Telecom Timeout


October 12, 2009  4:34 PM

New report declares WiMAX a “niche technology” in emerging markets

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

A couple of years ago, WiMAX was going to be the winner in emerging wireless broadband markets…so said the pundits. Now a new Ovum research report is relegating WiMAX to “niche” technology status. Why niche? Ovum analyst Angel Dobardziev says it’s a combination of technology cost, coverage, vendor support and service provider choices.

The key stumbling block is the cost of customer equipment, which will limit WiMAX use outside business customers, he said.

“WiMAX will play a role, but it will be a far smaller one than many WiMAX players would accept today, WiMAX will fall short of the grand hope of being a mass market broadband technology in emerging markets,” Dobardziev said, estimating that WiMAX will account for less than 5% of the 1.5 billion fixed and mobile broadband access connections in the emerging markets in 2014.

The original hope was that in areas with little existing infrastructure, WiMAX would be the logical Greenfield choice for wireless broadband, but Ovum questions whether there is a really big market for WiMAX in emerging markets. A full two-thirds of the world’s WiMAX networks will be in emerging markets in Africa, Asia, Eastern Europe, the Middle East and Latin America, but they will have low uptake, Dobardziev said.

“On a non-subsidized basis, it is currently priced and positioned as a broadband option only for businesses or wealthy consumers,” he said. “The cost of customer equipment (CE) remains the key stumbling block for WiMAX operators, where both DSL and HSPA outperform WiMAX with significantly greater economies of scale.”

October 9, 2009  1:32 PM

C-Level convergence: It’s getting lonelier at the top

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

We’ve talked and talked about it, and the convergence continues. High C-level positions are biting the dust or being combined with other high C-level positions. Next-gen industry change is finally moving up from the lower levels, the place where employees are used to reorg after reorg. We wonder if “rightsizing” feels any better at the top than it does at the bottom?

Verizon Communications is just one of many providers tweaking at the top. Verizon Chairman and CEO Ivan Seidenberg this week said Verizon is eliminating its chief operating officer (COO) position as part of a broader restructuring effort (and it has had many). Recently, BT got rid of its CTO position, and Global Crossing combined its CTO/CIO position into one powerful slot.

The bigger news is that Verizon’s consumer and business landline operations will now be in one big landline pot. Why now? Verizon said it wants to speed up the process of bringing products to market. Maybe. But it takes a lot of time to move a ship that big.

The lines between consumer and business divisions used to be hard and fast. Verizon Business was a combination platter of MCI’s and Verizon’s business customers, which in the old days a couple of years ago, would never be seen in public with the thin-margin consumer business. But landline services have been hit hard by the economy and wireless migration, and now they’re just plain old “landline.”


October 8, 2009  7:49 PM

Note from the ledge: Stop the change or I’ll…

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

Change has been the constant of the U.S. telecommunications industry for the past 20 years, which has made it a highly interesting yet volatile industry to belong to. Spinoffs, acquisitions, mergers, financial ruin, executives in handcuffs, reinvention, network changes, layoffs, “right sizing” and so on. So if you can’t handle change, the telecom industry isn’t for you.

Personally, when I’ve been one change over the line, I’ve threatened to throw myself out my first-story office window (the one with the sill 6 inches from the ground). People just laugh and tell me to go back to work, so I don’t even get to the taping a note to the glass.

Not so at France Telecom, where it seems the words suicide and telecom are inextricably linked. Workers and the public are in an uproar that working conditions – meaning reorganization and change – are driving stressed workers over the edge, literally. Harvard Business Publishing looked at this issue in Why are France Telecom workers committing suicide?

Maybe this is a case of extreme cultural differences. Years ago when the Bell companies started downsizing, employees who planned on being with the same company for their entire careers might have felt the same way. And at France Telecom, the public outcry is loud enough that the head of the company’s modernization program has resigned. Yet the deal for workers at France Telecom doesn’t sound nearly as dire as it does at other companies. Does it make sense that being faced with retraining to work in wireless rather than wireline could make someone suicidal? Is the mandatory 35 hours a week just too much? Maybe I’ve become so used to change that I no longer stop to smell the fiber optic cable.


