Cignal AI: Worldwide Optical Hardware Spending Increases; Huawei Remains #1 Vendor

by Scott Wilkinson and Andrew Schmitt, Cignal AI

Optical hardware spending grew in every region and for every business segment during 2Q2019, according to the most recent Optical Hardware Report from research firm Cignal AI. Huawei retained top market share worldwide and held steady despite a slowdown in China and increasing competitive and political pressures.

This quarter marked a turnaround for CALA, reversing multiple quarters of decline with a YoY surge of 30%. EMEA also grew with expansion across all product segments. Overall growth in North America was minor and would have been negative again if not for an enormous SLTE revenue increase this quarter. Finally, the rapid expansion in Japan for the past few quarters settled down to a more moderate pace with Ciena, NEC, and Huawei as the prime beneficiaries.

“Huawei managed to retain market share in what is typically its strongest quarter of the year,” said Scott Wilkinson, Lead Analyst at Cignal AI. “Despite the export ban of many optical components and the reports of competitive wins against Huawei in EMEA and APAC, Huawei market share remained steady.”
Cignal AI’s Optical Hardware Report is issued each quarter and examines optical equipment revenue across all regions and equipment types. The analysis is based on financial results, independent research, and guidance from individual equipment companies. Forecasts are based on overall spending trends for equipment types within the regions.
Additional Key Findings in 2Q19 Optical Hardware Report Include:
  • WDM Long Haul Spending Up – Long haul spending recovered in every region except Japan, as compact modular equipment and new high-speed coherent optics impact investments.
  • WDM Metro Declines in North America But Grows in All Other Regions – Factors contributing to the NA decline are the lower price per bit of new high-speed optics and competing priorities like the 5G rollout.
  • SONET/SDH Hangs On – Growth in APAC and EMEA offset SONET/SDH’s ongoing decline in NA. This growth comes from expansions and upgrades to existing networks; there are no new builds.
  • China’s Growth Slows — Growth in China appears dramatic due to the ZTE shutdown and the absence of revenue a year ago. Excluding ZTE’s results, growth slowed.
  • Coherent Optic Shipments Tracking to Reach Nearly 1 Million 100G Equivalent Ports in 2019 – This represents a 40% increase in bandwidth over 2018.
Interactive Optical Hardware Market Share Tracker
Cignal AI’s interactive Optical Hardware Market Share Tracker is available to clients of the Optical Hardware Report and provides quarterly up-to-date market data for real-time visibility on individual vendors’ results as they are released. Users can manipulate data online and see information in a variety of useful ways.
About the Optical Hardware Report
The Cignal AI Optical Hardware Report is published quarterly and includes market share and forecasts for optical transport hardware used in optical networks worldwide. In addition to the interactive tracker, analysis includes a detailed Excel database as well as PDF and PowerPoint summaries. Subscribers to the Optical Hardware Report also have access to Active Insight, Cignal AI’s real-time news service on current market events.
The report examines revenue for metro WDM, long-haul WDM and submarine (SLTE) equipment in six global regions and includes detailed port shipments by speed. Vendors in the report include Adtran, ADVA, Ciena, Cisco, ECI, Ekinops, Fiberhome, Fujitsu, Huawei, Infinera, Mitsubishi Electric, NEC, Nokia, Padtec, Tejas, Xtera, and ZTE.
full report description, as well as articles and presentations, are available on the Cignal AI website.
About Cignal AI
Cignal AI provides active and insightful market research for the networking component and equipment market and the market’s end customers. Our work blends expertise from a variety of disciplines to create a uniquely informed perspective on the evolution of networking communications.
Contact Us/Purchase Report:
[email protected]

U.S. 5G Smartphone Sales Disappoint; Sticker Shock Pricing for 1st Wave of 5G phones

5G Smartphone Sales in U.S. are minuscule:

According to BayStreet Research via Lightreading, U.S. wireless network operators sold just 29,000 5G devices by the end of the second quarter. And the firm predicts that the number won’t grow much throughout 2019.

“It’s very small volume,” said Cliff Maldonado, the firm’s founder. “The value proposition [for 5G devices] isn’t clear.”

Pre-standard 5G is definitely in its infancy in the U.S. It only launched a few months ago, and it’s only available in a handful of cities on just a few phones. And those phones aren’t cheap: The Samsung Galaxy S10 5G for Verizon starts at an eye-popping $1,300, for example.

U.S. 5G Smartphone Sales (BayStreet Research):

According to BayStreet Research, 5G phones haven't been selling very well.

BayStreet Research says 5G phones haven’t been selling very well.

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Unlisted in the above chart is the 5G Moto Mod, an accessory that customers can snap on to a handful of existing Motorola smartphones that will allow them to access Verizon’s 5G network. Maldonado estimated just 1,000 to 2,000 sales of that gadget.

BayStreet obtains its figures from public and private data sources. Maldonado pointed out that the company’s third and fourth quarter figures are estimates. He also noted that the forecasts of 5G phone sales in the coming quarters don’t — and can’t — include as-yet-unannounced devices.

Many in the industry have argued that the rollout of 5G in the US could ultimately take up to ten years, considering operators will need to deploy 5G across more potentially millions more small cells, using a wide range of spectrum bands and will have to invest in technologies like mobile edge computing.  For now, in the early days of 5G, most potential customers are staying on the sidelines.

