IHS Markit: Ethernet switching market +12% YoY; data center and campus upgrades
By Matthias Machowinski, senior research director, enterprise networks and video, IHS Markit
Highlights:
- Worldwide Ethernet switch revenue totaled $6.1 billion in the first quarter of 2018 (Q1 2018), growing 12 percent on a year-over-year basis
- 100GE continued to ramp, increasing more than twofold year over year and reaching 1.7 million ports in the quarter; 40GE ports were flat year over year
- Power-over-Ethernet (PoE) port shipments grew 11 percent in Q1 2018
- Number-one Cisco grew 7 percent year over year, number-two Huawei rose 43 percent, number-three HPE (Aruba) was up 2 percent and number-four Arista grew 40 percent
IHS Markit analysis:
Ethernet switch revenue declined 10 percent sequentially in Q1 2018 due to a seasonal slowdown in demand, but the longer-term growth outlook remains positive and strengthened further during the quarter, with year-over-year growth hitting 12 percent, up from 7 percent the previous quarter.
The market enjoyed its strongest growth in seven years in 2017, and the momentum continued into 2018, fueled by continuing data center upgrades and expansion, as well as growing demand for campus gear due to improving economic conditions. The transition to 25/100GE architectures in the data center is in full swing, driving strong gains in 25GE, 100GE and white box shipments. And power over Ethernet is growing once again, a sign of strengthening campus switching demand.
Growth is well balanced around the globe and not driven by any single geography. In Q1 2018, Europe, the Middle East and Africa (EMEA) and Asia Pacific were the top growth markets, increasing 15 and 16 percent, respectively, year over year, while growth in North America remained solid at 8 percent.
IHS Markit forecasts low- to mid-single-digit growth for the Ethernet switching market from 2019 to 2022. The bright spots will be the 10GE, 25GE, 100GE, 200GE and 400GE segments, where significant growth is expected over the next few years.
Ethernet switch report synopsis
The IHS Markit quarterly Ethernet switch report provides worldwide and regional market size, vendor market share, forecasts through 2022, analysis and trends for unmanaged, web-managed and fully managed fixed and chassis switches by port speed (100ME, 1GE, 2.5GE, 10GE, 25GE, 40GE, 50GE, 100GE, 200GE, 400GE) and revenue.
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Related articles on Ethernet Switch Market:
IDC’s Worldwide Quarterly Ethernet Switch and Router Trackers Show Marked Improvement for Q1 2018
CAPEX at AT&T, Verizon to rise in 2018; AT&T investing in High Speed Networks
Capital expenditures (CAPEX) at AT&T and Verizon will rise slightly more than had been expected for 2018, according to Oppenheimer analysts. In a research note, analysts cited “5G” investments in upping their capex estimates for Verizon by 2%, and they raised their AT&T outlook by 3% because of FirstNet.
“For FY2018E we increase our total capex estimates [for Verizon] by 2% to $18.2B, due to wireless and our position that 5G deployments will accelerate,” the Oppenheimer analysts wrote in a report today. “We increase our FY2018E capex estimates [for AT&T] by ~3% to $25.0B due to FirstNet.”
According to Fierce Wireless, both Verizon and AT&T spent more on their networks in the first quarter of this year than some Wall Street analysts had expected.
“The biggest delta, or upside surprise vs. our estimates thus far has come from higher capex numbers at both Verizon and AT&T,” wrote the Wall Street analysts at Deutsche Bank Markets Research in a May report to investors, following the carriers’ first-quarter earnings reports. They pointed out that Verizon spent fully $4.6 billion on its network during the first quarter, which they said was 29% more than they had been expecting and almost 50% more than what Verizon spent on its network during the same quarter last year.
Overall, the nation’s top carriers are expected to significantly raise their capex spending this year in advance of 5G launches. Barclays in February said it expects capex among the “big four” (Verizon, AT&T, T-Mobile and Sprint) to rise by 10% this year, which it said would be the largest increase in the past five years.
Last week, AT&T executives told attendees at a Wells Fargo investor conference:
Many of the company’s capital-intensive projects are well under way or are near completion, which will support AT&T’s de-levering goals. The company now markets its 100% fiber network to 9 million locations, well on its way to the 12.5 million commitment it made as part of the DIRECTV acquisition. In fact, AT&T expects to reach 14 million customer locations by mid-2019. Also within the next year, the company expects to be in the 40% to 50% range of its FirstNet buildout commitment. And AT&T’s 4G LTE build in Mexico is nearly complete. AT&T also expects continuing benefits from its software defined network (SDN) investments.
High-speed networks. These networks must be able to deliver premium content to whatever screen the customer demands at the lowest cost per megabyte possible. This can include delivering content to homes, mobile devices and cars, and AT&T is investing in wireless build, fiber and new technologies like 5G to deliver a great viewing experience as demand continues to grow for 4K video and virtual and augmented reality.
AT&T Communications provides mobile, broadband, video and other communications services to U.S.-based consumers and nearly 3.5 million companies – from the smallest business to nearly all the Fortune 1000 – with highly secure, smart solutions. Revenues from these services totaled more than $150 billion in 2017.
