4G Counts Quarterly Report – Q4 2011 Produced March 2012

Executive Summary

Many operators launched LTE networks during the year as they upgraded or moved from 3G. On the other hand, the WiMAX industry continued to lose pace around the globe. Not only did several of the most prominent WiMAX operators announce their commitment to TD-LTE, but most slowed down the addition of new WiMAX subscribers to their networks as they antici-pated their move to the new technology.

A few highlights:
1) Sprint’s announcement that the first major markets in United States were to re-ceive 4G LTE in mid-2012, including Dallas, Atlanta, Houston, San Antonio and others, totalling 10 markets,

2) The FCC disapproval of the merger between AT&T and TMobile, meaning the deal is officially dead,

3) The AT&T LTE commercial launch covering 28 markets at the end of 2011,

4) Sprint’s announcement of its intention to help finance Clearwire’s LTE network and keep offering WiMAX service through 2015 under a set of agreements worth as much as US$1.6 billion,

5) Yota’s (Russia) launch of LTE in the city of Novosibirsk, Siberia, in December 2011 after a long wait for government approval.

Not only are many operators moving to LTE, but several vendors are exiting WiMAX al-together and refocusing on their 3GPP mobile broadband business. One of the major announcements during Q4 2011 was that Nokia Siemens Networks sold its WiMAX unit recently acquired from Motorola to NewNet Communications. This was the second re-cent sell-off for the company, as Dragonwave acquired its microwave backhaul business in October 2011.

LTE Deployment Trends

At the end of Q4 2011, 54 operators were commercial with LTE, including 19 added dur-ing the quarter alone. The total number of LTE subscribers at the end of the year reached 12.02 million worldwide. Fully 224 additional major mobile operators had com-mitted to launching the technology in the future, 193 with FDD-LTE, 31 with TD-LTE.

Although most of the commitments, trials and deployments are predominantly FDD-LTE, TD-LTE is gaining significant momentum. At the end of December 2011, there were 30 commitments to TD-LTE and 4 commercial TD-LTE networks: Aero2 (Poland), STC (Saudi Arabia), Mobily (Saudi Arabia) and SKY (Brazil). SKY’s is the first TD-LTE deploy-ment in Latin America of this kind. The region where more TDLTE trials have been con-ducted is APAC with 18 operators trials, followed by Europe with 5 trials. Although, the number of commercial LTE deployments in Europe is higher than any other region, with 25 commercial deployments counted at the end of 2011, the region still scores a very low LTE subscriber uptake with only 980k LTE subscribers reported at the end of 2011, rep-resenting 8% of the global LTE subscriber base.

A major reason for this phenomenon is that LTE smartphones are, strangely, nowhere to be seen in Europe. But that is changing in 2012, as some major LTE players including TeliaSonera and Tele2 in Sweden, and Vodafone Germany announced in February 2012 the introduction of new LTE smartphones. The introduction of LTE smartphones in Europe will boost the subscriber uptake in the region.

The most recent Maravedis 4G Subscriber Forecast predicts that LTE subscribers will grow from 12 million in 2011 to 469 million in 2016. By the end of 2016, 75% of the LTE subscriber base or 350 million will be FDD LTE subscribers, while the remaining 25% or 118 million will be TD-LTE subscribers. We expect that the TD-LTE subscriber uptake will commence in 2013.

BWA/WiMAX Trends

While in previous years we saw WiMAX subscribers growing at an average quarterly rate of 25%-30%, our findings revealed that subscriber growth for WiMAX decreased dramati-cally in 2011. In Q4 2011 alone, the quarterly WiMAX subscriber growth was only 14%. Today, WiMAX is being seen as the technology of choice for greenfield operators to pro-vide fixed-nomadic connectivity, while LTE is the choice for operators wanting to provide mobile broadband. At the end of Q4 2011, the worldwide BWA/WiMAX industry ac-counted for 25.16 million subscribers, an increase of 14% quarter over quarter from 22.07 million reported at the end of Q3 2011. Q4 2011 quarterly increase was low com-pared to the previous quarters.

For example, in Q4 2010, the subscriber quarterly increase was 35%, while in Q1 2011 it decreased to only 30%. In Q2 and Q3 2011, the subscriber quarterly increase was 20% per quarter. This shows a quarterly slowdown on subscriber additions. The BWA/WiMAX subscriber base grew by 12.16 million between Q4 2010 and Q4 2011, which represents a yearly increase of 193%.

For the Top 50 BWA/WiMAX operators tracked in 4GCounts Q4 2011, recorded ARPU was US$39.60 and US$76.24 for residential and business subscribers respectively, com-pared to US$39.17 and US$77.51 for the same segments in Q3 2011. Total worldwide WiMAX business revenues were $2.10 billion during the quarter.

http://maravedis-rethink.com/pdf/Executive%20Summary%204G%20Counts.pdf

Overview

Market research firm Infonetics Research today reported in its Optical Network Hardware vendor market share report that spending on optical gear dropped 23% globally in the first quarter of 2012 (1Q12) from the previous quarter.  This seems to contradict the recent WSJ article indicating there’s a new fiber optic buildout boom underway in the U.S.

https://techblog.comsoc.org/2012/04/03/telecom-industry-fiber-optic-building-spree-will-it-lead-to-another-fiber-glut

Andrew Schmitt, principal analyst for optical at Infonetics stated,”While optical hardware revenue trends in all world regions were not positive in the first quarter of 2012, the most alarming development is that year-over-year in EMEA – particularly Europe – spending on WDM optical equipment decreased faster than spending on legacy SDH equipment.  This is not the behavior of a region experiencing only a minor quarterly pullback. By contrast, the trend in North America was the opposite, with carriers cutting spending year-over-year but allocating towards forward-looking technology investments like WDM equipment and ROADMs.”

Mr. Schmitt adds: “EMEA and North America are both now trending downward on a rolling fourth-quarter basis, and Asia Pacific is flat. Still, conversations with vendors and carriers lead us to believe that spending in North America will resume moderate growth and we are forecasting solid gains in optical spending in China this year in large part due to our recent visits with Chinese carriers. But Europe is a tough call, with macroeconomic trends there not providing much hope and evidence that some service providers there are battening down the hatches.”