October 7, 2009  5:24 PM

Nortel suitors off to the races: Ciena puts $521M stalking horse bid on optical/Carrier Ethernet biz

Jessica Scarpati Jessica Scarpati Profile: Jessica Scarpati

Well, Ciena, that didn’t take long.

One day you’re just flirting with “advanced discussions,” the next (OK, two days later) you’re talking about forking over $390 million in cash and 10 million shares of Ciena common stock for Nortel’s Optical Networking and Carrier Ethernet businesses. What happened to a little romance?

For those playing along at home, that’s an estimated $521 million for the all assets of the two business globally — including Nortel’s OME 6500, OM 5000, CPL platforms, 40G/100G technology and related service businesses — along with patents, intellectually property, customer contracts and “at least 2,000 employees.” (Does Ciena really want to double its headcount?)

Earlier this year, Extreme Networks was drooling over the same assets. Wonder where they are now?

Ciena’s stock price dropped on the initial acquisition news and has gone up a bit now that financial analysts are digesting the possibilities. Still, as happened in other Nortel auctions, we aren’t counting out the possibility that another optical vendor will come in with a higher bid.

Have another look at IDC analyst Eve Griliches’ take on the Nortel assets, and we’ll see who bids next.


October 5, 2009  7:30 PM

Ripped from the (Twitter) headlines: Ciena eyes Nortel optical/Carrier Ethernet biz

Jessica Scarpati Jessica Scarpati Profile: Jessica Scarpati

Ciena Corporation, a Maryland-based telecom equipment vendor, is chatting up bankrupt Nortel for its Optical Networking and Carrier Ethernet businesses, Nortel officials tweeted this afternoon.

Nortel Networks Corporation today confirmed that it is in advanced discussions with Ciena for the planned sale of substantially all assets within its Optical Networking and Carrier Ethernet businesses globally. The outcome of these discussions is uncertain and subject to negotiation of definitive agreements. Any agreements would be subject to a competitive bidding process to be approved by the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice.

The announcement comes as Nortel’s latest sale — to Avaya for its unified communications (UC) business — has hade barely any time to cool off…

Finally, Nortel has some advanced discussions going on for these units. Read IDC carrier infrastructure
Eve Griliches’ column
on why takers for Nortel’s assets have been few and far between. Maybe Alcatel-Lucent’s recent talk of converging network layers has made Nortel’s optical and Carrier Ethernet divisions a more appealing proposition for Ciena.


September 30, 2009  11:14 PM

Former BT CTO joins Huawei: Telecom equipment competitors take note

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

High-level executive moves are sometimes interesting a couple of seconds. But every once in a while, there’s a REALLY? moment. So it was with the announcement that former BT CTO Matt Bross has become the global CTO of Huawei, the Chinese telecom equipment vendor. At BT, Bross led the provider’s 21CN next-generation network program and had selected Huawei as a vendor partner.

Eyebrows were raised a few months ago when Bross left BT suddenly and wasn’t replaced – which led to speculation about the rising importance of the CIO over the CTO inside telecom operators now relying much more on software than network hardware.

Industry reverberations about the move don’t come from the fact that Bross has a job, but that he joined Huawei, the Chinese telecom equipment vendor driving hard price bargains and gaining market share from vendors like Cisco and Alcatel-Lucent. Four years ago, people had trouble pronouncing Huawei’s name. In August, Huawei won the T-Mobile LTE contract.

Word is that Bross will guide Huawei’s R&D efforts in terms of telecom network architecture. He will also help the vendor deliver products and solutions to North American customers, where Huawei currently has no major foothold. With his background, Bross could help Huawei become even more of a household name.


September 25, 2009  12:46 PM

Dell buys its way into professional services – at what price expertise?

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

Professional services expertise continues to grow in importance for telecom service providers and vendors trying to increase their revenue streams and looking at “Everything as a Service” to get there. Don’t have time to grow it organically? Just buy it. Take Dell’s agreement to buy Perot Systems for $3.9 billion.

Current Analysis analyst Amy Larsen DeCarlo is bullish on professional services but is a bit down on the deal because profits from the steep purchase price could be a long time coming – like possibly never. Still, Dell will gain the IT services capabilities on everyone’s wish list, including applications, technology, infrastructure, business processes and consulting.