AT&T expects:
- Continued solid growth in its Mexico wireless operations in the second quarter of 2018 with as many as 700,000 net adds and improving churn. However, the strengthening U.S. dollar and volatility in foreign exchange rates are expected to pressure International segment results.
- Wireless service revenue growth for full-year 2018, on a comparable basis. The company expects wireless service revenues will be essentially flat in the second quarter of 2018.
- The transition of the video market to continue to negatively impact revenues and margins in the Entertainment Group. For the quarter, the company expects total video and broadband subscribers to increase, with DIRECTV NOW subscribers more than offsetting continued declines in traditional TV subscribers. Stephenson said that the mix will continue to shift to over-the-top video. Earlier today, the company announced new unlimited wireless plans — AT&T Unlimited &More Premium starting at $80 for the first line and AT&T Unlimited &More for $70 for one line or $40 per line for four lines— that include access to AT&T’s WatchTV service, the company’s newest video offering featuring 30+ live channels and more than 15,000 TV shows and movies on demand.2 Stephenson said the new product comes with attractive margins.
Yet ANOTHER false “5G” BWA Claim: C-Spire joins Verizon & many others!
C Spire is one of the nation’s largest regional wireless network operators. It has been providing wireless services in Mississippi and elsewhere for decades, and currently operates an extensive LTE network. It owns spectrum licenses ranging from 700 MHz to 28 GHz.
The company announced it is using Wi-Fi technology and unlicensed spectrum to deploy 120 Mbps downstream / 50 Mbps upstream fixed wireless internet services to consumers and businesses in locations across Mississippi. C Spire is selling its service such that customers can sign up at $50-per-month service at any time, without any startup or equipment fees, and can suspend or cancel their service at any time for any reason.
C Spire is branding its service as “5G” as per these quotes from its website:
“Our service runs on amazing 5G fixed wireless technology that is capable of delivering blazing fast speeds without the arbitrary data caps usually associated with LTE or satellite services.”
“C Spire runs Fiber up to the edge of your neighborhood or business district. We then use 5G tech to connect a series of base stations that in turn provide you with high speed internet through the air.”
According to Mike Dano of Fierce Wireless:
Craig Sparks, C Spire’s VP of technology, said that the carrier is using equipment and technology from upstart fixed wireless vendors Mimosa and Siklu to deploy its new service. He said the company enters each new neighborhood by deploying fiber to a “hub home.” That home gets free internet service from the company, but also broadcasts a wireless signal via Mimosa equipment operating in unlicensed 5.8 GHz spectrum to nearby homes. Mimosa’s transmission technology uses a proprietary iteration of the 802.11 standard that powers standard Wi-Fi connections. For nearby homes that sign up for its service, C Spire installs a dinner plate-sized antenna receiver on their roof.
Sparks said that C Spire can expand throughout a neighborhood via wireless backhaul connections using Siklu’s equipment running in the unlicensed 60 GHz band. So, after connecting the first hub location via fiber, Sparks said C Spire can wirelessly “chain” additional hub homes to the network via Siklu’s backhaul equipment. Again, each hub home running Siklu’s equipment gets free internet service from C Spire.
“It actually increases a sense of ownership in the neighborhood,” Sparks said of those hub homes. “And then they go out and they are evangelistic” about the service. Sparks added that C Spire can also deploy the service in ring designs, thus improving reliability.
C Spire owns the kind of millimeter wave spectrum and has vendor relationships that would presumably position the carrier to join Verizon and AT&T on the forefront of FAKE 5G deployments. But 5G is not economical for this type of service, Sparks explained.
“The normal players, they’re just stuck in a business model around a mobility yesteryear,” he said, noting that C Spire is paying around $1,000 for each base station and around $100 for each antenna installed on customers’ roofs. That’s far less than what bigger vendors charge for LTE and 5G equipment. “They’ve got some serious competition that’s currently taking the lead on some price performance.”
“These kinds of players like Mimosa are really innovating in terms of the equipment,” Sparks said.
“We can’t just make this a 3GPP conversation,” he said. “The industry is better served by having some more options in unlicensed under 6 GHz,” he added.
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Author’s Comment:
At this point, it appears that the official FUTURE standard for 5G – IMT 2020- has become irrelevant as every Tom, Dick and Harry wireless carrier claims their new Broadband Wireless Access (BWA) technology is 5G. No matter that BWA is not even an IMT 2020 use case, that the mmWave frequencies used are not yet approved spectrum, and that the focus of all six entities that are proposing IMT 2020 Radio Interface Technologies (RITs) is mobile broadband access-not fixed BWA!
The noise and hype is do deafening, I’m ready to throw in the towel on refuting the non stop, outrageous “5G’ claims!