MORE OPTICAL HARDWARE MARKET HIGHLIGHTS 

• While the global WDM and SONET/SDH optical network equipment market declined 23% in 1Q12 to $2.8 billion (the largest quarterly drop in years), the impact was sharpened by a strong previous quarter, when the market grew 9%
• Revenue for all optical vendors declined in EMEA, with the exception of Infinera
• Though EMEA typically has a seasonal sequential decline in the first quarter, 1Q12 was the worst quarter for optical capex in over 5 years
• Fujitsu and Ciena outperformed competitors in North America
• Asia Pacific was buoyed by strong spending in Japan, with NEC and Fujitsu posting eye-popping 28% gains in 1Q12 from the year-ago first quarter 2011.
• Aside from the standout performances by NEC and Fujitsu, while many of the big vendors enjoyed gains the previous quarter, 1Q12 was characterized by smaller companies such as Infinera, ADVA, and Transmode outperforming the market
• ROADM (reconfigurable optical add drop multiplexor) equipment spending was flat in 1Q12, an achievement considering this category posted a record quarter in 4Q11

REPORT SYNOPSIS
Infonetics’ quarterly Optical Network Hardware report tracks Adtran, ADVA, Alcatel-Lucent, BTI, Ciena, Cisco, ECI, Ericsson, Fujitsu, Huawei, Infinera, NEC, Nokia Siemens Networks, Nortel, Sycamore, Tellabs, Transmode, Tyco, ZTE, and others. The report provides worldwide and regional vendor market share, market size, and analysis (forecasts are published May 25). Equipment tracked: metro and long haul SONET/SDH and WDM optical network equipment (transport, ROADM, submarine line terminating equipment), and ports (Ethernet, SONET/SDH/POS, and WDM).

What’s Tracked in the report:  EquipmentWDMMetroTransport, ROADMLong HaulTransport, ROADM, SLTESONET/SDH Optical Network Hardware: RevenueMetro, Long HaulP-OTS: Revenue1st Gen, 2nd Gen, etc.

TO BUY REPORTS, CONTACT SALES:

• N. America (West), Asia, Latin America: Larry Howard, [email protected], +1-408-583-3335
• N. America (East), Texas, Midwest: Scott Coyne, [email protected], +1-408-583-3395
• Europe, Middle East, Africa: George Stojsavljevic, [email protected], +44-755-488-1623
• Japan, South Korea, China, Taiwan: http://www.infonetics.com/contact.asp

Market research firm Infonetics Research released excerpts from its new Carrier WiFi Equipment market share, market size, and forecast report, which tracks carrier-class mobile WiFi access points, carrier-class WiFi hotspot access points, WiFi hotspot controllers, and the vendors who manufacture them.

Author Richard Webb recently said, “Mobile WiFi access points are expected to experience the highest CAGR — 86% — through 2016 as operators seek closer integration of WiFi with the mobile network.”

CARRIER WIFI EQUIPMENT MARKET HIGHLIGHTS
.    Global revenue for carrier WiFi equipment — including mobile WiFi access points, WiFi hotspot access points, and WiFi hotspot controllers — grew 35% in 2011 from 2010
.    Mobile WiFi access points are expected to experience the highest compound annual growth rate — 86% — through 2016 as mobile operators seek a closer integration of WiFi with the mobile network
.    Infonetics forecasts the global carrier WiFi equipment market to grow in the high double-digit percents annually at least through 2016, when it will hit $2.1 billion
.    BelAir Networks (recently acquired by Ericsson), Cisco, and Ruckus Wireless together account for more than two-thirds of 2011 global carrier WiFi equipment revenue
.    Infonetics anticipates new players will enter the market, disrupting early market share standings, and, with growing demand for WiFi integrated base stations from mobile operators, carrier WiFi market share could shift toward the mobile infrastructure vendors

REPORT SYNOPSIS
Infonetics’ Carrier WiFi Equipment report is a new service that tracks the market for WiFi equipment deployed by operators in public spaces for wireless Internet access. The report covers carrier-class mobile WiFi access points, carrier-class WiFi hotspot access points, and WiFi hotspot controllers (not consumer WiFi CPE or enterprise wireless LAN equipment). The report provides market analysis, market trends, carrier WiFi equipment vendor market share, market size, and forecasts by revenue and units. The report also includes carrier WiFi vendor announcements and customer wins and a Mobile Operator WiFi Offload Strategies Tracker. Vendors tracked include 4ipnet, Airspan, Alcatel-Lucent, Alvarion, CeedTec, Cisco, Edgewater Wireless, Ericsson (BelAir Networks), Gemtek, GoNet, Handlink, HP, Huawei, Motorola, Nomadix, Proxim, RFNet, Ruckus Wireless, Shyam Networks, Strix Systems, Tranzeo, Tropos, Ubiquiti Networks, UniFi, Vivato, Wavion, and others. Contact Infonetics’ Sales to buy report: http://www.infonetics.com/contact.asp.

ANALYST NOTE
“Our many recent conversations with mobile operators and equipment vendors validate our view that mobile operators are hot for hotspots,” notes Richard Webb, directing analyst for microwave, mobile offload, and mobile broadband devices at Infonetics Research. “The carrier WiFi equipment market has grown consistently since 2007, initially driven by exploding demand from mobile operators augmenting their 3G and 4G deployments with WiFi hotspot services. The strongest new growth driver is mobile operators deploying carrier WiFi to offload a portion of their mobile data traffic. Additionally, fixed-line operators and ISPs continue to deploy WiFi to extend existing WiFi hotspot services, cable and DSL operators use WiFi as an enhancement for their broadband services, and many operators will soon be upgrading their existing access points to new WiFi standards, such as the forthcoming 802.11ac protocol.”

Infonetics Research also released excerpts from its new Carrier WiFi Offload and Hotspot Strategies: Global Service Provider Survey today.

