IEEE 802.16 Wireless MAN (WiMAX) Session #80 (July 2012) Meeting Report

IEEE 802.16’s Session #80 was held on 16-19 July 2012 in San Diego, California, USA. This was an IEEE 802 LMSC Plenary Session and co-located with sessions of the other IEEE 802 Working Groups and Technical Advisory Groups. The attendance was 32 (Editors Note: attendance was way down from previous sessions for obvious reasons). 

HetNet Study Group

The new IEEE 802.16 WG Study Group (SG) on the WirelessMAN Radio Interface in Heterogeneous Networks (HetNet Study Group) met for the second time. The IEEE 802 EC renewed the Study Group though Session #82. Following activities during the session, the HetNet SG is now proceeding with three separate topics:

Work toward an “OmniRAN” project using an Open Mobile Network Interface (OMNI) was advanced by presentation of an IEEE 802 Tutorial on OmniRAN the evening of 16 July.

The HetNet SG issued a Call for Contributions:
OmniRAN Standard for an IEEE 802 HetNet
, which includes a Call for Comments on draft text toward an OmniRAN Project Authorization Request (PAR).

Following comment resolution, the Study Group’s PAR P802.16q, on a Multi-Tier amendment to IEEE Std 802.16, was concluded and then forwarded by the 802.16 WG and the IEEE 802 Executive Committee (EC). It is on the 29 August
NesCom agenda and could be authorized by the IEEE-SA Standards Board on 30 August. The SG issued a Call for
Contributions
on the topic. 

In response to contributions, the SG issued a Call for Contributions: Small-Cell Backhaul (SCB) Enhancements to WirelessMAN-OFDMA soliciting input with an intent to develop a PAR and Five Criteria at Session #81.

Metrology Study Group

The IEEE 802.16 WG Study Group on Broadband Wireless Access Metrology (Metrology Study Group) met for the second time. Following comment resolution, the Study Group’s PAR P802.16.3 on Mobile Broadband Network Performance Measurements was forwarded by the 802.16 Working Group and the IEEE 802 EC. PAR P802.16.3 is on the 29 August NesCom agenda and could be authorized by the IEEE-SA Standards Board on 30 August. The IEEE 802 EC renewed the Study Group though Session #82, and it remains open to investigation of other possible projects as well. The SG issued a Call for Contributions on Broadband Network Performance Measurements and drafted a second such Call for Contributions, withholding release pending action of the IEEE-SA Standards Board regarding the PAR. The SG summarized its work in a closing report and minutes.

GRIDMAN Task Group

The Working Group’s GRIDMAN Task Group resolved comments received during the second recirculations of WG Letter Ballot #37 and WG Letter Ballot #38, in which drafts P802.16n and IEEE P802.16.1a are under review. In each
case, a 15-day confirmation ballot will run from 27 July through 11 August. Based on conditional approval granted by the 802 EC, both drafts may proceed to Sponsor Ballot, closing prior to Session #81, dependent on successful recirculation. The TG issued a closing report and minutes.

Machine-to-Machine Task Group

The Machine-to-Machine (M2M) Task Group did not meet at Session #80. The 802.16 WG approved comment resolutions agreed by the TG at an earlier teleconference and agreed to initiate a third Sponsor Ballot recirculation. The
802 EC granted conditional approval to forward both M2M drafts (P802.16p and P802.16.1b) to RevCom. Both have been submitted for the 29 August RevCom agenda, pending successful recirculation, and could be authorized by the IEEE-SA Standards Board on 30 August. The TG Chair issued a closing report.

Maintenance Task Group

The P802.16Rev3/D6 and P802.16.1/D6 drafts were approved as, respectively, IEEE Std 802.16-2012 and IEEE Std 802.16.1, on 8 June. The Maintenance Task Group met informally to review a pre-publication editor’s draft of IEEE Std 802.16-2012. Volunteers are invited to participate in a similar exercise regarding IEEE Std 802.16.1. Publication of both standards is expected this summer. The TG Chair issued a closing report and minutes.

ITU-R Liaison Group

The ITU-R Liaison Group drafted contributions to ITU-R Working Party 5D (WP 5D) regarding IMT-2000 and IMT-Advanced updates. The two drafts were approved by the 802.16 Working Group, the 802.16 Radio Regulatory TAG, and
the IEEE 802 EC. The ITU-R Liaison Group also completed liaison statements to its partner organizations regarding the IMT-2000 and IMT-Advanced activities.