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Addendum: T-Mobile’s 5G Network
In a recent blog post, T-Mobile CEO John Legere wrote:
5G is a massive inflection point in the user experience. At full deployment the New T-Mobile will deliver fiber-like speeds. I’m talking about average speeds at a blazing 444 Mbps, covering about two-thirds of the country, with jaw-dropping peak speeds up to 4.1 Gbps!! And you won’t have to wait long to see these amazing increases in speed and performance. By 2021 our engineers are planning to deliver 5G speeds 5X faster than the LTE speeds being delivered on the nation’s fastest LTE network today… that is of course the T-Mobile network. During that same time Neville (T-Mobile’s CTO) and his team will also be increasing our LTE speeds!
That will unlock amazing applications and uses, many of which we can’t even conceive of today. It will make possible real-time interactivity from virtually anywhere, allowing for near instantaneous sharing and downloading of content from almost any location.
This will transform the way Americans live, work, travel, and play. Nearly every business in America will use 5G to revolutionize how they create and deliver goods and services. And, every market, ranging from gaming to health care, from AI to transportation, from manufacturing to education will benefit. This merger is an important contributor to American leadership broadly across economic and social lines.
On the companies last quarterly earnings call:
“So, what do you do with a nationwide average of 450 megabits per second?” asked T-Mobile’s Mike Sievert. “Well, first you recognize that that’s way higher than most people get in their home broadband (access) today. So, of course, we can be a competitor in that space. And this is a market that’s incredibly underserved; 53% of high-speed broadband customers have only one choice for high-speed broadband in their area. So there’s a huge opportunity here for us to bring real competitiveness to that market for the first time.”
Author’s Comment:
Despite the extremely optimistic remarks about 5G from the above T-Mobile executives, no one from the company attended last week’s ITU-R WP 5D meeting where IMT 2020 was progressed. Sprint, which hopes to merge with T-Mobile, did send one delegate to the meeting.
IDC: Global IT, telecom spending=$4T in 2018; Economic risks loom for 2019
Global IT and telecom spending will grow 3.7 percent to $4 trillion in 2018, but economic concerns could derail growth in 2019, according to IDC.
In 2017, IT and telecom spending grew at a 4.2 percent clip. IDC said economic issues like tariffs, rising interest rates and growth in China could cut IT spending to less than 3 percent.
Indeed, Daimler issued a profit warning based on Chinese tariffs on its U.S. made cars.
By 2022, annual IT spending should hit $4.5 trillion with software and services, cloud, and digital transformation seeing the most demand. Infrastructure spending has stabilized largely due to cloud spending.
IDC said there’s a likelihood for a mild U.S. recession by 2020, but spending on cost saving software and cloud should provide a buffer for IT spending.
Last year saw a significant rebound in spending on devices, driven by the improving economy and pent-up demand for PC upgrades. The smartphone market performed better than forecast in terms of value, with price increases making up for slowing shipments in many countries. Tablets continued to struggle but will return to modest growth in some countries over the next few years as premium and commercial devices begin to account for an increasing proportion of shipments. Meanwhile, server/storage spending is increasingly driven by cloud hyperscale datacenter buildout but is also benefiting from a significant enterprise upgrade cycle related to product refreshes. IT infrastructure spending, including network equipment, increased by 11% in 2017 and will continue to post annual growth in the range of 8-12% over the next five years even while spending on devices slows again.
“The infrastructure market is increasingly stable because a large proportion is now tied to the service provider model and overall demand for cloud services, which shows no sign of slowing down even in the event of a weakening economy,” said Stephen Minton, vice president, Customer Insights & Analysis. “To some extent, this spending will be more insulated against economic downturns than end-user capital spending, and therefore the IT market will be less vulnerable than it was in the past when any kind of GDP slowdown would translate into big declines for hardware spending. Nevertheless, economic risks are now higher than three months ago.”
US Demand is Stable, but China Facing Slowdown
All regions saw strong demand for technology in 2017, thanks to the broad-based strength of economic performance. The U.S. rebounded from 1.9% growth in 2016 to 4.5% in 2017. Tax cuts will help to ensure another strong year for the U.S. market in 2018, before overall growth is expected to slow. Many economists now expect a mild recession in the U.S. by 2020 at the latest, but the impact on ICT spending will be less than previous downturns due the growth of the service provider model and the increasing adoption of cost-saving software. Meanwhile overall growth in China slowed from 9% in 2016 to 8% last year and will drop to 6% in 2018.
“The economy is gradually slowing in China, but the real reason for slowing ICT growth is because the market is still heavily reliant on mobile devices, which are now seeing higher penetration rates,” said Minton. “Software and services are growing strongly, but still represent a very small proportion of average ICT budgets in China compared to other countries.”
Economy, Cloud, and Mobile Driving Growth
Other regions which posted improving growth in 2017 included Japan (+3%), Western Europe (+2%), Central & Eastern Europe (+3%), Canada (+5%), Asia/Pacific (excluding Japan) (+5%) and the Middle East/Africa (+2%). All of these regions benefited from improving business and consumer confidence, which enabled ICT buyers to work off the pent-up demand that had swelled during the prior years of subdued growth.