SELECT CARRIER WIFI OFFLOAD AND HOTSPOT STRATEGIES SURVEY HIGHLIGHTS
.    Two-thirds of the service providers that Infonetics interviewed have already deployed 20,000 to over 150,000 WiFi access points (APs) in public spaces
.    Street coverage is seen as one of the areas of greatest deficit for WiFi coverage; by 2013, the percentage of service providers planning to deploy WiFi for street coverage jumps to 79%
.    Complementing the mobile data service by enhancing throughput is currently the top deployment driver for carrier WiFi, followed by the scarcity of licensed spectrum
.    Nearly all respondent carriers plan to increase the number of access points deployed by 2013, so Infonetics expects significant carrier WiFi deployment over the coming year
.    Smartphones and tablets are named by mobile operators as the top mobile broadband devices driving their 2013 deployments of public WiFi networks

CARRIER WIFI OFFLOAD AND HOTSPOT STRATEGIES SURVEY SYNOPSIS
For its Carrier WiFi Offload and Hotspot Strategies survey, Infonetics interviewed 24 mobile, incumbent, and competitive operators in Asia Pacific, Europe, North America, the Middle East and Africa that operate a public WiFi network used for offloading cellular networks, or who plan to by year-end. The study provides insight into service provider WiFi offload deployment plans and drivers, ratings of WiFi product features, and mobile offload and WiFi service strategies. Together the survey respondents represent 35% of the world’s telecom carrier revenue and 36% of the world’s telecom capex (capital expenditures). Contact Infonetics’ Sales to buy report: http://www.infonetics.com/contact.asp.

ANALYST NOTE
“Mobile operators are firmly behind carrier WiFi as a key solution for mobile offload, even as they continue to investigate other small cell possibilities,” says Richard Webb, directing analyst for microwave, mobile offload, and mobile broadband devices at Infonetics Research. “Our survey shows that whilst data offload is the current priority, in coming years operators will want to see a closer integration of WiFi with the mobile network so that offload becomes more intelligent, automated, and seamless. They want to utilize WiFi not only to augment mobile services, but to enhance the network itself by becoming an integrated part of the mobile network.”

At an Alliance for Telecommunications Industry Solutions (ATIS) event on May 8th, Verizon Communication’s CTO Tony Melone said: “there is no way” that Sprint Nextel Corp. forthcoming Long Term Evolution (LTE) network will beat the performance of his company’s existing 4G cellular network which uses larger communications channels.   Mr. Melone made the statement in response to a question about Sprint’s claim that it will offer a comparable LTE experience to AT&T Inc. and Verizon using smaller channels.

AT&T and Verizon have started with 10MHz by 10MHz channels in the 700MHz band for their 4G LTE deployments. Sprint will use 5MHz by 5MHz channels in the 1900MHz PCS band for its LTE service, due to launch in six cities by mid-year.

“There’s no way a 5 X 5 network can perform like a 10 X 10 network,” Melone said.  He did note that if a network is “fully loaded” with users, it could start to drag on performance. All things being equal, however, larger channels always provide better LTE performance, according to the Verizon CTO (and Shannon’s Channel Capacity theorem).

http://www.ctiawireless.com/media/index.cfm/news-coverage

For the consumers who cannot get such cable modem based Internet access (from a MSO), but are in rural areas that are covered by the LTE network Verizon is pushing its LTE based “HomeFusion” connection.  It’s expense, at $199 plus a monthly service fee.  The HomeFusion costs at least $60 per month for a 10GB bucket of data. Consider that a two-hour HD movie eats through about 2GB of data in one sitting.

http://reviews.cnet.com/routers/verizon-wireless-homefusion/4505-3319_7-35286592.html?tag=contentMain;contentBody;1r

During an interview with Network World today, Verizon Vice President of Network Hans Leutenegger said that the carrier won’t be deploying any voice over LTE (VoLTE) services on its network until late next year at the very earliest. The reason for this, he said, is that Verizon is already largely satisfied with its current (CDMA based) voice network and doesn’t see the need to push both handset manufacturers and its own customers to use a new technology just yet.

http://www.networkworld.com/news/2012/050812-ctia-volte-259079.html

Separately from Verizon’s huge presence at CTIA, T-Mobile announced that Ericsson and Nokia Siemens Networks (NSN) would be building its $4B LTE network, which is scheduled to be deployed in late 2013.  The contracts cover LTE network installation at 37,000 cell sites owned by T-Mobile.  That’s a big step up from it’s current HSPA+ network, which the carrier erroneously calls “4G.”

Ericsson now is supplying LTE gear to all four of the major U.S. operators, as well as to tier II operators MetroPCS, U.S. Cellular and Canadian carrier Rogers Communications, helping cement its dominant position atop the global 4G market.  On the other hand, NSN needed to keep T-Mobile a customer in order to remain relevant in the U.S. 4G market. T-Mobile is now NSN’s sole LTE radio contract in the U.S., though it is building the Telus and Bell Mobility 4G networks in Canada and is supplying parts of Verizon’s LTE core.

http://gigaom.com/broadband/ericsson-nsn-keep-their-t-mobile-jobs-for-lte-build/

Part of the spectrum to be used for T-Mobile’s LTE network came from AT&T.  T-Mobile is planning to combine the new AWS band spectrum it got from AT&T with what it’s able to refarm from its existing wireless network. The company believes these two sources will be enough to offer “up to 20MHz of LTE in 75 percent of the top 25 markets.”

http://www.theverge.com/2012/5/8/3006480/t-mobile-ericsson-nokia-siemens-equipment-announcement

Comcast and Verizon are the top North American Business VoIP service providers, according to Infonetics Research just released report: North America Business VoIP Service Leadership Scorecard.  The report analyzes and ranks the top service providers in the hosted VoIP and unified communications (UC) services market and the IP connectivity market.
 

A few Highlights:

• Comcast earned a high overall score of 33 out of 35 for hosted VoIP services; West, Verizon, and 8×8 are also among the top hosted VoIP providers in North America
• Verizon Business earned a high overall score of 32 out of 35 for IP connectivity providers; AT&T, Comcast, and XO Communications are also among the top providers in North America
• At the end of 2011, many of the top hosted VoIP service providers had over 100,000 VoIP and UC seats, while others had fewer than 50,000 seats, signaling further consolidation to come, and likely the shuttering of some businesses
• On the IP connectivity front, the bulk of the installed base has become concentrated with the large operators, as scale is necessary for a successful business in a service market based on lower-prices
• The competitive landscape for hosted VoIP services is shaking up, with the traditional PBX and Unified Communications equipment vendors such as ShoreTel, NEC, Mitel, Avaya, and Cisco jumping into the cloud.

“Comcast’s acquisition of New Global Telecom, the former perennial leader in our business VoIP scorecards, propelled Comcast to the #1 position in Infonetics’ hosted Business VoIP Leadership Scorecard this year,” announced Diane Myers, principal analyst for VoIP and IMS at Infonetics Research. “And, for the fourth year in a row, Verizon Business is #1 in our IP Connectivity Leadership Scorecard, followed by AT&T.”