Editor’s Note:

It’s extremely important to realize that a given 5G smartphone will only work on one carrier’s network, e.g. an AT&T 5G phone won’t work on Verizon’s 5G network.  That’s because each pre-standard 5G wireless carrier uses different RIT specs (most are based on 3GPP Rel 15 NR NSA for the data plane with LTE signaling for the control plane and EPC for the mobile packet core) and different frequencies.  So your so called 5G phone will fall back to 4G if you are not in range of your carrier’s pre-standard 5G network.  That means limited mobility and certainly none when you travel to a city where your carrier doesn’t have 5G coverage.

All these pre-standard 5G deployments will be trashed and ditched when the IMT 2020 standard is completed and implemented in new standard IMT 2020 phones and base stations/small cells.

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Separately, IHS-Markit reports that the cost of the initial wave of 5G phones is dramatically exceeding expectations, with the price premium as much as 29 times higher than many consumers anticipate, according to a new IHS Markit survey examining consumer perceptions regarding the technology.

A total of 91 percent of survey respondents said they expect to pay more for 5G devices compared to existing 4G LTE smartphones. Three quarters of respondents stated they foresee paying an additional 10 to 25 percent for a 5G-capable phone. With the average sales price (ASP) of a smartphone amounting to $319 in 2019, a 10 percent hike in pricing would add $32 to the cost, while a 25 percent increase would boost it by $80.

However, the actual pricing of the first wave of 5G phones is far higher. For instance, Samsung’s S10 5G phone is retail priced at $1,300, a 335 percent premium compared to the $388 average for the company’s existing 4G smartphone models. In dollar terms, this would represent a $912 increase in price, an order of magnitude higher than consumers’ expectations.

It should be noted that this comparison is of a flagship smartphone price against an industry ASP. Naturally, newer technologies almost always come first to premium smartphones, which typically are two to three times as much as industry ASP. Also, given the nature of 5G radio design, these early 5G smartphones are configured with larger-than-typical displays and packed with extra features such as time-of-flight (ToF) cameras to enable AR applications. All of these extras do contribute to a higher-than-expected retail price from a consumer perspective.

In another example, the Huawei Mate 20 X 5G smartphone carries a retail price of $1,200, a more than 400 percent premium compared to $295 for the company’s 4G models.

This pricing discrepancy could instill sticker shock among many consumers. While such pricing premium is not likely to impact early adopters, it could slow sales of 5G devices to the wider, more mainstream consumer market.

“The 5G market is primed for massive growth, with the transition to the new technology expected to occur at a much faster pace than any previous wireless generation during the first five years of deployment,” said Joshua Builta, senior principal analyst at IHS Markit. “However, as with each new wireless generation, the first wave of phones carries sky-high costs because of the additional electronics required to support the enhanced features. With smartphone brands passing these additional costs down to consumers, many buyers will be turned off by the high prices and will wait until they come down before purchasing a 5G phone.”

Expectation of price premium for 5G smartphones:

Fast wireless technology makes slow initial progress:

Global 5G handset shipments are expected to soar to 424.5 million units in 2023. However, shipments will start rather modestly, amounting to just 9.5 million in 2019—the first year of deployment—and only 73.7 million in 2020. This represents a slower initial rate than for 4G LTE when it first deployed a decade ago, although the longer-term outlook for subscriber growth for 5G is more optimistic than for 4G.

The early 5G smartphones analyzed by IHS Markit demonstrate why their cost and pricing is so elevated. For example, some 5G phones include a highly complex radio-frequency (RF) subsystem designed to support millimeter wave capability for high-speed data transfer. Specifically, in the U.S., the Moto Z3 with 5G Mod and a version of the Samsung Galaxy S10 5G both integrate multiple separate millimeter wave antenna modules that are strategically placed throughout the device to allow clear signal reception. When considering that most smartphone designs employ just one antenna module, it’s easy to see how this redundant design drives up costs significantly.

Lower prices for a bigger market:

However, just as occurred in the 4G LTE era, 5G phone pricing is expected to decline quickly. Prices will begin to decrease next year as phone OEMs use more efficient designs employing multimode modems. Within the next few years, prices will fall to between the $700 to $800 range, making them more affordable for price-conscious consumers.  Elsewhere, markets such as China will deploy a standalone (SA) 5G network which will further simplify RF front-end design requirements to further push down the industry ASP.

Consumer expectations:

Many consumers equate 5G with faster data speeds and aren’t aware of the technology’s other benefits. As a result, their low expectations for pricing premiums may not take into account all of the advantages and allures of 5G technology.

For example, improved immersive entertainment experiences like virtual reality (VR) have been cited as a key benefit of 5G. The 5G standard eventually can provide the kind of ultra-low latency that VR requires. However, fewer than 30 percent of survey respondents said they would increase their use of VR with the arrival of 5G.

As the market waits for prices to decline, brands may be able to overcome consumer reticence regarding pricing by promoting the other attributes of 5G beyond speed.

About IHS Markit Digital Orbit:

IHS Markit’s Digital Orbit report summarizes the results of a survey on how consumers perceive 5G and how they intend to use the new technology. The survey was conducted May 22-27 among 2,031 respondents, 95 percent of whom were US-based. The median age of the survey respondents was 43, and 63 percent lived in urban areas.