“Cloud and mobile are still the big drivers for traditional ICT spending, as legacy products and services like desktop PCs and fixed-line networks either stagnate or begin to decline,” added Minton. “This means what while the overall market is broadly tracking GDP, there is a lot of variation by product category. cloud-related hardware, software, and services are posting strong rates of growth. For example, Infrastructure as a Service (IaaS) is expected to grow by another 37% this year and will continue to grow by around 30% per year over the forecast. This in turn will ensure that cloud service providers continue to invest in server/storage and network infrastructure.”
https://www.idc.com/getdoc.jsp?containerId=prUS44021718
AT&T building NB-IoT network in US, Mexico; LPWAN deployments disappoint
AT&T says it will launch a narrowband internet of things network across the US and Mexico in 2019. “Adding NB-IoT to our portfolio will expand our LPWA capabilities, help drive investment in our evolution to 5G, and support our customers as they deploy IoT solutions across the US and Mexico,” said Chris Penrose, AT&T’s president of IoT Solutions.
“Adding NB-IoT to our portfolio will expand our LPWA capabilities, help drive investment in our evolution to 5G, and support our customers as they deploy IoT solutions across the US and Mexico.”
“It really spans every industry out there, connected cars is one of our biggest verticals where we’re adding over a million cars every quarter; we’ve got tons going on in healthcare, agriculture, retail, manufacturing, and asset tracking,” Penrose told ZDNet.
“You name it, we’ve got different solutions out there, and I think we’ve really established ourselves as a true global player; that’s one of the things we also like to say, we can make it happen for you anywhere in the world.”
According to Penrose, AT&T sees smart cities as being a big area, with traction happening in four to five areas: Energy, such as smart lighting; water, including leak detection, smart irrigation, and water quality maintenance; transportation, for instance parking and optimising traffic flow; and smart infrastructure, including roads and bridges.
“We’ve got solutions in all of those different areas, where we’re able to bring to the cities these kind of solutions that they can deploy into their cities to be able to address those particular areas,” he said.
As a result, AT&T created a series of spotlight cities across Dallas, Atlanta, Chicago, Miami, Portland,, Montgomery County, Mexico City, and various college campus environments wherein it allowed the cities themselves to choose what they wanted to solve, and then worked with them to meet those needs.
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IEEE 802.11ay: 1st real standard for Broadband Wireless Access (BWA) via mmWave
From December 2017 IEEE Communications Magazine (IEEE ComSoc members have free on line access)
IEEE 802.11ay: Next-Generation 60 GHz Communication for 100 Gb/s Wi-Fi
Abstract: The IEEE 802.11ad amendment to the 802.11 standard ratified in 2012 created the first multi- Gb/s Wi-Fi technology by using the large swath of unlicensed spectrum at the mm-Wave band. While enabling multi-Gb/s wireless local communications was a significant achievement, throughput and reliability requirements of new applications, such as augmented reality (AR)/virtual reality (VR) and wireless backhauling, exceed what 802.11ad can offer. For this reason, building upon IEEE 802.11ad, the IEEE 802.11 Task Group ay has recently defined new PHY and MAC specifications that enable 100 Gb/s communications through a number of technical advancements. In this article, we identify and describe the main design elements of IEEE 802.11ay, including MIMO, channel bonding, improved channel access, and enhanced beam forming training. For each of these elements, we discuss how their design is impacted by mm-Wave radio propagation characteristics and present enabling mechanisms defined in IEEE 802.11ay.
Discussion:
IEEE 802.11ay, the next-generation Wi-Fi standard for the 60 GHz band (considered start of mmWave spectrum) increases the peak data rate to 100 Gb/s through supporting multiple independent data streams and higher channel bandwidth, among other advancements, while ensuring backward compatibility and coexistence with Directional Multi-Gigabit (DMG) stations (STAs). We use the terms DMG and Enhanced DMG (EDMG) stations to refer to devices that can support features of IEEE 802.11ad and IEEE 802.11ay standards, respectively.
Channel Bonding and Aggregation
The band allocated to unlicensed use around 60 GHz has approximately 14 GHz of bandwidth, which is divided into channels of 2.16, 4.32, 6.48, and 8.64 GHz bandwidth. The channel center frequencies for the 2.16 GHz channels are: 58.32, 60.48, 62.64, 64.80, 66.96, and 69.12 GHz for channel numbers 1 through 6, respectively [3]. Unlike IEEE 802.11 ad, which only allows for single (2.16 GHz) channel transmission, 802.11ay includes mechanisms for channel bonding and aggregation. In channel bonding, a single waveform covers at least two contiguous 2.16 GHz channels, whereas channel aggregation has a separate waveform for each aggregated channel. IEEE 802.11ay mandates that EDMG STAs must support operation in 2.16 GHz channels as well as channel bonding of two 2.16 GHz channels. Channel aggregation of two 2.16 GHz or two 4.32 GHz (contiguous or non-contiguous) channels and bonding of three or four 2.16 GHz channels are optional.
IEEE 802.11ay Physical Layer (PHY) Overview
Building upon the DMG PHY, IEEE 802.11ay defines a new PHY specification that includes both single carrier (SC) and orthogonal frequency division multiplexing (OFDM) modulations. As described in this section, to support MIMO transmissions and channel bonding while guaranteeing backward capability, a new packet structure is defined in IEEE 802.11ay. The EDMG packet contains new fields necessary to support the additional capabilities defined for EDMG stations, as well as a redefined training (TRN) field that is more flexible and efficient than the one defined in IEEE 802.11ad.