One of these statements (802.16-12-0515) solicits input regarding IMT-Advanced sharing parameters prior to Session #81, in response to an invitation from WP 5D to address activity in preparation for the 2015 World Radiocommunications Conference. The Liaison Group will meet at Session #81 to prepare the resultant contribution to WP 5D. For more details,
see the closing report.

Project Planning Committee

The WG’s Project Planning Committee met for one period during Session #80. It confirmed the IEEE 802.16 Ballot Schedules. The committee began review of two input contributions on direct mobile communication for proximity-based
applications. The Committee issued a closing report.

Future Meetings

Session #81 will take place on 17-20 September 2012 in Indian Wells, CA, USA in conjunction with the IEEE 802 Wireless Interim. The GRIDMAN TG, HetNet Study Group, Metrology Study Group, ITU-R Liaison Group, and Project Planning Committee will meet.

Session #82 will take place on 12-15 Nov 2012 in San Antonio, TX, USA in conjunction with the IEEE 802 Plenary 

Session #83 will take place on 14-17 Jan 2013 in Vancouver, BC, Canada in conjunction with the IEEE 802 Wireless Interim.


Complete report with links to meeting reports and minutes is at:

http://ieee802.org/16/meetings/mtg80/report.html

Session #84 will take place on 18-21 Mar 2013 in Orlando, FL, USA in conjunction with the IEEE 802 Plenary Session.

Huawei gaining on Ericsson for leadership in network infrastructure equipment sales

FT:  Huawei is challenging Ericsson to become the world’s largest telecom equipment vendor by sales following a decade-long push by the Chinese company to shake up the industry. Huawei said on Tuesday its revenue in the first six months was Rmb102.7bn ($16.1bn), up 5.1 per cent compared with the same period in 2011.

Close to a quarter of all sales at the Huawei are through consumer businesses such as handsets.  However, while revenues have continued to build for Huawei, the company said operating profit in the first six months fell 22 per cent from last year to Rmb8.79bn. The company, which is not listed, did not announce net earnings but said it “maintained robust growth momentum although the global economic situation and telecom equipmentmarket remains a significant challenge”

Ericsson last week reported a drop in first-half revenue to SK106.3bn ($15.2bn) from SK107.7bn a year earlier. The company saw net income drop 63 per cent year on year in the second quarter, was the latest telecom equipment vendor to suffer from weak growth in the industry. Just days before, Alcatel-Lucent had warned of a €40m operating loss in the second quarter, andZTE, Huawei’s smaller Chinese peer, said it expected first-half earnings to plummet 60 to80 per cent from Rmb769.3m a year ago.“We are relatively optimistic about our operating performance and profitability for theremainder of 2012,” said Meng Wanzhou, chief financial officer.Ericsson is the clear leader in a number of market segments such as mobile networkinfrastructure and telecom services, but analysts said that Huawei was likely to continue to gain ground.

http://www.ft.com/intl/cms/s/0/c7b672fa-d57e-11e1-b306-00144feabdc0.html#axzz21fkGAVYT


Reuters:   Huawei Technologies Co Ltd HWT.UL, the world’s No.2 telecommunications gear maker, posted a 22 percent fall in first-half operating profit, citing the “significant challenge” of the global economy and the telecoms equipment market.

The Chinese company, whose expansion plans have been met with some suspicion in the United States and Australia over concerns about cyber security, said revenues rose just 5 percent although it expressed confidence it would achieve its full-year target of boosting sales 15-20 percent.

The drop in operating profits comes after rival Ericsson (ERICb.ST) reported below-forecast profits and competitors Franco-American Alcatel-Lucent (ALUA.PA) and China’s ZTE Corp (0763.HK) 000063.SZ issued profit warnings, largely reflecting sluggish telecom spending during the global economic downturn.  However, Huawei and ZTE may fare better than their western competitors in the second half of 2012 because spending on Chinese mobile networks is expected to pick up, analysts said.

“The second-half outlook will be better for Chinese companies such as Huawei and ZTE because Chinese telecom carriers will pick up the slack in spending in the second half,” said Michael Li, a Hong Kong-based analyst with Everbright Securities. Tenders by mobile carriers to upgrade networks were delayed in the first half and the government is keen for them to meet their spending plans for the year.

Shenzhen-based Huawei, also the world’s sixth-biggest handset maker, is unlisted and provides few figures about its corporate performance.  In a seven paragraph statement, it said operating profit of 8.79 billion yuan ($1.4 billion) for January to June was lower than a year earlier but up 20.3 percent compared with the second half of 2011. First-half revenues rose 5.1 percent from a year earlier to 102.7 billion yuan.

