Alcatel-Lucent shifts into smaller losses, named NTT DoCoMo 5G vendor
A smaller loss was good news for Alcatel-Lucent in Q1. The company lost only $101 million, 80% lower than its $486 million loss the year before. The company's progress is a good indicator of things to come, as Alcatel-Lucent is shifting into year two of its Shift Plan, which includes more focus on selling business units and shrinking its workforce to cut costs.
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With the goal of becoming profitable, Alcatel-Lucent (ALU) is going to focus on IP networking, mobile and broadband. IP routing was ALU's most profitable product category in Q1, along with increased revenue from wireless access, IP transport and fixed access products. Alcatel-Lucent has been phasing out or renegotiating its managed services deals.
The company's sales for the quarter were $4.29 billion. Alcatel-Lucent had income of $4.1 billion, which was down 3.3% from a year ago.
CIMI Corp. President Tom Nolle wrote in his May 9 blog that Alcatel-Lucent kept the wolves at bay this quarter to create a chance to turn things around this year. "Now they have to actually create it, and their risks are a bit of a poster-child for the industry at large." Nolle said the Alcatel-Lucent's Q1 numbers suggest operators have been augmenting capacity for IP traffic, which could be more focused on optical than before to help reduce operations costs by moving to a flatter, more optically intensive network infrastructure.
In another positive sign, last week, Japanese operator NTT DoCoMo announced Alcatel-Lucent was one of six vendors chosen for its experimental trials of emerging 5G technologies. Although 5G won't be ready for prime time until 2020, the expectation is that it will offer high-speed data transmissions at more than 50 Gbps, which is 1,000 times the capacity of existing 4G LTE network's 100 Mbps peak speeds. The capacity will support massive numbers of devices to support the machine-to-machine services, according to DoCoMo.
In the U.S., Verizon, AT&T and Sprint accounted for 39% of ALU's revenues, where it is a key vendor for the carriers' LTE networks. (Kate Gerwig)
Infonetics survey shows carrier Wi-Fi evolution
Carriers are exploring newer, more sophisticated Wi-Fi architecture as they focus on delivering high-quality service, according to Infonetics Research's 2014 Carrier WiFi Strategies and Vendor Leadership: Global Service Provider Survey.
"Carrier Wi-Fi deployments are evolving to deliver the same Quality of Experience as mobile and fixed-line broadband service environments, and this is driving Wi-Fi networks to become more closely integrated," said Richard Webb, directing analyst for mobile backhaul and small cells at Infonetics.
Using Wi-Fi as a separate overlay network led the list of architectures to offload data traffic of survey respondents, which included global wireless, incumbent, competitive and cable operators. Carriers are also exploring more sophisticated architectures as they tackle bringing Wi-Fi into the mobile radio access network via SIM-based service models or deploying dual-mode Wi-Fi or small cells.
Respondents reported having an average of 32,000 access points, with expected 33% growth to 44,000 access points by 2015. Forty percent of respondents said they expect to integrate Hotspot 2.0 into more than half of their access points by the end of 2015, as well.
Carriers are also developing new ways of monetizing services so Wi-Fi will pay for itself over time. The top three monetization models were pre-pay, mobile broadband subscription bundle and tiered hotspots.
FCC discord on net neutrality vote leads to new draft
One thing that's absolutely true about the net neutrality issue is that there's trouble at home for the Federal Communications Commission (FCC) with the net neutrality vote set for Thursday, May 15. Even the two Democratic commissioners last week distanced themselves from FCC Chairman Tom Wheeler's proposal to allow Internet service providers to charge content companies for "fast-lane" access on the Internet, even though Wheeler is a fellow Democrat.
The Wall Street Journal reported on Sunday that Wheeler plans to issue a slightly altered net neutrality draft before Thursday to avoid having the proposal blow up completely. Of course there are no guarantees on that.
The new approach reportedly hasn't changed drastically, according to The Washington Post, but Wheeler is trying to make it abundantly clear that the FCC will stay on top of examining fast-lane access deals to make sure service providers aren't unfairly hindering companies that don't pay extra. The new draft also suggests the FCC would prohibit providers like Comcast and AT&T from favoring some content companies with better terms than others.
For service providers, the most startling change to the net neutrality proposal could be having Wheeler threaten to reclassify them as common carriers if they don't play by the rules, although that would no doubt be challenged in court. Wheeler's draft reportedly proposes creating an ombudsman position to advocate on behalf of startup companies who feel the pay to play rules would hurt their chances for success.
Yes, companies including Google, Netflix and dozens of other tech companies have been vocal about disliking the plan, along with tech investors and consumer groups. The home-court problem, for Wheeler, however, is that it doesn't look like he has the required three out of five votes lined up among the commissioners to pass the net neutrality changes.
The two Democratic commissioners voiced their concerns last week, which Politico called a net neutrality revolt. It is also doubtful that the commission's two Republican members will support the pay-to-play proposal. In a speech in Washington last week, Democrat commissioner Jessica Rosenworcel said, "I have real concerns about FCC Chairman Wheeler's proposal on network neutrality." While not saying she will vote against it, she asked for a one-month delay in the vote. Democrat commissioner Mignon Clyburn repeated her opposition that Internet service providers be allowed to charge companies wealthy enough to pay for priority handling.
Some protesters have gone as far as putting posters around Washington D.C. calling for the FCC to save the Internet, and that's unusual even in a policy-wonk city. According to The Verge, Reddit co-founder Alexis Ohanian is trying to get D.C. public-transit riders worked up.
The public comment process will begin as soon as (or if) the FCC votes on the proposal. (Kate Gerwig)
40 Gb and 100 Gb network port shipments hit growth surge
Global service provider and enterprise gigabit port revenue grew 5% in 2013 to $39 billion, according to a new Infonetics Research 1G/10G/40G/100G Networking Ports report.
"Deployments of 1 Gb, 10 Gb, 40 Gb and 100 Gb ports once again grew significantly in 2013, as enterprises and service providers invested in their networks to accommodate the growth in traffic, and revenue growth accelerated as buyers shifted to higher bandwidth -- and more expensive -- ports," said Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics.
The report found that while 1 Gb still comprises the majority of ports, the bulk of revenue comes from 10 Gb ports.
40 Gb is finding success in the data center market, where 40 Gb port shipments more than doubled in 2013. According to the report, 40 Gb port shipments are expected to nearly triple in 2014, reaching 1.5 million.
The report also found that 100 Gb ports almost quadrupled in 2013, as there was a surge in service provider demand for 100 Gb wavelength-division multiplexing. The first 100 Gb ports on enterprise equipment started shipping in 2013, but aren't expected to become a major factor until 2015.
"Coherent 100 Gb [which includes coherent optics to reduce the need for signal amplification to increase distances] is well on its way to completely taking over the core, growing to nearly 80% of all wavelengths by 2016, effectively shutting down competing 10 Gb and 40 Gb deployments," said Andrew Schmitt, principal analyst for optical at Infonetics and co-author of the report.