Ms. Myers adds: “After a banner 2010, 2011 was another year of consolidation in North America among business VoIP service providers. Though there are still a large number of VoIP service providers in North America, consolidation is starting to separate the large providers from the rest of the pack.”

Last month, Infonetics said that the VoIP services market is growing strongly as businesses seek flexibility and easier management.  Myers said, “Global service provider revenue from business and residential/SOHO VoIP services totaled nearly $58 billion in 2011, up 16% from the previous year.”

“The revenue that service providers derive from their residential and SOHO VoIP subscribers still eclipses what they get from businesses, but the business segment is growing about twice as fast, due in large part to the surging popularity of SIP trunking and hosted VoIP and UC services. Adoption of VoIP services across both the residential and business segments continues to grow, and we expect strong global growth in VoIP service revenue over at least the next five years,” according to Ms. Myers. 

Infonetics’ North America Business VoIP Service Leadership Scorecard profiles, analyzes, and ranks leading hosted VoIP and unified communications (UC) service providers and leading IP business connectivity service providers in the U.S. and Canada. Service provider scores are based on criteria such as installed base of lines/trunks or seats, financial stability, market strategy, service capabilities, and support options. Service provider scores and data are displayed in charts and tables in the report, accompanied by service provider profiles describing their offerings and analysis of the individual scores.

Service providers ranked in Infonetics’ 2012 North America Business VoIP Service Leadership Scorecard include 8×8, AT&T, Bandwidth.com, BroadView Networks, Cbeyond, Comcast, Cox, Level 3, Megapath, RingCentral, ShoreTel/M5, Sprint, Thinking Phone Networks, Verizon Business, West, Windstream, and XO Communications.

For more information on Infonetics’ Reports:

http://www.infonetics.com/contact.asp

Google’s use of SDN in its internal WAN backbone:

Urs Hölzle,Sr VP of Technical Infrastructure at Google presented the opening keynote speech at the 2012 Open Network Summit, April 17 in Santa Clara, CA.  The audience was surprised to learn that Google had built its own switches and SDN confrollers for use in its internal backbone network – the one which is used to interconnect its data centers.

Here are the key points made in Mr. Hölzle’s presentation:

Google currently operates two WAN backbones, according to Hölzle:

1] I-Scale is the public Internet-facing backbone that carries user traffic to and from Google’s data centers. It must have bulletproof performance.

2] G-Scale is the internal backbone that carries traffic between Google’s data centers worldwide. The G-Scale network has been used to experiment with SDN.

• Google chose to pursue SDN in order to separate hardware from software. This enables the company to choose hardware based on necessary features and to choose software based on protocol requirements.
• SDN provides logically, centralized network control. The goal is to be more deterministic, more efficient and more fault-tolerant.
• SDN enables better centralized traffic engineering, such as an ability for the network to converge quickly to target optimum on a link failure.  Determinist behavior should simplify planning vs over provisioning for worst case variability.
• The SDN controller uses modern server hardware, giving it more flexibility than conventional routers.
• Switches are virtualized with real OpenFlow and the company can attach real monitoring and alerting servers. Testing is vastly simplified.
• The move to SDN is really about picking the right tool for the right job.
• Google’s OpenFlow WAN activity really started moving in 2010. Less than two years later, Google is now running the G-Scale network on OpenFlow-controlled switches. 100% of its production data center to data center traffic is now on this new SDN-powered network.
• Google built their own OpenFlow switch because none were commercially available. The switch was built from merchant silicon. It has scaled to hundred of nonblocking 10GE ports.
• Google’s practice is to simplify every software stack and hardware element as much as possible, removing anything that is not absolutely necessary.
• Multiple switch chassis are used in each domain.
• Google is using open source routing stacks for BGP and ISIS.
• The OpenFlow-controlled switches (designed and built by Google) look like regular routers. BGP/ISIS/OSPF now interfaces with OpenFlow controller to program the switch state.
• A preliminary version of the Open Flow protocol is being used now.  (The Open Flow standard is still maturing).
• All data center backbone traffic is now carried by this new SDN based network. The old network has been shut down.
• Google started rolling out centralized traffic engineering in January.
• Google is already seeing higher network utilization and gaining the benefit of flexible management of end-to-end paths for maintenance.
• Over the past six months, the new network has seen a high degree of stability with minimal outages.
• The new SDN-powered network is meeting the company’s SLA objectives.
• It is still too early to quantify the economics.
• A key SDN benefit is the unified view of the network fabric — higher QoS awareness and predictability.

http://www.convergedigest.com/Bandwidth/newnetworksarticle.asp?ID=35604

Mr. Hölzle said that Google’s software-defined networking system has been running for about six months and that it was therefore too early to accurately benchmark cost savings. “This will have a bigger impact in costs than any technical change like a larger router, or 10 gigabit optical switches instead of 2.5 gigabit.  I would expect the cost reduction to come from better system utilization, and substantially easier management,” he said.

“In utilization alone, we are hoping for a 20 percent to 30 percent reduction,” he continued.  Google’s very specific network applications, like search, made it hard to say what others could expect to save. Hölzle thought that the savings would be enough to compel large Internet service providers to change their systems to S.D.N. over the next five years.

Surprisingly, perhaps, Mr. Hölzle thought that the incumbent networking providers would lead the transition. Start-up networking companies likeNicira have created a stir with their SDN approaches, but Mr. Hölzle thought that the big service providers would have a level of trust with the incumbent network equipment companies (We don’t necessarily agree- there are no incumbent networking companies that are leaders in SDNs).

“The natural players are the ones already in the field – Cisco, Alcatel, Juniper,” he said, noting that NEC was an early leader in S.D.N. “They have the networking management software, just at the level of hardware ports, not data flows.” Google talks with all of these companies about their S.D.N. plans, Mr. Hölzle said. Within a year or two, he thought, Google would be purchasing S.D.N.-related products from one or more of these companies.

http://bits.blogs.nytimes.com/2012/04/18/google-opens-the-network-kimono/

SDN use in global WANs:

There were also presentations from NEC, NTT, Verizon and other WAN players endorsing SDN and Open Flow at this conference.  NEC said it’s Open Flow controller, together with IBM switches, would be deployed in the WAN as early as this July.   NTT stated that a global cloud virtualization service that leverages SDN will also be launched this summer. 

http://www.convergedigest.com/Bandwidth/newnetworksarticle.asp?ID=35620

Complete program with selected presentations is at: http://opennetsummit.org/index.html

Editorial:

GigaOM wrote that the conference was like “a giant science fair for the networking industry. There are arcane demonstrations detailing how software-defined networks and the OpenFlow protocol will change the way networks are built, managed and operated. There are speakers from Google, Verizon and Yahoo detailing their projects and successes with OpenFlow as well as investors and bankers swarming the whole event.”