“The telecom industry is seeing sluggish growth in 2012 owing to the global economic downturn, which has caused customers to reduce investments while the competition in this industry remains fierce,” company spokesman Scott Sykes said. Li reckoned revenue growth would pick up to at least 10 percent for the full year, although Sykes said Huawei was confident it could meet its 15-20 percent target.  Huawei did not provide first-half figures on net profit or its gross profit margin.

“Huawei continues to maintain robust growth momentum although the global economic situation and telecom equipment market remains a significant challenge,” it said in the statement. 

CONCERNS

Huawei, founded by CEO Ren Zhengfei in 1987 after he was made redundant by China’s military, has diversified into consumer devices and enterprise networking equipment as growth in its core telecoms gear market has stalled.  The firm is close to taking over market leader Ericsson as the No.1 telecom equipment vendor globally, although securing that top slot will be tough if it fails to gain business with U.S. telecom carriers.

The U.S. government has been suspicious of Chinese companies such as Huawei and ZTE selling telecom gear to its carriers on concerns over possible cyber security and reports that they had sold U.S. computer equipment to Iran.  Both companies have said they had curtailed their business in Iran. 

Huawei was blocked in March from an Australian broadband tender. The attorney general cited the need to ensure the “security” of critical infrastructure.  However, both Huawei and ZTE have had considerable success in selling mobile phones globally, including to the U.S. market, where their prices are generally cheaper compared with larger rivals such as Apple Inc (AAPL.O) and Samsung Electronics Co Ltd (005930.KS). 

Huawei plans to spend $200 million on advertising this year to help boost sales, Shao Yang, the chief marketing officer of Huawei Device, the division that sells handsets, tablets and dongles, said in June.  However, Jefferies brokerage said the company’s 2012 handset sales targets were under threat by the global slowdown.  In a client report, it said Huawei’s executives had told the brokerage that Europe and North America were seeing a slowdown in smartphone demand, lower subsidies and a longer replacement cycle. 

“In China, there is also slowing demand across the board including tier 2 and 3 cities. China’s total telco handset subsidies are expected to remain stable, however, subsidies/handset may decline as prices of smartphones decline,” Jefferies said. 

With demand weakening in some markets, Jefferies said Huawei’s full-year 2012 smartphone shipments might be in the range of 35-40 million, lower than the initial company target of 60 million.

http://www.reuters.com/article/2012/07/24/us-huawei-results-idUSBRE86N0SI20120724


Huawei VIDEO: Chinese vendor Huawei is eyeing dominance of a global LTE network market that it expects to grow to more than 140 commercial operator deployments by the end of this year. In a video interview with Mobile World Live,
Ying Wei Min, President of GSM, UMTS and LTE networks at Huawei, noted that this rapid growth will build on the “more than 80 [LTE] networks launched globally” to date, fuelled by booming demand for mobile broadband services.

VIEW VIDEO:  http://www.mobileworldlive.com/videos/huawei-aims-to-dominate-lte-network-market/24696?elq=b0087be5d8994e1ea01991708af665c9

Weak Global Econcomy & Slow Business in China Has Negative Impact on Alcatel-Lucent and ZTE

Alcatel-Lucent underlined the bleak outlook for itself and much of the telecoms equipment sector by disclosing second-quarter operating losses of €40m and abandoning yearly profit targets. The company cited a “slower than expected business mix improvement”. Alcatel-Lucent also said that while it expects the second half of the year to be better than the first, it will not now meet its previously-announced adjusted operating margin guidance for 2012. It noted a “difficult macro-economic environment”.

According to Odon de Laporte, an analyst at Credit Agricole Cheuvreux cited by Bloomberg, the company has also been impacted by slow business in China. During the first quarter, the company noted “extremely weak” sales of GSM equipment in China, due to the timings of the sales cycle.

http://www.mobilebusinessbriefing.com/articles/alcatel-lucent-warns-on-weakness/24603?elq=2a834f68289f43f0a86e70927f1c2d27

Financial Times offerered an even bleaker assessment for Alcatel-Lucent prospects this year:

http://www.ft.com/intl/cms/s/3/40dd8db6-d008-11e1-bcaa-00144feabdc0.html#axzz212LYe1kO

Update on Alcatel-Lucent– 26 July 2012:

Alcatel-Lucent reported a net loss for its second quarter and announced that it is planning to reduce its headcount by 5,000 in an effort to further cut costs. The results make it the latest infrastructure vendor to suffer at the hands of the economic downturn, along with Ericsson and Huawei.

The company reported a net loss of EUR254 million for the second quarter on the back of revenue of EUR3.55 billion. The loss was particularly severe when the previous quarter’s EUR398 million net profit is taken into account.

