks that your basic feature phones breeze through. Why do I still have to dial digits to call someone? What is this, the 20th century?

Hot on the heels of the leaked information that Verizon’s launching a home femtocell service, Verizon formally announced another dig at traditional landline providers, including their own pseudo-parent company Verizon, with the launch of the Verizon Hub.

The Verizon Hub hopes to be a house superphone, connecting to a broadband Internet connection to bypass landline fees while tying the user experience closely with what they’re used to from the Verizon Wireless phones, including services such as VZ Navigator, Chaperone, text, picture and video messaging, and even access to Verizon’s multimedia V CAST offerings.

See the full official press release after the jump.
Continued »

January 21, 2009  10:04 PM

Reports: Verizon Wireless launching femtocells later this month

Posted by: WPeterson
femtocells, Telecom, Verizon

Reports have begun surfacing that Verizon will launch a femtocell service later this month, with units retailing for roughly between $200 and $250.

As Engadget reports:

The little black box will puke out a cloud of CDMA covering up to 5,000 square feet of domicile with support for up to three simultaneous calls — enough for you, the hubby / missus, and little Joey / Susie to all be yapping away at the same time. Like Sprint’s solution, the Wireless Network Extender uses GPS to verify that you’re not creating little tiny Verizon networks in Laos, Kenya, or Uruguay and plugs into the internet source of your choice via Ethernet.

But Ars Technica reports that Gizmodo, Engadget, and others may have misunderstood the GPS unit’s purpose:

Gizmodo and its commenters appear to have mistaken the purpose of including a GPS in both this model coming out from Verizon and Sprint’s Airave. The CDMA network protocol that both cellular carriers use requires a GPS signal for each base station as part of network timing.

It’s unclear how critical GPS reception is to the femtocell, given that a poor cellular signal and poor GPS reception would seem to go hand in hand. But the included 23-foot “external GPS antenna and antenna cable” might provide some clue.

Either way, not a whole lot of details were forthcoming about the plan, but Verizon is playing catchup with Sprint, whose own femtocell project was launched last year.

January 19, 2009  6:21 PM

Mobile’s “Perfect Storm”: Mandated upgrade vs. the economy

Posted by: KateGerwig
mobile operators, network upgrade, recession, wireless broadband

Infonetics Research’s latest whitepaper looks at the “perfect storm” that is forcing mobile operators to upgrade their networks and their business models, even if economic conditions would normally dictate otherwise, and offers strategies to cope with the changes (but you’ll have to download the whitepaper for those).

This free whitepaper download on the Mobile Internet Transformation looks at the four mobile broadband trends that are presenting as many problems as they are opportunities for operators.

So what’s driving the 400%-to-800% year-over-year traffic increases in some locations?:

  • Rapid growth in high-speed mobile broadband services based on HSPA, EV-DO and WiMax
  • The proliferation of devices that eat bandwidth, including a new generation of smartphones
  • Web 2.0 applications that have transitioned to the wired world (think Google Maps and YouTube)
  • Flat-rate data plans from mobile operators that have speeded consumption of mobile data. Added issue? Unlimited plans spur the need for solutions that help operators deploy and monetize differentiated, premium services.
  • The bottom line? Waiting out the recession could result in the “Perfect Disaster.”

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