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Park Place Technologies on network monitoring, predictive fault diagnosis and repair; Entuity acquisition adds analytics

by Michael Cantor, CIO, Park Place Technologies

Introduction:

While network monitoring is a key component of predictive fault diagnosis and repair, it’s just one part of an overall solution to the network maintenance problem.  Network monitoring, depending on the level of sophistication, can supply multiple data streams that contribute to fault diagnosis and repair. At the simplest level, a network monitor can notify on circuit up/down, overall bandwidth utilization on particular circuits, and individual network gear parameters, such as CPU usage. At the next level of sophistication, a network monitor can perform flow analysis and deep packet inspection to look for configuration issues or unexpected application traffic. And last, a network monitor may provide service delivery monitoring, combining all of the above to arrive at fault diagnosis from end-to-end across the network.

Network monitoring currently lags for the various cloud vendors, so providing coverage for IaaS (Infrastructure as a Service) installations in the cloud as part of the overall solution is the next major area of development among the network monitors. That said, to get a truly useful picture of IT operations, an overall platform is needed to combine the data streams from all types of monitoring: hardware, operating system, database, and application, along with network monitoring to really get predictive of a fault.

For example, a performance problem is likely to be noted in the application first, and it can take days of effort to trace that performance problem to a defective or over-utilized piece of network gear that is intermittently losing packets. Combining all these inputs together, along with an AI layer, results in a platform that can make a difference in daily IT operations: accelerating fault diagnosis and reducing false alarms.

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The ParkView™ platform:

It monitors customer hardware 24/7.  When a fault is detected, ParkView™ instantly creates a ticket including the details necessary to resolve the issue, so there’s no need to call.  ParkView™ identifies the exact nature of the issue and all relevant details to resolve it. ParkView™ will suppress all non-vital events including soft errors and status updates – only notifying you of issues that are pressing in nature.

Over time, ParkView™ leverages machine learning to detect faults before they even occur (i.e. predictive fault detection).

Other ParkView™ features include:

  • Vendor-agnostic interface supports a wide range of OEMs, platforms, OS and generations
  • Real-time visibility via Central Park customer portal
  • Security features are based on your company’s unique requirements and all data transmitted to ParkView™ is SSL encrypted

 

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Case Study –Proactive detection of hardware faults in a telco environment:

Cincinnati Bell has seen demonstrable savings of time and money since adopting ParkView™, a service that proactively detects faults in storage, server and networking hardware.

ParkView™ is a revolutionary new remote service that proactively detects equipment hardware faults 24/7 across storage, server, and networking products. The related alerts are then securely transmitted to Park Place Technologies’ technical operations, enabling more timely and accurate failure diagnosis, part identification, and necessary repair actions. The company was able to save 8 hours per week not having to travel to remote data center to search for flaws.

A video describing the case study can be viewed here.

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Importance of Entuity Acquisition:

Earlier this month, Park Place Technologies acquired Entuity, a specialist firm that offers networking monitoring and visibility, as well as asset control software.  Entuity has offices in Boston and London.  It’s s an established player in the network performance monitoring sector, where it provides the software analytics needed to keep networks performing, as well as visibility into issues before they impact business services.

For over 20 years, Entuity has focused on network performance monitoring to ensure uninterrupted service delivery. Entuity provides the analytics needed to keep networks performing and visibility into issues before they impact business services. Entuity is a perfect complement to Park Place Technologies as both organizations are customer-centric, have a deep-seated commitment to their employees and are laser-focused on maximizing customer up-time.

Park Place Technologies is the global leader in third-party maintenance for data center hardware, and this software acquisition will be a key component of its multi-vendor service delivery model. Following the acquisition, Park Place will be the only multi-vendor, global hardware maintenance provider that offers customers monitoring, automated maintenance, Network Operations Center (NOC) services, event management, probable cause and IT Data Analytics across a single pane of glass.

“This acquisition represents a milestone for Park Place Technologies as we welcome Entuity, a highly regarded network performance monitoring provider into the Park Place family,” said Chris Adams, President and CEO, Park Place Technologies. “When Entuity is integrated with our award winning ParkView™ monitoring product, we will deliver enhanced network visibility and NOC services, driving uptime for our global customer base.”

“It is exciting to see how this partnership will yield mutual benefits for both companies and their customers across the globe,” said Stephen Woodard, President and CEO, Entuity. “Entuity’s auto discovery and inventory capabilities, live topology, event management and probable cause analysis strengthens Park Place’s existing innovations and industry-leading solutions such as ParkView™.”

https://www.prnewswire.com/in/news-releases/park-place-technologies-strengthens-its-vision-with-groundbreaking-deal-for-network-analytics-software-provider-entuity-879327734.html

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Acknowledgement:

Thanks to Catie Gehlert of Global KWT for facilitating publication of this article.

CenturyLink CTO on Network Virtualization; Major Investment in Edge Compute Services

Andrew Dugan, senior vice president  and chief technology officer, CenturyLink, Inc. presented his company’s views on network virtualization and related topics at the Cowen and Company 5th Annual Communications Infrastructure Summit in Boulder CO., on Aug. 13th.  You can listen to the audio webcast replay here.

Dugan said he doesn’t know what AT&T means when the mega carrier says it’s virtualizing 75% of its core network by the end of 2020.   “I’d like to figure out what AT&T means by 75% virtualization,” said Dugan. “I don’t get it. The concept of virtualizing the core router or an optical platform, that’s a lot of cost of your network to provide services. We’re not working on virtualizing that stuff.