“The creation of the OpenFlow protocol, which separates the act of directing how packets move across a network from the physical act of moving those packets, has helped create excitement around networking, and is precipitating change. The change is actually the creation of software-defined networks that are programmable (for the record, a software defined network doesn’t need OpenFlow). There’s also a third change that’s been going on regarding the commoditization of networking hardware and the rise of merchant silicon.”

http://gigaom.com/cloud/will-openflow-really-be-the-android-of-networking/

Opinion Piece:

Forbes magazine pointed out that SDN networks are “more secure, more dependable and much easier to manage” because the software that controls network traffic is separate from the physical routers and switches.

“By separating the software that controls network traffic from the physical routers and switches, SDN should make networks more secure, more dependable and much easier to manage. Because SDN runs on commodity hardware, it could translate into siginficant savings for network operators. Perhaps most important, it opens up the network to the possibility of vast innovation.

For Google, software defined networking represented a better way of moving traffic between its global data centers. According to Holzle, things that were hard to do on processors embedded in a networking box become much easier when they separately designed and merely communicated to the hardware using OpenFlow. “You can use all the [computer] tools for software development and that makes it faster to develop software that is higher in quality,” he said.

One of the big advantages for Google is better traffic management—this new approach basically ensures that every lane on its global network of data highways is smoothly moving packets toward their destinations. “Soon we will be able to get very close to 100 percent utilization of our network,” Holzle said. This is a big increase from the industry expectation of thirty to forty percent utilization.”

http://www.forbes.com/sites/eliseackerman/2012/04/18/google-unveils-secret-worldwide-networking-project/

The market segments where SDN might be advantageously used include:

• Cloud Services Providers / large website data centers
• Universities and research campus networks
• Metro Area CSP data center interconnect
• Enterprise data centers
• Internet service provider core routed networks
• Campus LAN
• Enterprise WAN

http://www.networkworld.com/community/blog/openflow-software-defined-networking-and-enterprise-wan?page=0%2C1

Author’s NOTE:Also see this blog post:

https://techblog.comsoc.org/2012/06/12/ciena-brings-sdn-functionality-to-new-network-architecture-opn-july-comsocscv-meeting

Check out IEEE ComSocSCV July 11 meeting: 6pm-*45pm @Texas Instruments Building E, 2900 Semiconductor Dr., Santa Clara, CA 95051. Software Defined Networking (SDN) Explained- New Epoch or Passing Fad?

Session Abstract: After several years of research, Software Define Networking (SDN) has finally become a reality. At this year’s Open Networking Summit, Google announced it had already deployed its own SDN design in the backbone network that interconnects all its Data Centers. NTT and Verizon hinted that they’d deploy SDN soon, while network equipment vendors indicated they were committed to the concept. IT executives and managers are also taking notice. One pundit predicted a ‘new epoch’ in networks based on SDN- for data centers, campus networks and WANs. But what exactly is SDN and the associated OpenFlow protocol that the Open Networking Foundation (ONF) is standardizing?

 More info at:  http://www.ewh.ieee.org/r6/scv/comsoc/index.php#current

U.S.-based wireline-broadband network providers last year accounted for 41% of the $66 billion spent on information infrastructure in the U.S., while wireless carriers kicked in 40% of the total, according to a report by USTelecom. The other 19% came from cable operators (AKA MSOs).  This information is contained in the research brief: “Updated Capital Spending Data Show Continued Significant Broadband Investment in Nation’s Information Infrastructure.”

http://www.ustelecom.org/sites/default/files/documents/042012_Investment_2011_Research_Brief.pdf

2011 capital expenditures for the industry as a whole—including wireline, wireless, and cable operators—were approximately $66 billion, roughly the same as 2010.  Furthermore, the data show that broadband providers have made nearly $1.2 trillion in capital investments from 1996 through 2011.

Although the overall investment level has not changed much in the last year, the amount of data traffic that networks carry has increased dramatically– from the equivalent of 8.3 million DVDs per month in 2000 to the equivalent of more than 1.4 billion DVDs per month in 2010, USTelecom said. The association expects traffic levels to triple again over the next five years.

The largest driver of bandwidth demand in 2010 and 2011 was consumer video over fixed networks, representing more than two-thirds of U.S. data traffic in 2010 and approaching three-quarters in the next five years, said USTelecom.

According to the USTelecom research, 96% of Americans now have access to fixed broadband, up 1% since 2010. Researchers also noted that 80% of U.S. households have at least two broadband providers from which to choose.  The research brief does not indicate how researchers defined broadband.

It appears that some of USTelecom’s landline carriers may be feeling overshadowed by wireless carriers, which have garnered much of consumers’ attention in recent years. “Nearly all of U.S. wireless data traffic, the fastest growing data traffic segment, utilizes fixed network connections,” the research brief notes. “Fixed backhaul connections link cell towers to the network and, increasingly, mobile data traffic is offloaded onto Wi-Fi enabled fixed network connections via dual-mode Wi-Fi cellular devices in order to alleviate mobile network capacity limitations.”

http://www.telecompetitor.com/report-wireline-broadband-providers-invested-more-than-wireless-providers/

Separately, AT&T reported that it netted 718,000 U-verse broadband and 200,000 TV customers in the first quarter. Broadband users signed up for faster service in greater numbers than a year ago with 45% opting for speeds of at least 6 Mbps. Overall, AT&T exceeded analysts’ estimates in the first quarter on a 5.2% increase in net profit due largely to higher wireless data service revenue. 

But the U.S. cellular market is nearing saturation after a growth spurt fueled by sales of the iPhone last year. Wireless penetration in the U.S. is 105 percent when including mobile devices like tablet computers, said Bob Roche, a statistician with CTIA, a wireless-industry trade group.