With Perot in its pocket, Dell can compete with HP and IBM for lucrative IT services business by grabbing one of the last big integrators. Do we need to mention that the economic is still weak and the global credit crunch raises the question of whether Dell should keep its cash on hand or try to keep up with the Joneses of IT services.

Speculation aside, it’s a done deal now that the boards of both companies have signed on the line. It’s too late to wonder whether Dell would be better served looking for alternatives. The deal won’t close until late 2009 or early 2010, and we’ll keep watching to see if the cost vaults Dell into the game against the established players.


September 14, 2009  6:59 PM

Broadband is for the birds…

Jessica Scarpati Jessica Scarpati Profile: Jessica Scarpati

…or at least it is in South Africa.

Aggravated by data transimission delays on the ADSL service from the country’s biggest telecom carrier, an irritated IT staffer decided to pit ADSL speeds against an 11-month-old carrier pigeon named “Winston” , the BBC reported.

Staffers from Unlimited IT of Durban, South Africa, strapped a 4GB memory stick to Winston’s leg and set him loose as they began a file transfer to the same location with the same data on the stick.

Guess who won?

The phrase “early bird” doesn’t even begin to describe it. Winston flew the data 60 miles to its destination in two hours. By the time Winston got to his destination, Telkom had only sent 4% of the data.

It was a clean race, too. Like an elite athlete should expect, Winston obeyed regulations that his “birdseed must not have any performance-enhancing seeds.”

Needless to say, the race ruffled a few feathers at the partially government-owned carrier, which shrugged off any possible blame for the slow broadband services at Unlimited IT.

“Several recommendations have, in the past, been made to the customer but none of these have, to date, been accepted,” Telkom’s Troy Hector told South Africa’s Sapa news agency in an e-mail, the BBC reported.


September 10, 2009  3:47 PM

New AT&T vendor strategy launches massive procurement process change

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

AT&T is changing the traditional procurement process for network equipment and software solutions with its new Domain Supplier program, and as a result, some chosen vendors will be responsible for a lot more than their own products.

We’ve called this concept “procurement zones,” but no matter what the name, AT&T’s new procurement strategy will revolutionize how the company sources technology for its networks. AT&T’s goal is to make sure it has the best end-to-end technologies in place.

According to the company, each domain will have two suppliers that have been pre-qualified by AT&T. Those selected suppliers could work with AT&T on solutions for a set multi-year period, which puts other vendors at risk of losing business, unless they find their way into the domain vendor’s solution ecosystem as a partner.

pThe blog mill says traditional telecom networking and operations organizations haven’t been thrilled with the change because they want to choose the best technology for the job, not restrict the number of suppliers they can use. But AT&T CTO John Donovan (not a career Bell employee) is backing the idea.

AT&T hasn’t said how many domains it will have, although initial estimates were 14. The company has also said that some of the chosen have been notified, but that was the end of that discussion.

With a domain system, domain winners will have more skin in the game than just selling and delivering products. AT&T has it in mind for suppliers to be responsible for integration, testing and support for end-to-end solutions.

Some winner’s announcements have started rolling in. Ericsson said it has been chosen as one of AT&T’s two supplier vendors for wireline access, which includes technologies such as IP/DSLAM and FTTx. We’re waiting to see if some of the usual suspects come next: Alcatel-Lucent, Cisco, Microsoft, Ciena or Huawei.

In terms of the wireline access domain, Ericsson has already announced that Adtran will be its partner for remote DSLAM products. And so the supply chain reorganizes.


September 9, 2009  8:24 PM

TV Caller ID in the age of personal choice

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

I was minding my own business watching television last week when suddenly the name of a friend of mine appeared on my TV screen in capital letters. She is not an actress. Then the phone rang and it was her. I was suddenly the victim of a digital age, triple-play convenience feature: TV Caller ID.

At no charge, my cable provider added the feature to my service package without my knowledge or consent. Other cable providers have been rolling TV Caller ID out in a variety of markets for a year or two. Comcast’s variety, for example, blasts the caller’s name across all possible screens (TV, computer and telephone). That’s a bit too Big Brotherish for me. Continued »


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