Alcatel-Lucent

Huawei ascends to optical networking prominence in $3.6B market

<Did you see the blaze of light as Huawei’s streaked past Alcatel-Lucent on its way to becoming the top optical networking equipment vendor for the first time in Q3? Upsetting long-term record-holder Alcatel-Lucent, Ovum reported Asia-Pacific markets are tearing up the market segment, especially in China, which Ovum said is propelled by 3g mobile network builds. And when China builds, Huawei benefits. Huawei now leads the optical market by almost 3%, Ovum said.

Clearly on a roll, the Del’Oro group reports Huawei is in second place in the mobile networking market in Q3, still far behind Ericsson, but Huawei’s market share went from 11% last year to 20%.

Overall, the optical networking market is down 10% compared to Q308, but global spending still totaled $3.6 billion in Q3 and a recovery appears to be in progress. Several of the top 10 optical vendors have seen improved revenue (including Cisco, Fujitsu, NEC, Tellabs and possibly Nortel), but ZTE, the other Chinese powerhouse, edged out Fujitso for #4. In the hard-knock life category, Nokia Siemens Networks (NSN) fell from #5 in Q308 to #8th, behind Tellabs, a year later. Comeback-kid Cisco also edged out Ciena to re-enter the top 10.

Huawei and mobile infrastructure: Taking on the heavies

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).

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

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.”

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

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.

More 100 GigE edge router positioning, but why?

The news is this: Cisco is doubling the density of its Aggregation Services Router 9000 edge router series, which puts density well above the 100 Gig mark. The new line cards, which will be available in the next few months, have 16 10-gigabit-per-second Ethernet ports.

Cisco is claiming top-dog position at the moment, but its competitors have taken turns with edge router announcements of late. Juniper expects to start trialing 100-GigE cards for the MX 960 edge router before the end of the year. Alcatel Lucent is on a similar timetable. Huawei expects to introduce a 100-GigE line card, as well. So, different day, different vendor announcement.

The bigger question is why? What’s really happening is that vendors are positioning to help service providers engineer the next generation of services, according to CIMI Corp. President Tom Nolle. The approaches equipment vendors are announcing are extremely subtle; the point is to be a player in the network edge carrier build-up.

The likely reason service providers are interested in beefing up the network edge is not to serve up video for over-the-top players more efficiently, but to get into the content delivery network (CDN) business themselves so they get a bigger cut of the revenue, Nolle said. “If a provider is going to get a piece of the action by selling CDN services, they need to provide a better user experience.”

This isn’t the end of the port wars by any means, and who wins the most carrier market share will be interesting to watch.

Huawei gains optical market share during recession, Asia-Pac build-out

China-based Huawei is at the top of the optical networking vendor pile for the first time in Ovum’s preliminary Q1 2009 results. The bigger news is that this puts Huawei ahead of optical-stalwart Alcatel-Lucent in the first three months of the year, but not for the past 12 months overall. And while optical network spending is down compared to 2008 for the past two quarters, Asia-Pac spending was remarkably strong.

Specific reasons for Huawei’s performance are varied, but they include China’s 3G network build-out race, in which Huawei figures prominently as a vendor of choice, according to Ovum’s Dana Cooperson, VP of optical networking. And like Las Vegas, what’s sold in Asia-Pac is often deployed in Asia-Pac.

Continued »

More LTE vendors join the 4G party (but no cake for Nortel!)

Lately, 4G is starting to seem like (relatively) easy money for everyone … or rather, everyone but poor, beleaguered Nortel, which is starting to remind me of Milton from Office Space, never getting a piece of the cake even as they watch it distributed all around them:

Nina: Now Milton, don’t be greedy, let’s pass it along and make sure everyone gets a piece.
Milton Waddams: Yeah, but last time I didn’t receive a piece. And I was told…
Nina: Just pass.
[while the cake passes Milton mutters - eventually everybody but Milton gets a piece]
Milton Waddams: [muttering] I could set the building on fire.

Today, Verizon announced that Giesecke & Devrient will be the supplier of the telco’s LTE smart cards, one step closer in bringing its planned 4G juggernaut to the masses. It will be a long, long time until we see LTE phones, of course, but already G&D and other suppliers are starting to see the 4G stimulus roll in.

Verizon also announced today Gemalto would offer the company’s OTA platform for LTE.

Meanwhile, FierceWireless notes a UBS report that claims AT&T has shortlisted Continued »

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Keeping you up-to-date on the latest in telecommunications industry news, views and strategy, Telecom Timeout and its weekly video blog track the highs and lows of the industry. Join us daily on Telecom Timeout for conversations on developing telecom trends and in-depth analysis of service providers, VoIP, wireless, IPTV, telecom regulation, and more.

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Keeping you up-to-date on the latest in telecommunications industry news, views and strategy, Telecom Timeout and its weekly video blog track the highs and lows of the industry. Join us daily on Telecom Timeout for conversations on developing telecom trends and in-depth analysis of service providers, VoIP, wireless, IPTV, telecom regulation, and more.

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Keeping you up-to-date on the latest in telecommunications industry news, views and strategy, Telecom Timeout and its weekly video blog track the highs and lows of the industry. Join us daily on Telecom Timeout for conversations on developing telecom trends and in-depth analysis of service providers, VoIP, wireless, IPTV, telecom regulation, and more.