The slowing market is forcing AT&T into more intense competition with Verizon Wireless and Sprint Nextel Corp. (S), with the carriers fighting over a shrinking pool of people who don’t yet have mobile phones. They’re also trying to get customers to upgrade to smartphones such as the iPhone that let users browse the Web and stream video.

http://www.bloomberg.com/news/2012-04-24/at-t-profit-beats-esitmates-on-solid-wireless-growth.html

The seemingly never ending “Mobile Patent War”  will be examined from many different perspectives at the May 9 IEEE ComSocSCV Meeting in Santa Clara, CA.   Samsung is co-sponsoring the event and will chair the panel session. Participating companies include: Google, HP, Qualcomm, Rambus, SCU Law Dept and AJIS LLC (our own IEEE member Jonathan Wells).  The panel will look at patent issues pertaining to smart phones, media tablets (which are now generating more Internet traffic than smart phones) and other mobile devices.  All of these devices are actually minitiarized, special purpose computers.

Here is the latest information on the program: MOBILE PATENT LITIGATION LANDSCAPE

Introduction:  Ken Korea of Samsung- Head of Silicon Valley Patent/IP Office

I.       Patent suits between competitors  (John Scott of Qualcomm) – Apple v. HTC/Motorola/Samsung, Microsoft v. Motorola, etc.

II.     NPE (Non Patent Entities) patent suits (Cynthia Bright of HP) – are they increasing or decreasing?  Has the AIA had any impact?

III.    Acquiring patents for protection (Josh McGuire of Google)  – CPTN’s acquisition of Novell patents, Nortel patent auction, Google’s purchase of IBM patents etc.

IV.    Patent remedies (Colleen Chien of SCU Law School)- Patent remedies, case of ITC v district court

V.     Companies’ transfer of IP Assets to NPEs (Tom Lavelle of Rambus) – Micron to RRR, Nokia to Mosaid, Apple to Digitude, etc.

VI.    What does this mean for engineers? (Jonathan Wells of AJIS LLC- IEEE ComSoc Discussion Group member)

For meeting details please visit: http://www.ewh.ieee.org/r6/scv/comsoc/index.php#current

Background Information

Below is an edited version of a related article, which appeared April 13, 2012, on page B1 in some U.S. editions of The Wall Street Journal, with the headline: Smartphone Patents: The Never-Ending War.

http://online.wsj.com/article/SB10001424052702303624004577339931560320116.html?mod=ITP_marketplace_0

The WSJ notes that Apple is waging a patent crusade against mobile-phone giants it believes ripped off the iPhone.  Take the iPhone’s  “slide to unlock” feature, as an example.   Apple has secured two key U.S. patents on slide-to-unlock—a technology that lets users wake a dormant phone with a finger-swipe across the screen. And it is wielding those patents like swords against rivals around the world.  (Even though slide to unlock has nothing to do with mobile or wireless communications!)

In recent months, Apple has sued HTC Corp. in Delaware and Germany over one of those patents and others. It has used the patents to fight back against suits Motorola Mobility Holdings Inc. filed against it in Miami and Germany. And it has invoked them in lawsuits against Samsung Electronics Co. in Australia, the Netherlands, and San Jose, Calif.

As competition in the more than $200 billion global smartphone industry becomes more cutthroat, Apple and its competitors argue that even the most minor unique features are crucial to getting an edge. They are engaged in a lawsuit-filing frenzy, asserting their rights to dozens of patents to block rival products. Their goal: to find a patent that sticks, and to force competitors to work around it or strike a licensing deal.

About five years ago, the computer and mobile-phone industries collided. Technological advances turned phones into minicomputers, complete with email, Web access and other features.  Companies from different corners of industry saw opportunity—and moved into the smart phone market.  Among them: phone makers like Nokia Corp.and Motorola Mobility (soon to be owned by Google); hardware makers like Apple; software giants such as Google Inc. and Microsoft as well as South Korean electronics giant Samsung.

Behind the scenes, another battle was brewing over intellectual property. Almost overnight, every player had developed a gripe. The traditional phone makers claimed, for instance, that Apple was abusing their long-held rights to data-transmission designs. Apple complained others were ripping off its designs.

In the past two years, legal disputes have erupted over digital-image storage methods, camera designs, Wi-Fi technologies and well-known software applications like email and calendars, as well as secondary features most consumers barely notice.

The stakes are rising for Apple. Despite the iPhone’s popularity, its market share has been eclipsed by phones that run Android, Google’s mobile operating software.  Fueling the fire at Apple: a sense among executives there that rivals are blatantly stealing its designs. Apple co-founder Steve Jobs, who died in October, said in an authorized biography that he would “spend every penny” to fight copycats.  Apple CEO Tim Cook told investors in October that Apple spends “a lot of time and money and resource in coming up with incredible innovations. And we don’t like it when someone else takes those.”

A joint effort by the government and major wireless carriers to clamp down on stolen handsets, will likely raise the resale value of used smart phones, Through litigation—or the threat of it—Apple has prompted companies to install time-consuming and, in some instances, costly “workarounds” to avoid infringing its patents.

But Apple has yet to permanently knock any of its competitors’ products out of the market. Several rivals, meanwhile, have struck back against Apple, accusing the company of using their own patented designs.

At the center of the war is “slide-to-unlock.” feature.  It dates to late 2005, more than a year before Apple announced a product with a touchscreen. The first iPhone was in the works at the time, and Apple’s software engineers, including one of its current senior vice presidents, Scott Forstall, felt the need for a feature that would prevent the phone from accidentally making a call or sending a text message when pulled from a pocket or jostled in a purse.

Apple’s engineers regarded slide-to-unlock as important because it flavored a user’s first experience with the device, according to a person familiar with the matter. The team tried many iterations, this person said, from different finger-swiping speeds to different-shaped motions.

Two days before Christmas 2005, Apple filed a patent application with the U.S. Patent and Trademark Office containing a handful of rudimentary drawings with ovals and circles.  The diagrams showed an early version of the design that current iPhone models use: a white rectangle with rounded edges that, when touched and dragged to the right, slides alongside a horizontal channel until the device “unlocks” and opens to the home screen.

The patent office granted Apple the patent four years later, in early 2010. That March, Apple sued HTC in Delaware for allegedly infringing slide-to-unlock and other features.

According to a person familiar with the matter, Apple felt that it would be a good starter case because the company thought it was particularly easy to see that HTC had imitated the iPhone interface—by using similar rows of icons, for example.