Dugan said CenturyLink is focused on virtualizing systems that enable its customers to turn up and turn down services on demand, and it’s also focused on virtualization at the edge of its network. He said the company likes the benefits of putting a white box device on the customer premises and “letting a customer turn up a firewall or an SD-WAN appliance or a WAN accelerator whenever they want.”

Earlier this week, CenturyLink announced the rollout of its edge compute-focused strategy, beginning with a several hundred-million-dollar investment to build out and support edge compute services. This effort – which includes creating more than 100 initial edge compute locations across the U.S., and providing a range of hybrid cloud solutions and managed services – enables customers to advance their next-gen digital initiatives with technology that integrates high performance, low-latency networking with leading cloud service provider platforms in customized configurations.

“Customers are increasingly coming to us for help with applications where latency, bandwidth and geography are critical considerations,” said Paul Savill, senior vice president, product management, CenturyLink. “This investment creates the platform for CenturyLink to enable enterprises, hyperscalers, wireless carriers, and system integrators with the technology elements to drive years of innovation where workloads get placed closer to customers’ digital interactions.”

This expansion allows businesses and government agencies to leverage a highly diverse, global fiber network with edge facilities designed to serve their local locations within 5 milliseconds of latency. With this infrastructure, companies will be able to complete the linkage from office location to market edge compute aggregation to public cloud and data centers with redundant and dynamically consumable network.

“Digital transformation is gaining momentum as enterprises across all verticals look to technology to improve operational efficiency and enhance the customer experience,” said Melanie Posey, Research Vice President and General Manager at 451 Research. “As business processes become increasingly distributed, data-intensive, and transaction-based, the IT systems they depend on must be equally distributed to provide the necessary compute, storage and network resources to far-flung business value chains.”

Dugan said the edge compute platform plays into the company’s virtualization efforts, allowing customers the ability to turn up and turn down Ethernet services, increase capacity, change vLANs, and configure their services on-demand.

Related image

“That, to me, is where NFV and SDN comes in. We haven’t put a number on the percent of the network. We’re more focused on that customer enablement,” he said.

“When you build out an NFV platform, you’ve got the cost of the white box, you have the cost of the management or virtualization software that runs within the white box, and you have the cost of the virtual functions themselves.  If you’re running one or two applications on premise, it’s not cheaper. The real value from NFV comes in the flexibility that it provides you to be able to put a box out there and be able to turn up and turn down services. It’s not a capex reduction…It’s a reduction in operating costs because you’re not having to roll trucks and put boxes out,” Dugan added.

CenturyLink says its “thousands of secure technical facilities combined with its network of 450,000-global route miles of fiber, expertise in high-performance cloud networking, and extensive cloud management expertise make this investment in the rapidly emerging edge compute market a natural evolution for the company.”

Key Facts (source: CenturyLink):

  • CenturyLink today connects to over 2,200 public and private data centers and over 150,000 on-net, fiber-fed enterprise buildings.
  • CenturyLink’s robust fiber network is one of the most deeply peered and well-connected in the world, with over 450,000 route-miles of coverage.
  • CenturyLink is expanding access to its services by expanding network colocation services in many key markets to enable customers and partners to run distributed IT workloads close to the edge of the network.

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CenturyLink References:

CenturyLink CEO Jeff Storey: “Expanding our fiber footprint is major focus; Fiber beats wireless, whether it’s 5G or not”

IHS Markit: CenturyLink #1 in the 2019 North American SIP Trunking Scorecard

VSG’s U.S. Carrier Ethernet LEADERBOARD: CenturyLink #1, AT&T #2; U.S. CE port base grew >12%

CenturyLink offers Multi Cloud Connect L2 Service for Fiber-fed Buildings

CenturyLink/Level 3 Says Its Fiber Assets will attract SMBs

 

Samsung (with AT&T) Tests How 5G Can Improve Chip-Making

By Sara Castellanos of the Wall Street Journal

Samsung Electronics Co. is testing how 5G wireless networks can speed up connections at its chip-making factory in Austin, Texas, a pilot that aims to prove 5G is more than a buzzword. The company is experimenting with the new technology to show what ultra-fast speeds can do at its Austin chip factory

The company has teamed up with AT&T Inc. ’s communications division to develop a customized 5G network to experiment with how it could be used in chip manufacturing.

The fifth generation of cellular networking, 5G is designed to replace current 4G technology, also known as LTE. The ultrafast speeds and reduced lag that will come with 5G will buttress new applications such as augmented reality and self-driving cars. Peak download speeds using 5G are expected to be about 100 times as fast as with 4G.

The transformation that will come from widespread commercial 5G deployments in manufacturing, logistics, transportation and energy is still about a decade away, experts have said. That’s partly because it will take time to roll out the infrastructure to achieve full 5G coverage.

In the meantime, Samsung and other companies are testing 5G’s potential in limited pilots to show what the technology can do.

“We’re still in the experimentation phase, but we’re hopeful there’s value,” said Alok Shah, vice president of networks strategy, business development and marketing at Samsung Electronics America, the company’s U.S. unit.

Factories will be a big beneficiary of 5G connections, said Andre Fuetsch, chief technology officer for AT&T Communications, AT&T’s biggest division.