EDMG Packet Format
A single packet format is defined for the three EDMG PHY modes: SC, OFDM, and control. This packet is shown in Fig. 1 with all of its possible fields. Not all fields are transmitted in an EDMG packet; fields are included depending on whether the packet is used for single channel or channel bonding operation, for SISO or MIMO transmission, and if it is used for beamforming training/tracking.
Project Goals (derived from IEEE 802.11ay PAR)
Task Group ay is expected to develop an amendment that defines standardized modifications to both the IEEE 802.11 physical layers (PHY) and the IEEE 802,11 medium access control layer (MAC) that enables at least one mode of operation capable of supporting a maximum throughput of at least 20 gigabits per second (measured at the MAC data service access point), while maintaining or improving the power efficiency per station. This amendment also defines operations for license-exempt bands above 45 GHz while ensuring backward compatibility and coexistence with legacy directional multi-gigabit stations (defined by IEEE 802.11ad-2012 amendment) operating in the same band.
Timeline
| Project Authorization Request approved | March 2015 |
| Initial Task Group Meeting | May 2015 |
| Draft 1.0 of the amendment | November 2017 |
| Draft 1.2 of the amendment | April 2018 |
| Draft 2.0 of the amendment | July 2018 |
| Final 802.11 Working Group approval | September 2019 |
| Final 802 EC approval | November 2019 |
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Editor’s Note on Different BWA proprietary specs based on mmWave spectrum:
A few of the recent high speed fixed wireless broadband access technologies- many are not referred to as “5G”:
1. Qualcomm Technologies, Inc. and Facebook announced they are working together to deliver high-speed internet connectivity with Facebook’s Terragraph technology through the development of a multi-node wireless system based on 60GHz technology from Qualcomm Technologies. Working with leading operators and manufacturers, this terrestrial connectivity system aims to improve the speed, efficiency and quality of internet connectivity around the world at only a fraction of the cost of fiber deployments. Qualcomm Technologies will integrate its QCA6438 and QCA6428 family of pre-802.11ay chipsets with Facebook’s Terragraph technology. This effort will help enable manufacturers to build 60GHz mmWave solutions using the unlicensed 60GHz spectrum and provide Fixed Wireless Access (FWA) to offer consumers in urban areas access to high-speed broadband connections. The companies expect to begin trials of the integrated solution mid-2019. It’s based on a pre-standard version of IEEE 802.11ay, which is described in this article.
IEEE 802.11ay: Enhanced Throughput for Operation in License-Exempt Bands above 45 GHz – Sept 2019 approval is expected by the IEEE 802.11 WG.
http://www.ieee802.org/11/Reports/tgay_update.htm
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2. Verizon 5th Generation Radio Access; Physical layer AKA V5G.201 V1.0:
The radio interface described in this specification covers the interface between the User Equipment (UE)
and the network. The radio interface is composed of the Layer 1, 2 and 3. The TS V5G.200 series
describes the Layer 1 (Physical Layer) specifications. Layers 2 and 3 are described in the TS V5G.300
series.
http://www.5gtf.org/V5G_201_v1p0.pdf
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3. Huawei’s “5G” BWA Terminal (announced at MWC 2018):
Huawei’s 5G customer premise equipment (CPE) is developed based on the 3GPP standards and chipset architecture. It is compact in size, low in power consumption, and highly portable. As the smallest 5G commercial terminal in the world, it supports C-band and mmWave. In Seoul and Canada, there have been the world’s first wave of 5G subscriber who use Huawei’s commercial 5G terminals. Based on 3.5 GHz and mmWave spectrum, users can enjoy a fiber-like experience of wireless home broadband services with the rate exceeding 2 Gbps.
http://www.huawei.com/en/press-events/news/2018/2/Huawei-Launches-Full-Range-of-5G-End-to-End-Product-Solutions
Dr. Wen Tong, Huawei Wireless CTO said: “The high mmWave technology can achieve unprecedented fiber-like speed for mobile broadband access. This trial has shown the capabilities of E-band combined with MIMO technology to deliver exceptional user experience in a full multi-call campus environment. With customer-centric innovation in mind, Huawei will continue to push the technology envelope jointly with our customer to deliver best-in-class advanced wireless solutions.”
http://www.huawei.com/en/press-events/news/2018/2/DectschTelckom-5G-High-mmWave-Technology
Finally, Huawei’s 5G BWA terminal (using mmWave spectrum) will be deployed by GlobeTelecom in the Philippines as per this article.
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BWA and 5G/Network Slicing:
Finally, it’s important to note that BWA is NOT a use case for IMT 2020 (standardized 5G). That means that the candidate RIT specs do NOT have to meet any criteria for BWA send/receive or frequency spectrum used.