Revenue was down 7.1 percent from EUR3.82 billion reported in Q2 2011 but up 10.6 percent from the previous quarter’s EUR3.21 billion.

Revenue for the wireless network business was EUR877 million, up 11.3 percent from the previous quarter’s EUR788 million but down 18.7 percent compared to EUR1.08 billion for the same quarter in 2011. The decline in wireless revenue over the past year was attributed to “moderate or delayed spending of service providers” on 2G and 3G technologies. However, the company’s LTE business more than tripled its revenue during the course of the year.

North America and Europe provided the bulk of the company’s total revenue during the period but have declined 8.3 percent and 15.6 percent respectively compared to a year ago. The only region to have increased revenue in the past 12 months is the rest of the world with Central and Latin America recording a seventh consecutive quarter of double digit growth. All geographies were up compared to the previous quarter.

Alcatel-Lucent CEO Ben Verwaayen said the second quarter performance confirms the company’s strong position in “many attractive market segments” such as IP, next-generation opticss and broadband access, but also the effects of the global economic situation. Verwaayen’s ommision of ‘mobile’ from the company’s list of strong markets reflects how Alcatel-Lucent is facing serious competition in the wireless sector.

Verwaayen added: “It is clear from the deteriorating macro environment and the competitive pricing environment in certain regions challenging profitability that we must embark on a more aggressive transformation.” To that end, the infrastructure vendor has launched “The Performance Program” to achieve a further EUR750 million cost reduction to bring total savings to EUR1.25 billion by the end of 2013. The plan includes the reduction of 5,000 roles in the organisation and the exit or restructuring of unprofitable managed services contracts and markets. “These times demand firm actions,” Verwaayen said.

The company has previously reduced costs through rationalising its product portfolio, co-sourcing, reducing cost structure and managing working capital more effectively. The company is targeting a strong positive net cash position by the end of 2012.   http://www.mobilebusinessbriefing.com/articles/alcalu-swings-to-q2-loss-announces-5-000-job-cuts/24737?elq=b0087be5d8994e1ea01991708af665c9

LightReading:   “These times demand firm actions,” stated CEO Ben Verwaayen in today’s earnings press release.

In addition to cutting jobs, AlcaLu intends to exit or renegotiate unprofitable managed services deals and quit unprofitable geographic markets. No mention was made of winding down or selling off product lines.

As part of the program AlcaLu is also looking to capitalize on its intellectual property and is setting up its patent portfolio as an independent profit center.

The cost-cutting plan wasn’t enough to appease investors, as AlcaLu’s share price on the Paris exchange fell by 5.4 percent in early trading Thursday morning to €0.83, giving the company a market value of just €1.9 billion ($2.3 billion).

http://www.lightreading.com/document.asp?doc_id=223302&f_src=lrweeklynewsletter


And now let’s look at ZTE,  whose Shenzhen-listed shares closed down sharply after its recent earnings report. The Shenzhen-based firm said late Friday that its net profit would total 154 million to 308 million yuan ($24.4 million to $48.9 milliion) in the first half of 2012, dropping 60 to 80 percent year-on-year from 769 million yuan in 2011.

ZTE attributed the profit decline to considerable investment returns in the first half of 2011, foreign exchange losses and order postponement by domestic telecom operators.

“Our performance in major businesses is better in 2012 than the previous year,” Dai Shu, spokesperson of ZTE China, told the Global Times Tuesday. “If we deduct the 900 million yuan earnings by selling Nationz Technologies Inc’s shares in 2011 and 150 to 200 million yuan foreign exchange losses resulting from the eurozone crisis.”

ZTE would grow faster than the average growth of the industry in 2012, Dai projected, noting that the company would release its semiannual report in August.  However, the firm has to face worsening market environment and industrial bottlenecks, analysts said.  Dragged by the global economic downturn, telecom operators around the world postponed their projects and investments, and the trend is unlikely to reverse in the short term, said analyst Chen Yunhong from Sinolink Securities. 

Technology research firm Gartner predicted that the global telecom sector would see 2 percent expansion in 2012. 
Media reports said many ZTE staff have been recalled from overseas postings since early this year and further job cuts would be announced within the year. 
http://www.globaltimes.cn/content/721664.shtml

Gartner: Robust growth for telecom equipment spending, tepid growth for telco services, PC sales flat

Telecom equipment spending could rise 10.8 percent to $377 billion this year, according Gartner Inc.  The prestigious market researct firm forecasts that growth will continue throughout 2013 when spending will increase by 8.3 percent to $408 billion.