“We see 5G being a great solution for solving a lot of the Wi-Fi issues that typical factories have today,” he said. The technology, for example, could be used on manufacturing floors to power more reliable connections for computer-vision-scanning equipment that checks product quality.

AT&T has also rolled out consumer 5G networks in about 20 U.S. cities.

Samsung Electronics America and AT&T have invested millions of dollars in 5G innovation at Samsung’s chip-manufacturing facility in Austin. Thousands of employees work at the chip factory, which is the size of about 10 football fields, Mr. Shah said.

Chip-making uses a lot of water and toxic chemicals; 5G could help chip factories cut waste and alert workers to safety hazards.

For example, 5G would allow more sensors to be installed to detect air quality, Mr. Shah said. Streaming real-time data from the sensors over 5G networks would mean that a control center can immediately detect serious air-quality hazards and move people out of harm’s way. Sensors in factories today can’t rely on existing wireless networks to pass along warnings to a control center, Mr. Shah said.

“Being able to put thousands of sensors within a relatively small space is hard for other [networking] technologies to support,” Mr. Shah said. Certain networks can only support a finite number of devices. Fifth-generation wireless networks could support 1 million devices per square kilometer, up from about 100,000 devices per square kilometer with 4G LTE, he said.

Sensors on pumps and valves could also stream data about water usage over 5G networks so the facility can improve the efficiency of its water usage in real time and reduce waste.

Using 5G connections, workers could also learn how to repair equipment on the factory floor through augmented and virtual-reality headsets without any buffering or lags.

Other companies including New York Times Co. and German engineering firm Robert Bosch GmbH are testing 5G in pilots. The market for 5G, including related network infrastructure, is forecast to grow to $26 billion in 2022 from $528 million in 2018, according to research firm International Data Corp.

The tests are often “showcase demonstration pieces,” useful for proving that 5G could generate revenue through new services or make processes more efficient, said Jason Leigh, research manager for mobility and 5G at IDC.

“The sooner you can get something tangible, it makes it easier to have that discussion at a C-suite and board level about what 5G really is, and it’s not just this fad,” Mr. Leigh said.

Write to Sara Castellanos at [email protected]

https://www.wsj.com/articles/samsung-tests-how-5g-can-improve-chip-making-11565813658

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Last September, AT&T and Samsung created the US’s first manufacturing-focused 5G “Innovation Zone” in Austin, TX.  The zone, designed to test 5th generation wireless broadband technology, will be on Samsung Austin Semiconductor’s 160-acre campus in north Austin. The site will feature AT&T’s 5G wireless technology along with Samsung’s 5G network equipment, according to an announcement Wednesday from the two companies.

Technology experts say 5G — which is essentially ultra high-speed wireless connections — will not only power future waves of mobile devices, but also will evolve technology in other industries like automotive and health care. Companies expect 5G to be up to 100 times faster than the current 4G networks.

“This collaboration with Samsung Electronics America and AT&T will help us test how a 5G network can improve mobility, performance and efficiencies within our plant,” Sang-Pil Sim, president of Samsung Austin Semiconductor, said in a statement.

South Korea-based Samsung has operated in Austin since 1997. About 3,000 employees work in the 2.45 million-square-foot Austin chip making plant. Samsung has invested $17 billion in its Austin campus through the years.

https://www.dallasnews.com/business/att/2018/09/26/att-teams-samsung-launch-5g-innovation-zone-austin

 

Kagan: Broadband Wireline Internet growth slowing with cable leading telcos; U.S. vs Europe cord cutters compared

Broadband service providers continued to gain customers ahead of widespread competition from pre-standard 5G wireless offerings, but growth is slowing as nearly four out of five homes in the U.S. now subscribe to a wireline internet connection, according to a new report released today.

Kagan, a media research group within S&P Global Market Intelligence, estimates cable and telecom providers combined added 339,000 residential subscribers in the second quarter. The momentum was largely driven by the cable industry. Cable operators saw the rate of growth shrink on a sequential and annual basis, but they did not however lack market share gains, adding nearly half a million new residential customers versus a net loss for the telecoms of 155,000 customers.

Ian Olgeirson, Research Director at Kagan commented: “We estimate wireline broadband penetration increased slightly to 78.5% of occupied households. Cable’s residential gains did not match the levels from the previous or year-ago quarters, but net adds in the trailing 12 months are still higher at 2.8 million when compared to the same period in 2018. Telco broadband slumped in the second quarter, returning to a pattern of six-figure losses after holding steady in the first quarter. Growth in telco fiber-to-the-home connections was not sufficient to overcome losses to legacy copper and fiber-to-the-node DSL connections.”

Separately, Kagan says that Americans are not the only ones cutting the cord. The vibrant and free-to-air broadcasting options available in most of the EU countries we surveyed makes paying for TV a hard sell, subscription video on demand or otherwise.

For instance, when Kagan asked cord cutters and “cord nevers” why they cut the cord or never added a video service, 35% of German cord cutters/nevers answered that “rabbit ears” fulfill their video entertainment needs. All respondents from EU countries surveyed scored above 15% on this metric. But just 10% of U.S. survey-takers felt the same way.

Kagan thinks the longer history with pay TV in the U.S., one that was forecast by Paul Kagan in the late 1960s, has left Americans with more paid TV options than Europeans, leading to fewer viewers stateside who mostly use over the air, or OTA.