One IEEE member pointed out that with “network slicing” any high speed application can be a 5G use case. The problem with that is there is no official standard for how 5G/IMT 2020 network slicing is supposed to work. Yes, we know that ITU-T SG13 is working on the non radio aspects of IMT 2020, including network slicing. But it’s from a reference architecture and functionality perspective, not a detailed spec for interoperability.
Here is IEEE’s position on 5G network slicing. and a survey article I put together.
Verizon/Nokia Test 3GPP NR Spec using Multi-Carrier Aggregation
Verizon and Nokia reported testing “5G” New Radio (3GPP release 15) technology in the outdoors using multi-carrier aggregation to boost the transmitted signals. Verizon deployed its 28 GHz millimeter-wave spectrum in the trial, saying it cut latency to 1.5 milliseconds while transferring data at 1.8 gigabits per second.
“By continuing to push the technological envelope and make advancements like these, we’re driving the ongoing development of 5G technology and bringing it to life for our customers,” said Sanyogita Shamsunder, vice president, 5G Ecosystems & Innovation for Verizon. “Verizon continues to lead the way toward the realization of true 5G technology.”
Marc Rouanne, president of Nokia Mobile Networks, focused on the outdoor element of the testing in a press release. “Nokia is committed to supporting Verizon’s advanced effort to bring 5G to commercial reality,” he said. “Our successful trial pushes the testing distance and because it has been conducted outside, tests the interference variables in an outdoor environment. This is a major milestone for preparing Verizon for widespread 5G implementation.”
Transmitting interactive VR and 4k video streams outdoors required a consistent, stable, reliable 3GPP NR 15 network connection. Adding in carrier aggregation over four carriers increases the bandwidth and speeds of the transmissions to the levels promised by true 5G technology. When customers begin to use 5G NR technology, they will look to leverage that type of reliable connectivity to stream high-definition video without buffering, experience improved AR/VR capabilities, and use other mobile 5G solutions in ways we haven’t yet imagined.
Previous Nokia/Verizon 5G tests were done in the lab and were only brief data packet transmissions. The testing announced today is far closer to the way in which subscribers actually will use the 5G. Verizon says it will launch stationary 5G in Los Angeles, Sacramento and two other U.S. markets during the second half of the year. A mobile version will follow.
Nokia and Verizon are cooperating deeply on 5G. In February, the companies – along with Qualcomm – successfully tested a 3GPP-compliant NR 5G call. The call was made over licensed spectrum on a 5G NR prototype device from Qualcomm. The spectrum was provided by Verizon and the networking technology by Nokia. The test was conducted at a Nokia facility in Murry Hill, N.J.
The competition to announce 3GPP compliant NR deployment is intense. Nokia also is working with T-Mobile. Last week, the wireless carrier said that the companies completed a bi-directional over-the-air 5G data session on a 3GPP-compliant NR system at T-Mobile’s Bellevue, WA lab.
Note: All should know that 3GPP is not a standards body and that their NR specification has not been submitted to ITU-R WP 5D for IMT 2020. The first 3GPP submission for IMT 2020 RIT won’t be till late July 2019.
References:
Analysis & Huge Implications of AT&T – Time Warner Merger
Disclaimer: The author has been an AT&T customer for over 50 consecutive years (Ma Bell, Pac Bell with AT&T long distance, SBC, AT&T Broadband (now Comcast), and the current AT&T). He currently subscribes to AT&T: U-verse “high speed” Internet , U-verse pay TV, POTS and wireless voice/data services.
Summary:
Judge Richard Leon of the the US District Court for the District of Columbia ruled today that AT&T and Time Warner can merge, without any concessions or strings attached. This was a huge rebuke for the US Justice Department, which had argued that the deal would be anti-competitive (See Author’s Opinion below). The judge’s 200-page opinion permits the $85.4 billion (or $108.7 billion including debt) deal to go forward with no conditions imposed. The transaction will close on or before June 20, AT&T’s lead lawyer, Daniel Petrocelli, told reporters after the ruling. AT&T will now own pay TV channels such as HBO, TNT, TBS, and CNN which it currently distributes on it’s U-verse, DirecTV, and DirecTV Now pay TV platforms. It will also own Warner Brothers which includes DC Entertainment.
The merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to Thomson Reuters data. AT&T will take on a large amount of additional debt to clinch the Time Warner pact, with its long-term debt rising from $134 billion to more than $175 billion.
The Department of Justice released a statement after the decision, saying, “We are disappointed with the Court’s decision today. We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner. We will closely review the court’s opinion and consider the next steps in light of our commitment to preserving competition for the benefit of American consumers.”
On the other hand, AT&T General Counsel David McAtee said in a statement: “We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner. We thank the Court for its thorough and timely examination of the evidence, and we compliment our colleagues at the Department of Justice on their dedicated representation of the government. We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative.”
In a scathing opinion, Judge Leon urged the U.S. Department of Justice not to seek a stay of his ruling, saying it would be “manifestly unjust” to do so and not likely to succeed. If the Justice Department can’t win an emergency stay during appellate litigation, AT&T and Time Warner will be free to go ahead and close their deal.
