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May 16 2008   9:16PM GMT

Alca-Lu ponders how to recover its position



Posted by: Tom Nolle
Alcatel-Lucent, Telecom

Alcatel-Lucent is asking shareholders to amend the rules for dismissing the CEO or chairman, which would make it easier for the company to shed current CEO Pat Russo. Russo’s position has been deteriorating with the company’s stock price and financial performance, and many inside ALU and outside believe that a major shakeup in management, needed to improve the company’s position, would have to start with Russo. We’ve noted for some time that Russo was less than the ideal candidate for the times, but one challenge that ALU would face should she be removed is whether anyone, at this time, could do much better. While Alcatel-Lucent has enormous strategic strengths and a strong customer position, it has also created a somewhat dysfunctional organization with the merger, and much of the strategic thinking that characterized the company in the past has been diluted by a combination of organizational change and tactical focus. We believe there are steps ALU could take to recover its position, and even to do so within a year, but they would be bold steps of the type that neither a sales-driven CEO like Russo nor a new figure in the role would be likely to take.

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May 2 2008   2:55PM GMT

Software-driven network services — lots of talk



Posted by: Tom Nolle
software-as-a-service, IP services, Telecom

Network operators at a UK software event talked about more aggressive plans to focus on software-driven network services and features, and included goals of delivering software modules as elements or units of basic service functionality. This vision mirrors what we have heard in private dialogs and public presentations alike, beginning almost 18 months ago, but there are more public articulations of the view today than there have been in the past. Some operators are reportedly avid supporters of Web 2.0 (BT included) and others (like Telstra) are more skeptical. We believe that despite all of the talk here, there is actually relatively little real progress in transforming operator business models to a more software-driven, partner-developer-focused, form.

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Apr 4 2008   4:55PM GMT

New open source initiative from CIMI Corporation



Posted by: Tom Nolle
Open source, Networking, Telecom

We have launched an open source project to develop service logic execution environments (SLEEs) and service management execution environments (SMEEs) for NGN services. The initiative is called “ExperiaSphere,” and we are now actively seeking contributors and partners in the process. We’ve established a website wiki (www.experiasphere.wikispaces.com) for this new venture, and we invite our clients and those who read this blog to review the material there from time to time as the concept develops. Some coding is already started for this activity, and we expect to be making media announcements in May.

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Feb 13 2008   8:48PM GMT

Telecoms focus in on business model transformation



Posted by: Tom Nolle
network equipment, IT, Telecom

An IBM study of telecommunications predicts that operators will be less focused on simple revenue growth or cost reduction and more on business model transformation in the coming five years. This harmonizes with our own survey, if one considers that “business model transformation” means redirecting business focus on different activities. One import of the shift that IBM focuses on is that this almost certainly involves more IT focus than pure network equipment focus, which we believe strongly to be true. This is likely another datapoint validating Cisco’s software shift, and it shows other vendors the direction to take. It also raises the question of whether IBM might either acquire or partner more strongly with a network vendor for service provider networking.

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Feb 12 2008   2:39PM GMT

Proposed deals verify mobile angst



Posted by: Tom Nolle
Telecom, Motorola, Alcatel-Lucent, Mobile

Regarding the Alcatel-Lucent/NEC deal and the rumored Motorola-Nortel deal, these developments are symptoms of the angst in the mobile infrastructure market, the slowing of investment in infrastructure that is accompanying a lack of convincing growth in ARPU, and concerns about regulatory shifts and voice pricing. The vendors are looking for something to hang their future revenue model on, as well as to reduce costs and pull back their exposure to the mobile market. More of this sort of thing, and other activities related to the overall mobile infrastructure challenges, can be expected through this year and into 2009.

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Dec 12 2007   5:07PM GMT

AT&T feels open wireless pressure



Posted by: Tom Nolle
Telecom, Mobile, Wireless broadband

AT&T has semi-affirmed an open wireless strategy, not going as far as Verizon but clearly going far enough to show that it feels the pressure. The company notes that GSM phones are compatible across networks through a SIM card, which offers some handset portability, but falls short of the complete open-if-certified model Verizon plans. We believe the AT&T comments reflect the reality that the mobile walled garden was breaking down under pressure from regulators, Google saw that and launched Android and OHA, and the operators are now responding, but more to the regulators than to Google. This is important because it likely means the regulatory pace of opening wireless will accelerate in 2008 given relative lack of operator pressure. The comments came as AT&T issued an upbeat forecast for the coming year.

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Dec 4 2007   12:51PM GMT

Motorola shakeup to cause industry trickle-down?



Posted by: Tom Nolle
Telecom, IP services, Networking

Motorola’s president, Ed Zander, stepped down and will be succeeded by Greg Brown. The company has been under pressure because of poor stock performance, and it is this that makes the departure of Mr. Zander interesting. There are many companies that Wall Street believes have not met shareholder appreciation goals, including Cisco, and the pressure for the change came as private equity companies were working with some board members and investors to break Motorola up to create several units whose combined performance would better suit shareholder goals. We believe that this kind of pressure will spawn aggressive product moves among other network companies in 2008 to prevent being fragmented.

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Nov 20 2007   3:33PM GMT

Internet traffic growth could be $150 billion problem



Posted by: Tom Nolle
Internet, Telecom, Video Adapter

A study predicts that the unbridled downloading of content will increase Internet and broadband access traffic to the point where serious slowdowns could occur by 2010, and an investment of nearly $150B would be required to fix the problem. The exact numbers and dates here may require some justification, but the overall problem cited is real. The challenge with the current Internet model is that there is no financial back-pressure against multiplying traffic, which also means that there is no incremental revenue associated with that traffic. The pure over-the-top model risks a separation of “return” from “investment” and that means that even if these numbers are true there may be little or no incentive for the operators to spend the kind of dollars suggested. The suggestion that “something must be done” may be valid, but there has to be a commercial framework created that permits investment or nothing will be done.

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Nov 16 2007   2:10PM GMT

MoCA help for FiOS FTTH?



Posted by: Tom Nolle
Cable, Telecom, Video Adapter

Verizon has asked the Multimedia over Coax Alliance (MoCA) to work on raising the maximum broadband capacity of MoCA to 400 Mbps, a move that may signal Verizon’s interest in using MoCA to distribute video and broadband to multiple homes from a single remote. All operators, (even Verizon whose territory is dense and valuable) will find a significant portion of households non-economical for FTTH, and changes to MoCA to provide headroom would allow Verizon to use cable to increase the cost efficiency of its FiOS delivery where subscriber density and/or ARPU are lower.

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Nov 15 2007   3:10PM GMT

Oracle launches telco OSS initiative



Posted by: Tom Nolle
OSS, Telecom

Oracle is launching a major telco OSS initiative based on conformance with the Telemanagement Forum (TMF) SID data model and architecture. The move is an evolution of Oracle’s growing interest in the carrier market, but it also represents a key step in its competition with IBM and perhaps for the industry as well. The Oracle OSS model includes the ability to import information from other information systems, but it also integrates many of what would ordinarily be seen as enterprise applications, such as ERP. This increased focus on business applications for OSS processes is reflective of the TMF view but also tends to favor software players like Oracle against middleware/hardware players like IBM. For the industry the move likely means much greater service provider focus on OSS processes, since the giants of the industry are now contending with each other in that space and elevating their issues to be visible to senior management. We believe this will put additional pressure on network equipment vendors to take some stand in the OSS and service management space,or risk being marginalized under the software umbrella of others like Oracle.

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