Several months later, Apple asserted claims against Motorola in Florida, where Motorola was already suing Apple, alleging that over a dozen Motorola products violated Apple’s slide-to-unlock patent.

The slide-to-unlock used on many Motorola phones resembles Apple’s in many ways. Users open the phone by dragging a finger from left to right across the bottom of the phone’s screen. But the visual representations of the sliding motion are somewhat different.

Apple users see a white rectangle move across the screen while, with the Motorola phones, the slide of a finger extends a bar across the screen. Partly for this reason, Motorola claims its so-called “stretch to unlock” doesn’t infringe Apple’s patent.

Samsung, however, posed a unique challenge for Apple on slide-to-unlock. While Apple was waiting for its patent to be issued, Samsung unveiled phones that opened when a user touched the center of a circle on the screen, and dragged a finger to any point outside the circle.

Samsung’s design was different, but in the mind of Apple executives, not different enough. So, in 2009 Apple went back to the patent office, according to a person familiar with the matter, and asked for a patent that would cover a wider variety of slide-to-unlock designs.

Apple got such a patent last October, and in February the company filed suit in San Jose against Samsung, alleging Samsung violated an array of patents, including slide-to-unlock.

Earlier this year, the combatants all got a surprise: an obscure Swedish touchscreen maker called Neonode Inc. disclosed that it had received a patent for a version of slide-to-unlock. Its technology let a mobile-device user switch from one application to another by swiping a finger across a screen.  The company, which briefly made a line of phones prior to a 2008 bankruptcy, had used the mechanism in one of its models.

In a recent Apple-Samsung battle over slide-to-unlock in the Netherlands, Samsung held up Neonode designs as examples of “prior art,” or evidence that Apple’s patents on slide-to-unlock should never have been granted in the first place because someone else had actually beaten Apple to the idea.

A person close to Samsung said the company is likely to use Neonode’s patent to try to knock out Apple in the San Jose case. Samsung has other arguments as well: “Sliding locks have been around since the Middle Ages, and Apple didn’t invent touchscreens,” this person said. “And the combination of the two fits the definition of obvious.”

In Apple’s only win so far on slide-to-unlock, a judge in Munich ruled in February that two of Motorola’s designs violated a European version of Apple’s slide-to-unlock patent.

Motorola, however, quickly “designed around” Apple’s patent, and its phones remained on the German market.

Many intellectual-property experts think that the smartphone war will end in a flurry of licensing and cross-licensing agreements, but that it’s taking way too much time and money to get there.

“When you have companies spending hundreds of millions in litigation, something is seriously wrong with our patent system,” said Michael Carrier, a professor at Rutgers School of Law in Camden, N.J. “You’ve got to wonder whether it’s doing more harm than good,” he added.

Write to Ashby Jones at [email protected] and Jessica E. Vascellaro at [email protected]

Copyright 2012 Dow Jones & Company, Inc. All Rights Reserved

http://online.wsj.com/article/SB10001424052702303624004577339931560320116.html?mod=ITP_marketplace_0

Also see this related NY Times article:  Smartphone Patent Wars: The Coming Sequel

Billions of dollars are being spent to amass patent arsenals, and lawsuits are flying worldwide. Apple, Samsung, Microsoft and Motorola Mobility (or Google, after that patent-inspired acquisition is complete) are the heavyweights in the fray, seeking an edge in the fast-growing smartphone market, using intellectual property as a weapon.

Acknowledgement: The author deeply thanks and is indebted to Samsung’s Ken Korea for doing such a splendid job of organizing this panel and accomodating many late panelist changes.  IEEE ComSocSCV also thanks Samsung for their generous co-sponsorship of this event.

According to the WSJ (Optical Delusion? Fiber Booms Again, Despite Bust), the telecom industry has embarked on another fiber optic building spree.  Some 19 million miles of optical fiber were installed in the U.S. last year, the most since the boom year of 2000, research firm CRU Group says.

This new fiber build-out bonanza comes 11 years after the last one fizzled out.  When the telecom bubble burst in 2001, it wiped out $2 trillion in stock market wealth, caused major dislocations at optical networking firms like Ciena and Nortel.  It also led to many start-ups going bust, especially those building Multi Service Provisioning Platforms (MSPPs or “God Boxes).  Will this time be any different?

The Journal article states, “It is early days in what some in the fiber-optic business are calling a new boom for their long-beaten-down industry. Demand is being driven by skyrocketing Internet video traffic, requests from the financial sector for ever-faster trading connections, and soaring mobile phone use—which has to be tied into landline networks. Even the 2009 economic stimulus plan, which set aside $7.2 billion for telecom projects, is pitching in.”

But already some skeptics caution whether enough demand exists to warrant more fiber build-outs. While stock market and commodity futures  trading firms are currently willing to pay a premium for faster connections, some worry that potential new regulations governing high-frequency trading could crimp the market. Skeptics also question how large a mobile traffic surge will materialize given the high cost of delivering wireless data.  And even if it does, the amount of fiber needed for mobile backhaul will not be that great.  That pales in comparison to the fiber already installed in telco’s long haul, backbone networks.

The WSJ concurs, “There is also plenty of excess capacity available on the nation’s core fiber-optic networks, according to TeleGeography, a telecom market research firm. And capacity is expected to increase as engineers find new ways of squeezing more data traffic into a single strand of glass.”  And that’s due to continuing advances in DWDM (Dense Wave Division Multiplexing) technology, which facilitates more optical channels, at higher speeds, to be transmitted and received over a Single Mode Fiber (SMF) cable.

“A lot of us look at the current construction boom and question if history may be repeating itself,” said Will Hughs, the top U.S. executive for Australian telecom giant Telstra Corp., which sells long-haul telecom services to U.S. customers. In the underwater-cable market, he said, “the possibility for system excess is even greater” than it was a decade ago because technological advances mean that new cables can be built more quickly.

Telecom build out construction firms say it is the location of the fiber-optic networks—rather than their capacity—that is driving new demand. Networks don’t exist where they are needed—at cellphone towers, suburban office parks, and remote data centers, for instance. Carriers that prize reliability want alternative routes. And new uses, such as high-frequency trading (HFT), are also emerging that call for new routes and “carrier hotels.”