“While the challenges facing global economic growth persist—the eurozone  crisis, weaker U.S. recovery, a slowdown in China—the outlook has at least  stabilized.  There has  been little change in either business confidence or consumer sentiment in the  past quarter, so the short-term outlook is for continued caution in IT spending,”  said Richard Gordon, research vice president at Gartner.

However, telecom services spending will not fare nearly as well, according to Gartner.  2012 telco service growth will only be 1.4% this year to $1,686B.  And 2013 growth will still be paltry at 2.3% to $1,725B.  The global telecom services market continues to be the largest IT spending  market. Telecom services growth is expected to come not only from net  connections, especially in emerging markets, but also in mature markets from the  uptake of multiple connected devices, such as media tablets, gaming and other  consumer electronics devices.

Telcos could also reap some benefits as more businesses and govenment agencies start to adopt cloud computing services. Gartner predicts that enterprise spending on public cloud  services will grow from $91 billion worldwide in 2011 to $109 billion in 2012 to reach $207 billion in 2016.  That’s somewhat surprising since other market research firms predict more robust growth for private cloud services, due to concerns about performance, security and failure recovery.

For more info please see the press release:

http://www.fiercetelecom.com/press-releases/gartner-says-worldwide-it-spending-pace-surpass-36-trillion-2012

Atleast telecom spending on equipment and services is doing better than PC spending. Worldwide PC sales remained virtually flat in the second quarter, according to a new Gartner report. 

Gartner principal analyst Mikako Kitagawa said in a statement that the PC market in Q2 “suffered through its seventh consecutive quarter of flat to single-digit growth.” Kitagawa attributed the key reasons for this sales performance to economic uncertainty in some regions and a dropping interest on the part of consumers for PCs.

http://www.sci-tech-today.com/news/Global-PC-Sales-Flatline–Gartner-Says/story.xhtml?story_id=030003CLS2I6

SMBs Look to Hosting Companies for Cloud Computing Services

AMI Partners Report: 

According to AMI Partners (http://www.ami-partners.com/), hosting companies — pure-plays, telcos and MSOs — will provide nearly half of the cloud services purchased by U.S. small and midsize business.  The firm predicts SMBs will have invested a total of $34 billion in the cloud by the end of the year. According to the report, hosting providers such as telecom firms, MSOs and pure-plays are uniquely suited to handle the high level of customer service demanded by SMBs because of their long history of providing Web access solutions to the sector.

“A key reason that hosters are becoming a leading cloud channel for SMBs is because they have proven they can effectively handle critical infrastructure, while providing the necessary level of support,” said Monik Sheth, research analyst at AMI-Partners. “Poor service can be an immediate deal breaker for any company, and SMBs are no different.”

AMI Partners is including telecommunications providers (telcos and cable companies) in the “hosters” category is because many of the solutions offerings are beginning to overlap, especially around IaaS and related cloud offerings, Sheth told Channel Partners. “Telecom firms are making strategic plays in the hosting space, as you can see for example by M&A activity among major telecoms in the U.S. (e.g..Verizon acquiring Terremark and Time Warner Cable acquiring NaviSite),” he said.

SMB cloud services spend includes investments in IaaS, SaaS, web hosting, UC and remotely managed IT services. Two areas where AMI Partners found  SMBs see clear benefits, and are aggressively moving to the cloud, are hosted infrastructure, such as servers and storage, and remote management of IT systems and related applications. That’s because SMBs have very limited, if any, internal staff dedicated to managing technology, so deploying these solutions in the cloud, with the support of a trusted provider, is quickly becoming the norm, the research firm explained.

References:

http://www.ami-partners.com/index.php?target=news&mode=details&news_id=287#287

http://www.channelpartnersonline.com/news/2012/06/telcos-msos-hosters-to-get-half-of-u-s-smb-cloud.aspx

TELECOM-PRO Comment:

We see Savvis-Century Link and Terremark-Verizon as the telco leaders in providing cloud services to SMBs.  Of course, that’s why Century Link and Verizon acquired those two formerly independent companies!  It remains to be seen what competive telcos will do in the cloud space. Those include: TW Telecom, Level 3 Communications, AboveNet, XO Communications, Windstream, and Globe Telecom (amongst others).

Meanwhile, MSOs (multiple system operators)  are becoming a bigger threat to telcos in the business end services and wholesale market,  as more SMBs and wireless operators (e.g VZW) look for alternative providers to meet their needs.  We see Comcast Business as particularly strong in Carrier Ethernet and VoIP to SMB, but they haven’t announced anything definitive for cloud computing.

Perhaps, it takes web hosting and IT service management expertise that’s beyond the reach of most telco’s and MSOs.

What’s your opinion?

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