But the longer pay TV history in the U.S. does not imply Americans like paying for the service.

Nearly half of American cord cutters/nevers said price was the main reason they cut the cord or never connected, the highest rate among all seven countries we reviewed. Americans pay close to $100 per month on average for traditional multichannel video services, with EU countries coming in lower. Sweden’s average monthly fee for video is under $10 and survey-takers there were consequently less concerned with pricing. A significant factor in lower pay TV access prices in Europe is that sports and premium channels are only included in top TV tiers, with basic packages boosted by a large number of OTA (over the air) channels.

U.S. survey-takers were also the only ones to say online video services were more important than free OTA in terms of why they cut the cord or never added a cord. For instance, while 10% of Americans said rabbit ears were enough reason to cut the cord, 14% said the same about online video services, including Netflix. Again, this could be a case of the U.S. being first to market with online video services and remaining relatively ahead of the pack.

As traditional media companies look towards a digital future it’s important to remember that what matters to US consumers might matter less overseas.

About S&P Global Market Intelligence:

At S&P Global Market Intelligence, we know that not all information is important—some of it is vital. We integrate financial and industry data, research and news into tools that help clients track performance, generate alpha, identify investment ideas, understand competitive and industry dynamics, perform valuations and assess credit risk. Investment professionals, government agencies, corporations and universities globally can gain the intelligence essential to making business and financial decisions with conviction.

S&P Global Market Intelligence is a division of S&P Global (NYSE: SPGI).  For more information, visit www.spglobal.com/marketintelligence

GSA Update and Analysis: 5G Devices Ecosystem – August 2019

  • The GSA Research team has identified 100 announced 5G devices in total, excluding regional variants and prototypes not expected to be commercialised.In the first half of 2019, the number of announced 5G devices grew rapidly, starting with a few announcements and then gathering pace as operators in various parts of the world launched their first commercial 5G services. We can expect the device ecosystem to continue to grow quickly and GSA will be tracking and reporting regularly on 5G device launch announcements. Its GAMBoD database will contain key details about device form factors, features and support for spectrum bands. Summary statistics are released in this regular publication. By the first week of August, GSA had identified:
    • Thirteen announced form factors (phones, hotspots, indoor CPE, outdoor CPE, laptops, modules, snap-on dongles/adapters, enterprise routers, IoT routers, drones, a switch, a USB terminal and robot).
    • Forty-one vendors that had announced available or forthcoming 5G devices, including sub-brands separately (plus four in partnership with Sunsea).
    • One hundred announced devices, up from 90 at the end of June (excluding regional variants, re-badged devices, phones that can be upgraded using a separate adapter, and prototypes not expected to be commercialised):
    • 26 phones (plus regional variants); at least nine of which are now commercially available
    • eight hotspots (plus regional variants); at least three of which are now commercially available
    • 26 CPE devices (indoor and outdoor, including two Verizon-spec compliant devices) at least eight of which are now believed to be commercially available
    • 28 modules
    • two snap-on dongles/adapters
    • two routers,
    • two IoT routers
    • two drones
    • one laptop
    • one switch
    • one USB terminal
    • one robot

Here are the commercially available 5G devices as listed in the GSA’s latest report August 2019:

  • HTC 5G Hub (hotspot)
  • Huawei 5G CPE 2.0 (indoor and outdoor customer premises equipment, or CPE)
  • Huawei 5G CPE Win (outdoor and window CPE)
  • Huawei 5G CPE Pro (indoor CPE)
  • Huawei Mate X (phone)
  • Huawei Mate 20x 5G (phone)
  • Inseego R1000 Home Router/MiFi IQ 5G (fixed wireless indoor CPE)
  • Inseego MiFi M1000 5G Mobile Hotspot (hotspot)
  • LG V50 ThinQ (phone)
  • Motorola 5G Moto Mod Snap-on (dongle)
  • Netgear Nighthawk M5 Fusion MR5000 (aka Nighthawk 5G Mobile Hotspot) (hotspot)
  • Nokia Fastmile 5G Gateway CPE (indoor/ outdoor CPE)
  • OnePlus OnePlus 7Pro 5G (phone)
  • Oppo Reno 5G (phone)
  • Percepto Drone-in-abox (drone)
  • Samsung SFG-D0100 (indoor CPE)
  • Samsung Galaxy S10 5G (phone)
  • SIMCom Wireless SIM8200- EA-M2 (module)
  • SIMCom Wireless SIM8200G (module)
  • Xiaomi Mi Mix 3 5G (phone)
  • ZTE Axon 10 Pro 5G (phone)
  • ZTE 5G Indoor CPE MC801 (indoor CPE)

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What versions of 5G have been deployed/announced? 
After downloading and reading the GSA report, I noticed a huge omission: the version of 5G is not disclosed for any of the “pre-IMT 2020 standard 5G” deployments.  Most are likely to be based on 3GPP release 15 “5G NR” for the data plane NSA (LTE signaling and EPC).  However, many of the 5G fixed wireless deployments (like Verizon’s and C-Spire) are proprietary.

5G silicon? 

Also of note is that within the 5G devices, there are only four 5G silicon vendors chipsets – Qualcomm is by far the largest selling 5G SoC’s/IP, then Mediatek selling on the merchant market, whereas Huawei and Samsung design their own silicon for their 5G terminals/handsets and base stations.