“That’s a legal shocker.” said J.B. Heaton, an attorney and consultant on litigation and regulatory proceedings. “I think we’ll see now that companies will be much more confident about vertical mergers,” he added, referring to acquisitions which tie together different parts of a business, such as production and distribution.
Judge Leon previously approved Comcast’s acquisition of NBC Universal in 2011. In that case, he added a list of conditions the new entity was required to follow. Among those, Comcast agreed not to gouge competitors who wanted to carry NBC content and not to create a service entirely made up of Comcast or NBC content. Not so for this deal. The Justice Department had pressured Time Warner to sell Turner Broadcasting, which includes the cable news operation CNN, or other segments of the business, which both companies resisted. But Judge Leon rejected that argument.
In his opinion, Leon cited the “tectonic changes” brought about by the likes of Netflix, Hulu and Amazon and other OTT content providers which has enabled many video consumers to cut the cable cord. “AT&T and Time Warner concluded that each had a problem the other could solve,” he wrote. “Together, AT&T and Time Warner concluded that both companies could stop ‘chasing taillights’ and catch up with the competition.”
Other Media Deals Brewing:
On Monday, CNBC reported that Comcast was preparing to bid for 21st Century Fox if the AT&T deal went through, playing off a more permissive judicial atmosphere for major content acquisitions. Disney has already bid for the studio, and it’s still unclear which company will actually end up owning it, but the overall point is hard to miss. The only question is how they’re planning to press their new advantage.
It will be interesting to see if there’s now a bidding war between Comcast and Disney which both want to acquire 21st Century Fox. One can certainly expect the pace of mergers and acquisitions to accelerate due to this “green light” ruling.
Author’s Opinion:
At the root of almost all mergers is a quest for more market power, or simply put, the ability to knock out competitors and raise prices. Pricing power is something AT&T and the other distributors of media have been losing as consumers flock to cheaper online streaming services (like Netflix Inc, Hulu, You Tube, etx) where the profit margins are much tighter. That’s after intense competition from T-Mobile US Inc. drove other wireless carriers to lower the cost of mobile-data plans. The struggle to find growth also isn’t something unique to the media giants, which is why once unthinkable mega- mergers are being considered.
The end of net neutrality, which became official this past Monday, makes this kind of content creator/distributor merger more alarming for consumers. AT&T already controls DirecTV and offers a zero-rating deal for AT&T Wireless customers who want to stream DirecTV content directly to their device without hitting data caps. With no restrictions on throttling or paid prioritization, those deals can get broader and more aggressive over time. AT&T is investing heavily in DirecTV Now as their flagship OTT video service. Now they can add all the Time Warner channels at lower cost and with no data caps for their broadband and wireless customers. And provide a fast lane (prioritized Internet traffic) for an expanded DirecTV Now! AT&T will now also own HBO Go streaming service, which might continue as a stand alone OTT service and/or be folded into DirecTV Now.
While the net neutrality issues are well-known, there’s less focus on the content side of the business, which has been particularly affected by the latest round of pending acquisitions. The output of the conventional studio system is increasingly concentrated in the hands of just a few mega-corporations like Disney (ABC, ESPN, Disney channels, etc), Comcast (NBC Universal), and AT&T (Time Warner). So while Netflix and Amazon are dealing with the post-net-neutrality challenges of streaming video over someone else’s network, they’ll also have to worry about where they get the content from. Everyone knows Netflix and Amazon have created quality video content, but that alone won’t be sufficient to compete with the mega media/ ISP companies (Comcast is the largest ISP in the U.S.).
With the end of net neutrality, AT&T and Verizon can prioritize their own movies and TV shows, to the likely disadvantage of rivals such as Netflix, Hulu, Amazon, YouTube and future startups.
When Disney’s long-planned streaming service launches next year, the company will stop licensing Marvel and Star Wars movies to Netflix and show them exclusively on its new service instead. If AT&T follows suit, the forthcoming DC Universe streaming service could end up tied to HBO Go or DirecTV Now. Or they all could be folded into DirecTV Now. We think that video content studios and talent will start to line up behind their sister streaming services, and it will get harder and harder for OTT content providers to enter the video streaming market.
If AT&T wants to withhold “must have” programming from a rival telecom company, or charge more for it, that company cannot readily replace it. That was the crux of the government’s case — that vertical mergers, at least in this context, can reduce competition and harm consumers.
On the consumer side, less competition almost always causes prices to be raised. Also, with less competition, companies have less incentive to provide good customer service and better products — because consumers have few options about where to take our business if we’re unhappy. Finally, companies also are less motivated to innovate when there isn’t a lot of competition. The implication here is that AT&T may invest less in mass market “5G” infrastructure (based on ITU-R IMT 2020 recommendations) and more on Direct TV Now streaming service and related video content.
Rob McDowell, former commissioner at the Federal Communications Commission and partner at Cooley LLP:
“The decision shows that the court recognizes that the marketplace is changing and business models are converging. Yesterday’s definitions of old channels of commerce are quickly becoming obsolete.”
