Telecom Timeout


November 16, 2009  6:07 PM

Want to get married in Vegas? There’s an app for that, says NSN

Jessica Scarpati Jessica Scarpati Profile: Jessica Scarpati

We’re hearing a lot these days about how carriers are seeing their average revenue per user (ARPU) go down with the advent of unlimited voice and data plans, so they will have to make their money partnering with developers of smartphone applications or themselves offer integrated services.

At SuperCOMM 09, I heard from Michael Mullineaux, marketing manager at Nokia Siemens Networks, who demonstrated an application that would combine location with e-commerce and book an evening in Las Vegas from a mobile device.

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November 5, 2009  7:33 PM

Trouble in paradise: Amazon dumps Sprint for Kindle, falls into the arms of AT&T

Jessica Scarpati Jessica Scarpati Profile: Jessica Scarpati

Ah, young love. When Amazon launched the Kindle almost two years ago, the company proposed to Sprint Nextel Corporation: Support us! The wireless carrier accepted. They took the solemn vow to be partners in sickness and in health, in good times and in bad.

Although the Kindle was earning Sprint only $2 ARPU, the carrier was still reaping huge profit margins as Amazon picked up most of the operational costs.

But they say one in two marriages end in divorce, right? This couple is no exception. Amazon Kindle Director Russell Baker confirmed Amazon is dumping Sprint for AT&T so that it can support international users, according to FierceWireless.

“Sprint’s network uses CDMA technology, while AT&T’s uses the much more widespread GSM technology … Amazon’s decision to drop the CDMA Kindle is a blow to Sprint, which in the first quarter of the year touted its sales of the Amazon Kindle e-reader device as driving the majority of its 394,000 wholesale additions.”

No word from Sprint yet on this. We hope they’re not drowning their sorrows in a gallon of Edy’s, as we’re prone to do after a bad breakup.

UPDATE: Sprint spokeswoman Stephanie Greenwood responds.

The Kindle DX operates on the Sprint mobile broadband network, so Kindles currently in use or already in the sales pipeline will still be powered by Sprint. Sprint has enjoyed a long and successful relationship with Amazon—since the Kindle first launched. We understand their international strategy and look forward to working with them on future projects.


November 5, 2009  6:51 PM

Video: Service providers don’t have to be swept away by IP tsunami

Jessica Scarpati Jessica Scarpati Profile: Jessica Scarpati

While tongues were wagging at Supercomm 2009 about and upcoming decision from the FCC on net neutrality, I took some time to sit down and learn more about the long-term challenges telecom operators are facing over the next year.

Brian Wood, vice president of marketing for Continuous Computing, a San Diego-based component manufacturer for network equipment providers, laid out the road ahead from where he sees it.

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October 27, 2009  7:40 PM

Nortel loses another arm as Hitachi steps in for LTE bits

Ddevine Dan Devine Profile: Ddevine

Continuing its bankruptcy-ignited fire sale, Nortel announced that it has struck a deal with Tokyo-based electronics heavyweight Hitachi to part with a piece of its Long-Term Evolution (LTE) business — specifically, “certain assets associated with the development of next generation packet core network components,” according to a press release — for $10 million. Not that it’s trying to be cryptic or anything.

Of course, Hitachi will face lots of LTE competition from other vendors. Despite that, the insolvent Toronto-based vendor said:

Under the agreement, the assets include software to support the transfer of data over existing wireless networks and the next generation of wireless communications technology, including relevant non-patent intellectual property, equipment and other related tangible assets, as well as a non-exclusive license of certain relevant patents and other intellectual property.

Nortel said the agreement excludes legacy packet core components for its global system for mobile communications (GSM) and universal mobile telecommunications system (UMTS) businesses. Its GSM and GSM-Railway businesses are slated for an open auction on Nov. 9.

While Monday’s announcement did drop some new information on the asset front, the song remained the same for Nortel’s embattled shareholders.


October 26, 2009  7:17 PM

FairPoint falls to bankruptcy, forks over ownership to lenders

Jessica Scarpati Jessica Scarpati Profile: Jessica Scarpati

Northern New England telecom operator FairPoint Communications filed for Chapter 11 bankruptcy protection, promising to cut $1.7 billion in debt by converting much of it into equity, essentially giving its lenders ownership of the company.

The move comes “barely 18 months after becoming northern New England’s dominant telecommunications company, fulfilling critics’ predictions that the company wasn’t up to the task,” the Associated Press reported.