Note while there is not yet any “Intel inside” 5G, Intel has sold its 5G smartphone modem silicon business to Apple recently for $1B.

If 5G were truly such a hot market, why aren’t there other semiconductor vendors pursuing it? 

Posted in 5G Tagged

IHS Markit: CenturyLink #1 in the 2019 North American SIP Trunking Scorecard

By Diane Myers, senior research director, IHS Markit

Highlights:

  • CenturyLink leads the market for session initiation protocol (SIP) trunking with the largest installed base of all North American providers.
  • Twilio has been a disruptor in the SIP trunking market and placed second in the scorecard due to solid market momentum.
  • Verizon and AT&T were #3 and #4, respectively.

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Editor’s Note:

SIP (Session Initiated Protocol) trunking  is a method of sending voice and other unified communications services over the internet.  It works with an IP-enabled PBX (private branch exchange). SIP trunking replaces traditional telephone lines or PRIs (Primary Rate Interface).connects both IP and analog devices via the Internet, eliminating the need to maintain separate voice circuits or replace legacy equipment.

Before SIP became a popular and reliable method of transmitting voice signals, telephone calls were carried over the Public Switched Telephone Network (PSTN). The PSTN is a circuit switched network, which requires a physical connection between two points to complete a call.

SIP trunks are virtual phone lines that enable users to make and receive phone calls over the internet to anyone in the world with a phone number. SIP trunks utilize a packet switch network, in which voice calls are broken down into digital packets and sent across a network to the final destination.

Each SIP trunk supports SIP channels. A SIP channel is equivalent to one incoming or outgoing call. A SIP trunk can hold an unlimited number of channels, so users only need one SIP trunk no matter how many concurrent calls they expect. The number of channels required depends on how many calls the business will make at any one time.

References:

https://www.sip.us/blog/latest-news/sip-trunking-101-the-fundamentals/

https://www.nextiva.com/blog/sip-trunking.html

 

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IHS Markit analysis:

In its 2019 SIP Trunking North America Scorecard, IHS Markit analyzed and ranked the top SIP trunking providers in North America. For the fourth year in a row, CenturyLink leads the SIP trunking market with solid growth and the largest installed base of trunks. CenturyLink has done extensive work over the past two years bringing together its assets with those of Level 3, a company it acquired in 2017, to build a market-leading service portfolio and customer base.

In this year’s scorecard, Twilio made another jump to the second-ranked position because of its strong financial score and the continued growth of its installed base. Twilio has been a market disruptor with its Elastic SIP Trunking service, which has grown to attain a sizable installed base. The strong growth of Twilio’s Elastic SIP Trunking service reflects the widespread appeal of flexible consumption-based pricing.

Just a few years ago, there was little differentiation in the SIP trunking market. Fast forward to today, and there is a stark difference between traditional trunking services and the new on-demand trunks. Traditional trunking remains grounded in the old world of contracting for voice networking. In contrast, with on-demand trunks, customers simply pay for what they use and never need to worry about capacity planning.

SIP Trunking North America Scorecard:

In the 11th annual SIP Trunking North America Scorecard, IHS Markit analyzes the top-10 North American SIP trunking service providers: CenturyLink, Twilio, Verizon, AT&T, IntelePeer, Fusion, Rogers, Voyant, Windstream and Sprint. The criteria used in this analysis include market share, financial strength, market share momentum, service development and support options.

Huawei to help create China’s first open source software foundation; unveils Honor Vision smart screen with Harmony OS

Huawei Technologies Co. said today that it plans to partner with other companies to set up China’s first open-source software foundation, which is expected to begin to operate in a month or two to expand the nation’s software community.

Wang Chenglu, president of the software department at Huawei’s consumer business group, said software development relies on open-source codes and communities. “If China does not have its own open-source community to maintain, manage and host these open-source codes, the domestic software industry will be vulnerable in the face of uncontrollable factors,” Wang said. The first open-source foundation in China will be nonprofit and open to all companies and software developers. “The plan is going forward very fast. It may officially operate in one or two months,” Wang said. Wang added it is widely agreed that open-source communities are created to be fair and equitable for all, but now have become a means of making a power play between countries.

The first open-source foundation in China will be nonprofit and open to all companies and software developers. [Photo/IC]

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Last month, Nat Friedman, CEO of GitHub, which is owned by Microsoft, said on Twitter that GitHub is subject to US trade law just like any company that does business in the US. GitHub has enforced restrictions to prevent users in sanctioned countries from accessing private repositories and the GitHub Marketplace and from maintaining private, paid organization accounts, technology news website TechCrunch reported.

Maral Khosroshahi, who identified herself as a deep-learning scientist at Microsoft and founder and chairwoman of Iranian Women in Computing, said in a post on Twitter on July 27th that GitHub suspended all accounts of Iranian developers without any prior notice. “This is a shame, … especially for those who keep saying that sanctions are not supposed to affect ordinary people,” Khosroshahi said in the post, adding that those views are her own.

Xiang Ligang, director-general of the telecom industry association Information Consumption Alliance, said the GitHub incident sent a warning to Chinese professionals that heavy reliance on U.S.-led open source communities may carry risks.