In most cases, new fiber build projects aren’t started until customers have been lined up. But some speculators are installing unsold “dark fiber” that has yet to be lighted up for customers, raising concerns that builders may again be getting ahead of themselves.  Veterans of the 2001 collapse insist they are mindful of the lessons they learned and are being much more careful about where they deploy new cable.

“We are a lot smarter than we ever were 10 or 15 years ago,” says James Crowe, chief executive of Level 3 Communications Inc. His company helped define the telecom boom by building its own network from coast to coast, beginning in 1998. It lost more than 90% of its stock-market value a year after hitting its high in March 2000, but it was one of the few to survive the bust.

In recent months, for the first time since the 1990s, Mr. Crowe has started extending Level 3’s fiber-optic network into areas where he hasn’t yet signed up any customers, betting that the demand he needs to make money is there.

He is starting small, investing $50 million in such projects, less than 10% of Level 3’s capital investments this year. But he says the company built a database of three million office buildings, data centers and cellphone towers, pinpointing areas where Level 3 can risk expanding its network without first selling the new capacity.

“The demand has become so obvious,” Mr. Crowe said in an interview at his headquarters in Broomfield, Colo. referring to the surge in bandwidth intensive uses, like streaming video and smartphones. “You’ve got residential neighborhoods that consume more bandwidth than all of New York City did 15 years ago.”

But what’s so remarkable about this new fiber boom is that it doesn’t seem to be targeting commercial buildings in most metropolitan areas.  Recent market research reports indicate that only 15% of commercial buildings have direct fiber access.  The reason given is that “fiber to the business building” weren a much more difficult if not onerous buildout.  Especially when compared to the long-haul fiber connections that could easily be plowed along railroads or highways.

Opinions differ on whether another fiber glut will result from the new buildout.  Analyst Stephan Beckert says there is no lack of fiber in the country now—and with communications technology continuing to improve, it is hard to see a limit to how much data existing fiber can carry. 

However Allied Fiber’s CEO Hunter Newby says there is an opportunity to offer fiber-optic capacity to Internet companies, wireless carriers, hospitals and others who want an alternative to entrenched carriers like Verizon Communications Inc. and AT&T Inc. “The notion there’s a fiber glut is not true,” Mr. Newby says, arguing that much of the fiber-optic cable that is available is simply not in the right place—not at the suburban office parks and cellphone towers that need it.

We think a key driver of new fiber optic construction will be 40G/100G Ethernet in Internet exchanges and high capacity data centers.  We also see the need to interconnect many such “cloud resident” data centers to enterprise customers private networks and also to each other.  So cloud computing and cloud storage could be a big boon to the fiber optic connectivity industry.

For more information, please see:

http://online.wsj.com/article/SB10001424052702303863404577285260615058538.html?mod=WSJ_hp_LEFTTopStories

In a recent SF Chronicle article, Andrew S. Ross concluded that China’s Huawei was one of the world’s top technology innovators.  He wrote, “Huawei is now not just the world’s largest supplier of telecom equipment, but an increasingly ambitious player in high-tech sectors ranging from network servers to mobile telephony.”

“On display inside the company’s glass-encased space-age building are a bevy of sophisticated products: data management centers, solar-powered small footprint base stations, cloud-based software services, videoconferencing systems, smart phones and, most recently, a tablet aimed at the business market,” Ross added.

Operating in 140 countries, Huawei recorded $32 billion in sales last year and looks to triple that number in the next 10 years. The Shanghai center, where much of the mobile phone R&D occurs, employs 10,000 people out of a global workforce of 140,000. That includes approximately 700 employees in its Santa Clara, CA based Research Center.  The company operates 23 R&D centers worldwide.  Some of the hot longer term research projects include: photonics, optics and  LTE (Long Term Evolution) Advanced devices. Huawei installed the world’s first LTE network in Oslo in 2009.  LTE Advanced (True “4G”) is several years from commercial implementation.

Huawei was rated the fifth most innovative company in the world by Fast Company magazine in 2010 (behind Facebook, Amazon, Apple and Google).  The company serves as a model for what the Chinese government would like its economy to be.  Innovation in technology is a key component of China’s five-year plan for “rebalancing” the economy and “higher quality growth.” That cannot be achieved without greater involvement of the private sector, say analysts, including the World Bank and the Development Research Center, a Chinese government agency, which in a recent report called for substantially scaling back the role of the country’s giant state-owned enterprises.

“Huawei is building some of the best, most innovative and fastest equipment in the industry,” Fortune magazine wrote last year.  

“Up to now, the (communist) party has seen SOEs as the driving force of Chinese innovation,” said David Wolf, a Beijing-based corporate consultant and author of a soon-to-be-published book on China’s telecom companies. “They still think they’re the horses to back, and it will take a great deal to persuade party leaders to change course. But if they do, it will change the face of Chinese business.”

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/03/26/BUC31NQAMC.DTL#ixzz1qXim1EGa

In addition to its 700 employees in Santa Clara, another 1,000 are employed elsewhere in the United States, where Huawei spent $230 million on R&D alone last year. Earlier this year, Huawei awarded $6 billion worth of contracts to three California companies, including advanced semiconductor maker Avago Technologies, in San Jose.

But that seems not to have impressed the U.S. government, which has killed at least four deals involving Huawei and U.S. companies in recent years, including the acquisition of 3Leaf -a failing Silicon Valley virtualization and cloud computing company, based on national security concerns.  Another huge scuttled deal was Huawei prohibited from selling network equipment gear to Sprint for Network Vision- its next generation broadband wireless network (Samsung, Alcatel-Lucent, and Ericcson were selected).  The U.S. believes that the Chinese military still controls privately held Huawei.

The Australian government has just recently banned Huawei from providing network systems for the A$36 billion (US$37.6 billion) national Next-generation Broadband Network (NBN)- also because of security concerns.  

Australia’s Prime Minister Julia Gillard has confirmed that Huawei will not be allowed to participate in the NBN for (unspecified) security reasons that are in the “national interest,” and, reports Reuters, went on to highlight China’s rules on overseas investments in communications networks.

This presents a huge road block for Huawei’s fast growth and global dominance of the telecom network equipment business.  Will they fight back?

For more information, please see:

http://newsroom.sprint.com/news/sprint-announces-network-vision-network-evolution-plan.htm

http://www.lightreading.com/blog.asp?blog_sectionid=752&doc_id=219283&

http://www.lightreading.com/blog.asp?blog_sectionid=217&doc_id=219118