VoIP

NSN moves on to next-generation optical access

Nokia Siemens Networks (NSN) has announced it will not continue to invest in GPON, focusing instead on DSL and next-gen optical access (NGOA).

The decision, we believe, is attributable to a number of factors, including the truth that PON in any form is not universally feasible (where demand density is low it won’t recover costs at current price points).  In addition, vendors including ALU already have a substantial lock on the GPON business, and an NGOA that combines fiber remote and DSL or multimedia over oaxial cable access (MoCA) with PON could be the real long-term winner. We’re hearing interest in this last point from both carriers and equipment vendors.

Comcast to face net neutrality sanctions

Reports out of Washington D.C., suggest that the FCC’s Martin will recommend a sanction against Comcast for violating its net neutrality principles, but it is not clear (since those principles were not an “order” in a legal sense) whether the decision will have any teeth. Comcast, furthermore, has already changed the way it manages traffic, focusing on users and not applications. The move by the FCC is thus popular with consumer advocates and meaningless, but it may show that the FCC will come down harder on deep packet inspection (DPI)  for gleaning behavioral data from ISP streams.

Microsoft to launch collaboration software partner plan

Microsoft is launching its new online flagship service concept in what it calls the “Deskless Worker.” The new suite is designed for the entry-level Exchange and Sharepoint candidates who often don’t use Microsoft at all because of the cost and complexity of running their own versions of the server software.

Microsoft is working to promote a revenue-sharing scheme with partners that will then benefit from the revenue stream in the same way they’d have profited from selling the server software. This latter piece is a critical component of the idea, since it rectifies one of the challenges Microsoft has faced in promoting SaaS versions of traditional server applications.

This launch jumps the gun on Cisco and other rumored entrants into the online collaborative service space, and it likely indicates a competitive collision in this area at the end of this year and ranging through 2009.

Emerging economies create emerging vendors

Emerging economies’ telecom deals may be creating a new wave of key players, absent some of the usual names. The recent action in China and India show that where an emerging economy invests in telecom infrastructure, the deals are weighted toward access, metro and fiber, and less to the high-flying switching/routing. Package bids that involve a range of products are also more common. This favors players like Alcatel-Lucent, whose broad portfolio of access products and metro solutions got it attention in India, but also price-leader players like Huawei and ZTE. We believe it is likely that there will be pressure put on Cisco, Juniper, Tellabs, Ciena and other more narrowly focused players to partner or even merge to counter the trend.

Carrier Ethernet/MPLS TCO comparison brings surprises

CIMI Corporation has completed an extensive survey-and-model process on the economics of carrier infrastructure, focusing on the TCO differences between Carrier Ethernet and IP/MPLS. The results of this study will be published in the July issue of our newsletter Netwatcher, and we will also release a separate report in the fall.

The results of the study, which surprised us considerably, were that while Ethernet always generated lower capex costs, it was also unusually vulnerable to issues in service management efficiency, especially in the WAN versus metro. Those issues could swing the TCO in IP’s favor, providing that IP service management was strong. In fact, the effectiveness of service management tools on controlling operations costs and support incidents had more effect on TCO than a swing in capital cost of over 40%.

NEC buys NetCracker for OSS and SDP presence

NEC is buying OSS firm NetCracker, a move we think sends the clearest signal so far on the importance of operations software in the telecom space. NetCracker is known for a strong service delivery platform (SDP) software position, a class of operations and service feature strategies that focus on hosting features and operations elements on specialized platforms.

We believe that telco equipment vendors will generally beef up their OSS positions, but in particular will be beefing up their SDP positions, as consumer services and partnerships with higher-layer players change the nature of service provider revenue targets and infrastructure priorities.

NEC sees this as an entrée into the telco space, and they’re right. The price of playing in major deals in the future is going to include the ability to supply integrated operations solutions. If they’re your own, you have differentiation. If they’re someone else’s, you’re heading down the road to plumbing.

AT&T U-verse to Trial 2 High-Def Streams

AT&T is about to begin a trial roll-out of a U-verse service that could deliver two HD streams at once, something that hasn’t worked up to now. There are several ways in which AT&T is looking at this, one through increasingly aggressive compression and the other through upspeeding the loop. It is possible both will be tried. There is no indication of when the capability will be fully rolled out, but AT&T appears committed to it. They have to be; this would be a crippling problem for U-verse if it continued much into 2009. We believe AT&T has major problems with its TV strategy, this change notwithstanding, and that they will eventually be forced to move to another approach.

Telcos look at open source

Telcos are apparently working harder to make their APIs suitable for a broader range of web developers, providing more Web 2.0-like or “RESTfull” interfaces (an acronym for the normal interaction between web clients and servers). We believe that the move is positive in that it shows the operators are aware they can’t make their developer programs work with complex event-based APIs. But we also believe that simple web interfaces are only suitable for the limited set of services that can be projected from a telco API direct to an end user. While we’re clearly biased, we believe this is a validation our open source ExperiaSphere (www.experiasphere.wikispaces.com) approach.

Microblogging: Trouble for network bandwidth?

Twitter, the “What are you doing” less-than-texting concept, is gaining a lot of buzz, users and funding. Monetizing any social network has proved difficult, and Twitter’s simple approach makes it harder than usual to see how ads might work there, but it still raises a troubling question for networks. Is the real service of the future more signaling than bandwidth? Clearly you can’t be twittering video stuff to each other; and few people have the time for an activity that must occur regularly and also consumes a lot of capacity.

If casual social microblogging is the prototype of future services, then network bandwidth and bandwidth production could be in deep trouble. We believe that the telco side of the market needs to be thinking about how to make casual bit-intensive activities as attractive as short text messages and blogs, or face some unpleasant consequences.

Fixed mobile convergence makes global progress

T-Mobile is launching its broadband voice @Home service throughout the US, which prepares them for an agressive FMC position. French telecom carriers are also expected to push harder on FMC and wireline broadband expansion as the consolidation in the market finally draws to a close, but that we believe is mirroring a worldwide trend.

Consolidation hasn’t been holding other projects back, it’s simply been a safer early response to declining revenue per bit. We believe that operators worldwide are preparing for a “transformation test” around FMC, broadband services, partnerships with Internet companies and developers, and other new areas. They’ll fund what works and cease funding what does not, and this could result in some pockets of spending and reductions as everyone takes the measure of their market. We think the situation will be more predictable in 2009 than in 2010 through 2012, when only some successful revenue initiatives will drive spending growth in service provider infrastructure.