FairPoint also just invested $85 million in 368 miles of fiber into its core network across Maine, New Hampshire and Vermont. Ouch. I imagine they feel a little like I did after shelling out for a new radiator on my car, only to find there was a transmission leak a month later — but they’re probably much, much more irritated, huh?

The Charlotte, N.C.,-based carrier is best known for its operations in Maine, New Hampshire and Vermont, where it bought Verizon’s wire lines and Internet network for $2.3 billion in 2008. FairPoint sells wire line, broadband, data, Internet and TV in 18 states. The provider also just invested $85 million in 368 miles of fiber into its core network across Maine, New Hampshire and Vermont.

According to the AP, FairPoint has struggled “under a large debt and falling revenues, as well as customer-service, billing and other problems since switching over to its own computer systems in northern New England nine months ago.”

As expected, the company is promising the fallout won’t affect company operations or customer services. Uh-huh.

“The day-to-day operations of our business will not be impacted by today’s actions,” said FairPoint CEO David Hauser. “We want to assure our customers, employees and vendors that we remain committed to continuing to provide reliable, uninterrupted service to all of our customers. Today’s actions represent a critical and positive step in our efforts to reduce our indebtedness, strengthen our financial condition and position FairPoint to compete more effectively in a dynamic marketplace.”


October 22, 2009  10:51 PM

Huawei and mobile infrastructure: Taking on the heavies

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

Didn’t we discuss Huawei just last week in the optical arena? Yes we did. Now everybody’s talking Huawei in mobile infrastructure, and not just as the low-cost Chinese telecom equipment purveyor category. Huawei did its time as the low-priced spread, and now grudging respect, even fear among competitors is growing.

The most recent Infonetics Research report on mobile and LTE equipment asked service provider decision-makers in Europe, the Middle East and Africa (EMEA) and Asia-Pac what criteria they use when choosing a mobile infrastructure vendor. The bottom line is that Huawei is on everyone’s radar for good technology and good value for the price, and ZTE is on the rise, too, according to Stephane Teral, Infonetics principal analyst for mobile and FMC.

Infonetics notes that Huawei is overtaking Alcatel-Lucent on many fronts and is nipping at Nokia Siemens Networks’ market position in the mobile infrastructure space. It’s true, however, that the service providers all named NSN in their top three mobile infrastructure vendor lists, and that Ericsson got the highest ratings for service and support (nice news for two vendors that had disastrous quarters).


October 22, 2009  1:30 PM

Verizon CEO comes out swinging against net neutrality

Jessica Scarpati Jessica Scarpati Profile: Jessica Scarpati

I gotta say, any trade show that opens the ceremonies with some trash talkin’ has my attention.

After giving up a little hip-hip-hooray for Verizon’s long-awaited 4G network (ready for 60 devices thus far and expected to be in 25-30 markets next year) at the opening keynote of SuperCOMM 2009 on Wednesday in Chicago, CEO Ivan Seidenberg shelved his warm and fuzzy feelings there.

The Federal Communications Commission was on the cusp of releasing its proposed net neutrality regulations — a hard sell for the SuperCOMM crowd, to say the least.  Seidenberg pretty much stopped short of calling the net neutrality proponents (and their sympathizers on the FCC) lefty wingbat commies.

“If this burdensome regime of net regulation is imposed on all parts of the Internet industry, it will inject an extraordinary amount of bureaucratic oversight into the economy’s main growth engine for the future,” he said.

Seidenberg said his main beef with net neutrality proponents was their suggestion “that network providers like Verizon and applications providers like Google, Amazon and others occupy fundamentally different parts of the Internet ecosystem — a binary world of ‘dumb pipes’ on the one hand and ‘smart applications’ on the other.”

Verizon Wireless and Google — who has been at the front of Team Net Neutrality — are partnering to release a smartphone that runs on Google’s Android system.

“This is a mistake, pure and simple: an analog idea in a digital universe,” he said. “We can’t create smart economy by dumbing down our critical infrastructure.”


October 20, 2009  9:31 PM

Apple’s record-setting quarter and what it means for telecom

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

Telecom is a hard-knock life sometimes, like this week when Apple announced its most profitable quarter EVER. No small part of that smashing success is the 7.4 million iPhones sold in the quarter. Of course, in the U.S., AT&T benefits from those new iPhone users since they use AT&T’s 3G wireless network.

