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This week in telecom news, the Dell'Oro Group predicted that cloud providers will be the primary group to push for the adoption of 25G Ethernet. Meanwhile, the Federal Communications Commission (FCC) fired back at a Verizon plan to throttle 4G speeds for customers with unlimited data plans. Chairman Tom Wheeler asked Verizon to justify why it is targeting customers and not network architecture to manage its network.
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In its second quarter earnings report, Juniper Networks announced it is selling Junos Pulse, its mobile security software, to Siris Capital. Juniper is refocusing its strategy as customers cut spending and focus more on the cloud. Meanwhile, Alcatel-Lucent saw better Q2 results driven by a strong performance of the company’s 4G LTE overlays in the U.S. and China. Read on for more you need to know in the telecom sphere.
Cloud providers may lead move to 25 Gigabit Ethernet adoption
Cloud providers may be one of the primary groups to boost the adoption of 25G Ethernet as they upgrade their server access connections, according to the Dell'Oro Group, which predicts the Ethernet switch market will grow to $25 billion by 2018, up from $22.4 billion in 2013.
A group of vendors, including Google and Microsoft, formed a 25 Gigabit Ethernet Consortium in July and outlined specifications for 25Gbps and 50Gbps Ethernet usage for data centers that need more than 10/40Gbps. The consortium plans to develop its own 25/50G Ethernet specification, and products tailored for it are expected to scale network bandwidth to cloud server and storage endpoints.
The move to 25 Gigabit Ethernet will also grow 100G Ethernet switching sales because four 25GbE lanes will make the upgrade simpler and more cost-effective than the move from 40G to 100G, according to the consortium. Any new specs will be backward and forward compatible with 10G, 40G, 100G and 400G Ethernet products, the consortium said.
The Institute of Electrical and Electronics Engineers (IEEE) was not initially involved in the consortium's 25/50G specification effort, as its efforts are on 40/100G and 400G Ethernet. The IEEE put out a Call for Information (CFI) on 25/50G in March, but allegedly it didn't gather enough interest to proceed. Following the formation of the consortium, the IEEE organized an 802.3 25 Gbps Ethernet Study Group.
-- Kate Gerwig
Verizon to throttle 4G speeds for unlimited data customers
The FCC last week criticized Verizon for announcing a plan to throttle 4G speeds for some customers with unlimited data plans.
Verizon announced it would slow connection speeds of unlimited data customers during heavy network usage times if they fall within the top 5% of data users. Verizon said throttling speeds would help the provider manage its network. Verizon discontinued its unlimited data plan in 2012, but customers could remain on the plan as long as they pay full price for new phones.
In a letter to Verizon, FCC Chairman Tom Wheeler said he was "deeply troubled" that Verizon's actions do not fall within the Commission's definition of network management.
"It is disturbing to me that Verizon Wireless would base its network management on distinctions among its customers' data plans, rather than on network architecture or technology," Wheeler wrote in the letter. "I know of no past Commission statement that would treat as 'reasonable network management' a decision to slow traffic to a user who has paid, after all, for 'unlimited' service."
Wheeler also asked Verizon to answer three questions in its response to his letter, which include justifying why Verizon is treating customers differently based on data plan instead of network architecture and why the plan includes speed reductions for Verizon's more efficient 4G LTE Network.
Verizon defended itself in an Aug. 1 letter to Wheeler, saying the plan was consistent with FCC principles. "The type of network optimization policy that we follow has been endorsed by the FCC as a narrowly targeted way to ensure a fair allocation of capacity during times of congestion," said Kathleen Grillo, senior vice president of federal regulatory affairs at Verizon, in the letter, which was obtained by Reuters.
Juniper drops mobile security unit, access routing and WLAN next
Juniper Networks sold Junos Pulse, its mobile security unit, to Siris Capital for $250 million, despite posting $1.23 billion in Q2 revenue.
Juniper said the sale was consistent with its overall strategy to focus more on High-IQ networks and next-generation cloud. Juniper is projecting a dip in revenue for the third quarter -- anywhere from $1.15 to $1.2 billion -- partially due to "customer-specific dynamics," which means some of Juniper's biggest customers like Verizon and AT&T are cutting spending.
Jennifer Clark, vice president of 451 Research, said in a blog that Junos Pulse has reportedly been on the market since April and "represents a market sector in which Juniper stood little to no chance of commanding in a dominant role."
Clark added that access routing and wireless LAN product lines will follow Junos Pulse and be sold off by the end of the year.
Siris Capital is a private equity firm that makes control investments in data, telecommunications, technology and technology-enabled business service companies. Juniper said the two companies would work together during the transition to support customers.
Alcatel-Lucent Q2 financials improve with big gains in 4G LTE
Paris-based Alcatel-Lucent's Q2 financial results revealed that while core networking revenue was down 10% from a year ago and IP routing revenue was down 7%, wireless access revenues were up 28% compared to the same quarter in 2013, driven by a strong performance in 4G LTE overlays in the U.S. and China.
Alcatel-Lucent CEO Michel Combes said he is optimistic that carrier network spending will increase next year as providers focus more on the network core, which includes backhaul and IP transport.
ALU's software-defined networking (SDN) business, its year-old Nuage Networks, also made gains with three customer wins in Q2, for a total of eight customers among very large enterprises, cloud service providers and service providers.
The vendor announced it plans to explore an IPO for Alcatel-lucent Submarine Networks in the first half of 2015, but keep a majority stake in the subsidiary to help it diversify into the oil and gas market. The subsidiary makes subsea cables and owns a fleet of ships that lay the subsea cable.
Positives noted in the Q2 results include being selected by AT&T to join its User-Defined Network Cloud Program to help reinvent its cloud architecture and its involvement in 55 Network Functions Virtualization (NFV) proof-of-concept projects globally.
Alcatel-Lucent just completed the fourth consecutive quarter of its Shift plan, which is designed to help the company reinvent itself following years of losses after the 2006 merger of Alcatel and Lucent Technologies. Overall, Alcatel-Lucent's Q2 revenue increased 0.7% to 3.28 billion euros compared to Q2 2013, but reported a net loss of 298 million euros compared to 885 million euros in Q2 2013. -- Kate Gerwig