The open source plan also came after Huawei unveiled its in-house operating system Harmony OS on Friday, with the idea of using it in smart TVs, automobiles, wearables and other hardware over the next three years. Lyu Tingjie, a telecom professor at Beijing University of Posts and Telecommunications, said Huawei decided to build Harmony into an open-source system because it knows that support from a wide range of partners is needed to build a robust ecosystem. “The foundation plan, if well-executed, will help accelerate the development of Huawei and China’s overall software industry,” Lyu said.

For more information contact:

[email protected]

China Daily Multimedia Co. Ltd.

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George Zhao, president of Huawei’s sub-brand Honor, unveils Honor Vision series during the Huawei Developer Conference held in Dongguan, South China’s Guangdong province on Aug 10, 2019. Honor Vision is the world’s first smart screen equipped with HarmonyOS, or Hongmeng in Chinese, Huawei’s open-source operating system. [Photo/Xinhua]

“Huawei will continue to lead a broader effort to build China’s software developer ecosystem and complete industry chain for the electronic information industry, rather than just launch its OS,” Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times.

The HarmonyOS is an open-source system, but without the support of most application developers, it can’t grow at a rapid pace and neither can the industry, Xiang said.  The HarmonyOS was initially seen as an alternative plan to deal with the risks of losing access to Google’s Android software and overseas market share after the US attack. Huawei is confident in keeping its overseas market share and displayed an ambition to make the HarmonyOS successful.

Richard Yu Chengdong, CEO of Huawei’s consumer business, said that the HarmonyOS can make Huawei’s devices functional again overnight, if the Android OS on the devices fails.  Huawei has obviously entered a whole new stage of fully developing its OS, developer ecosystem and more terminals equipped with the OS. It will eventually build its Internet of Things based on its leading communication systems, rather than just focusing on mobile phone products, a veteran industry analyst told the Global Times on condition of anonymity.

References:

http://www.chinadaily.com.cn/a/201908/13/WS5d51ed9ea310cf3e35565513.html

http://www.chinadaily.com.cn/a/201908/12/WS5d512715a310cf3e35565454.html

http://www.globaltimes.cn/content/1161064.shtml

 

China Mobile Explores 5G Tie-Up With National Cable TV Operator

by Liu Yanfei and Yang Ge of Caixin Global

China Mobile Ltd., the world’s biggest wireless carrier by subscribers, said it is talking with a recently formed national cable TV operator about cooperation in upcoming 5G networks and services, as it looks for new income sources to jumpstart its stagnating revenue.

China Mobile controls about 60% of its massive home market, making it flush with cash for aggressive spending on a state-of-the-art 5G network that has become a recent top priority for Beijing. By comparison, China Broadcasting Network Corp. was formed only five years ago by cobbling together many of the nation’s regional cable TV operators, and is relatively cash poor.

China Mobile and its two peers, China Telecom Corp. Ltd. and China Unicom Telecommunication Corp. Ltd., all received 5G licenses when the regulator awarded them in June, a move that was widely expected. But many industry watchers were surprised when China Broadcasting also received a 5G license because the company is relatively cash-poor and also has little or no experience in wireless services.

China Mobile had previously made known its desire to work with China Broadcasting, even though Unicom and China Telecom opposed such a move. China Mobile Chairman Yang Jie told Caixin on Thursday that talks between the two sides have taken place on building and sharing 5G networks, but he added there is nothing to reveal just yet.

“Building and sharing 5G networks is something the nation also supports, and businesses are also quite willing,” he told Caixin on the sidelines of an event to discuss the company’s latest financial results, which were also released on Thursday.

China Mobile Chairman Yang Jie says Thursday in Hong Kong that his company and China Broadcasting have discussed building and sharing 5G networks. Photo: VCG

China Mobile Chairman Yang Jie says Thursday in Hong Kong that his company and China Broadcasting have discussed building and sharing 5G networks. Photo: VCG

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A collaboration with China Broadcasting would give China Mobile access to one of the country’s biggest providers of programming via the former’s vast cable network. Such a tie-up could help to reinvigorate China Mobile’s revenues, which have stagnated in recent years as demand for its core wireless voice and data services starts to mature.

On Thursday, China Mobile reported interim results that showed the company’s revenue dipped by 0.9% to 204.4 billion yuan ($29 billion) in this year’s second quarter, while its profit plunged 18.8% to 32.4 billion yuan, according to calculations by Caixin.

China Broadcasting was formed in 2014 by combining many of the country’s regional cable-TV operators. It was originally set up to run cable TV networks, but was granted a license to operate internet and telecom services in 2016.

Before issuing 5G licenses in June, China’s telecom regulator called a meeting with each of the three big carriers’ top officials in charge of network construction, a source close to the Ministry of Industry and Information Technology (MIIT) previously told Caixin. China Mobile raised its hopes of working together with China Broadcasting on that occasion, even though Unicom and China Telecom opposed.

As the nation’s dominant carrier, China Mobile is spending the most aggressively on 5G. Figures from the company indicate it now plans to spend about 24 billion yuan on the network this year. By comparison, Unicom has said it plans to spend 6 billion yuan to 8 billion yuan on 5G this year, while China Telecom has said it plans to spend about 9 billion yuan.

Contact reporter Yang Ge ([email protected]; twitter: @youngchinabiz)

Original article athttps://www.caixinglobal.com/2019-08-09/china-mobile-talks-5g-tie-up-with-national-cable-tv-operator-101449253.html