And then there’s Google. Last week the Android-backing company also crowed about increasing its net profit for the third quarter, declaring the recession almost over.

Meanwhile back at the network, while things are looking up, those in traditional telecom circles are talking about how to stem plummeting cost per bit and wondering if they can make a buck deploying 4G LTE networks.

So what does all of this iPhone success mean for wireless operators? For starters, Verizon hasn’t negotiated to also sell the iPhone, apparently, because its new ads are promoting the “Droid,” an Android 2.0 phone that may be supplied by Motorola (one of the Android mobile operating system’s original backers). And so we may be in for a new season of handset wars, which can be dangerous business, according to our telecom guru Tom Nolle. The weakness with the iPhone is the stress it’s putting on AT&T’s 3G network, Nolle reminded us. When Verizon moves to 4G LTE and introduces the Droid, both Apple and AT&T could face more heat.


October 15, 2009  4:09 PM

Alcatel-Lucent ranks high in optical survey; Huawei and Nortel make surprising showings

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

Alcatel-Lucent may be the leader in the optical equipment market, according to a new Infonetics Research optical equipment survey, but its pricing is a bit much for the service provider purchasing decision-makers asked for their opinions.

Representing major market change, Huawei stood out in open-ended questions about leading optical equipment vendors in the Optical Equipment Vendor Ratings: Global Service Provider Survey. Andrew Schmitt, directing analyst for optical at Infonetics, was surprising because most of the carriers interviewed are based in North America and EMEA where Huawei has little presence, he said. Huawei kept packing on surprises, particularly by receiving the third-highest average rating for service and support, which Schmitt said is usually Huawei’s weakness.

Then in the ironic results category, Nortel came out as the top vendor in an open-ended question about 40G and 100G technology leaders – which will benefit Ciena or a vendor to be named later that wins Nortel’s optical equipment division.

The survey asked service providers which of eight optical equipment vendors they have installed and which ones they are evaluating for future purchases, which they consider the top optical equipment vendors, which they consider leaders in 40G and 100G technology, and their familiarity with and ratings of optical equipment vendors.

The usual suspects included in the survey included Alcatel-Lucent, Ciena, Cisco, Ericsson, Huawei, Nokia Siemens, Nortel and Tellabs. They were ranked on technology, product roadmap, security, management, price-to-performance ratio, pricing, financial stability, and service and support.

Other vendors recognized on the open-ended 40G and 100G technology list include ADVA, Infinera, Mintera, NEC and StrataLight/Opnext.


October 13, 2009  9:20 PM

Cisco to compete for 3G and 4G mobile multimedia delivery with Starent acquisition

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

Wall Street and the analyst community think Cisco’s acquisition of Starent Networks will be $2.9 billion well spent in order to seriously vie for 3G and 4G mobile gateway business from service providers delivering more and more multimedia traffic that needs to move from wireless networks to IP networks via someone’s packet gateway.

The packet gateway is Starent’s niche, and soon will be Cisco’s. Among the many takeaways from this announcement, other telecom equipment vendors must take serious note of Cisco’s focus on mobile. And in case there’s any confusion, that means Juniper, Alcatel-Lucent, Ericsson and Huawei, to name a few.

If all goes well, Starent will become Cisco’s official Mobile Internet Technology Group when the acquisition is completed in the first half of 2010. “Cisco is all about IP, but Cisco doesn’t have that kind of heritage on the mobility side. So this acquisition has a big upside,” said IDC Wireless and Mobile Infrastructure Research Manager Godfrey Chua. “This is the segment in the mobile infrastructure market that is growing faster than the others.”

A niche player but a survivor (through the dot-com and the telecom crashes from early in the decade), Starent already has marquis clients – including Verizon Wireless and Sprint, to name two big ones, and one assumes Cisco will inherit Starent’s client list.

Starent Networks enables wireless operators to deliver multimedia (data, video, wireless TV, games, etc.) on wireless devices. Starent’s technology is positioned to help operators deliver that content over 2.5, 3G and 4G networks. Starent’s role will be to play on Cisco’s video and IP strengths in mobile infrastructure solutions that will extend quality multimedia experiences to mobile subscribers on 3G and 4G networks.

“Starent already has a good client base in terms of service providers, so it gets Cisco into the mobility discussion more and paves the way for more discussions as more carriers look at LTE,” Chua said. “Now it will be natural to include Cisco at the table.”


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