Gene Kimmelman, a Justice Department antitrust official under the Obama administration and president of public-interest group Public Knowledge:
The ruling is a “very dangerous development for consumers. This enables the content and transmission companies to further consolidate and maintain their control over large bundles and high prices whether delivered on cable satellite or broadband.” Mr. Kimmelman predicted “an avalanche” of new transactions that would further consolidate the video and entertainment industries.
Mike White, former CEO DirecTV:
“This is just another major move in an industry undergoing profound change and disruption.”
“This merger will only accelerate the explosion of video streaming options at the further expense of traditional linear television.”
Gigi Sohn, former counselor to Tom Wheeler, ex-chairman of the FCC, and distinguished fellow at the Georgetown Law Institute for Technology Law & Policy:
The deal is likely to raise the price of Time Warner products and reduce programming choices, Ms. Sohn said. “I’ve never seen a media merger that’s had any benefit to consumers and this one is certainly no different. I think you’re going to see every cable and broadband provider looking to pair up with Hollywood studio programmers.”
Larry Downes, project director of the Center for Business and Public Policy at Georgetown University’s McDonough School of Business:
Mr. Downes said he expects to see a flurry of deal making, starting with Comcast formalizing its bid for 21st Century Fox assets. “What’s really going on here is the incumbents on the content and distribution side are so far fighting a losing battle against the new entrants. These deals are not signs of strength, they are almost desperate efforts to come up with new combinations of assets they can use to compete with Netflix and Hulu.”
“It really was a stunning rebuke of the Department of Justice,” said media analyst Craig Moffett. “Judge Leon was wholly unpersuaded by their case.”
Author David Dayan wrote: “While Judge Leon took pains to say in his ruling that “the temptation by some to view this decision as being something more than a resolution of this specific case should be resisted by one and all,” it’s hard to disassociate this smackdown from the cases to come. Any companies looking to merge can likely be confident that, even if they don’t intimidate the antitrust agencies out of challenging them, the courts will have their back. The champagne must be flowing in boardrooms tonight.”
End Quotes:
New York Times columnist Farhad Manjoo wrote about the end of net neutrality in two separate pieces::
“Today, the internet is run by giants. A handful of American tech behemoths — Amazon, Apple, Facebook, Google and Microsoft — control the most important digital infrastructure, while a handful of broadband companies — AT&T, Charter, Comcast and Verizon — control most of the internet connections in the United States.”
“As I’ve noted often in the last few years, big companies have been crushing small ones over and over again for much of the last decade. One lesson from everything that has happened online recently — Facebook, the Russians and Cambridge Analytica; bots and misinformation everywhere — is that, in the absence stringent rules and enforcement, everything on the internet turns sour. Removing the last barriers to unfair competition will only hasten that process.
It’s not going to be pretty.”
With AT&T acquiring Time Warmer, big tech and media companies will likely get bigger via mergers and acquisitions. That means more control, less competition, and little or no regulatory oversight. Let us know how you feel about that by posting a comment in the box below.
Juniper Research: Cellco revenues to fall by $50B over next 5 years
Juniper Research has identified a series of new revenue opportunities and cost savings which collectively could enable operators to sustain, or even increase, margins. Here are two of them:
The study claimed that the opportunities afforded by the IoT (Internet of Things) should enable operators to increase revenues from that sector by over $8 billion by 2022. It also argued that A2P messaging adoption across a number of key verticals including marketing, banking and healthcare should result in a similar uplift in revenues from that source.
Meanwhile, the report highlighted a series of measures by which costs could be reduced, including network virtualization, the implementation of next-generation firewalls and improving customer relationship management.
The research also assessed the extent to which 15 leading operators across Europe and North America were in a position to implement innovation strategies. The Juniper Operator Innovation Index identified 2 main players, AT&T and BT, as “Leaders” in this space.
According to research author Dr Windsor Holden, “AT&T is a market leader in terms of IoT implementations and adoptions, while both AT&T and BT are at the forefront of research into (and deployment of) virtualizsation of the network.”
For more insights, download Juniper’s complimentary whitepaper, ‘Mobile Operators ~ 5 Mission Critical Strategies to Future-proof Your Business.’
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Intriguing claim: Cellco IoT revenue grows fast, but not fast enough
Operators’ enterprise reporting is poor and reporting on IoT is even worse. We are aware of only four operators (Telstra, Telefónica, Verizon and Vodafone) that regularly report IoT revenue, and only 11 that report connection numbers. For a segment that is supposedly key to future growth, operators are remarkably shy about providing progress updates.
The operators that do provide information are, by definition, atypical. That they are providing data at all probably skews the sample. We can, however, still glean some useful insights by exploring the data that is available.
IHS Markit: Data Center and enterprise LAN SDN market totaled $4.4 Billion in 2017
Data Center & Enterprise SDN Hardware and Software Market Tracker from IHS Markit:
Highlights:
- Global data center and enterprise LAN software-defined networking (SDN) market revenue—including SDN-in-use bare metal and branded Ethernet switches and SDN controllers—is anticipated to reach $15.8 billion by 2022.
- Bare metal switch revenue came to $790 million in 2017, representing 26 percent of total in-use SDN-capable Ethernet switch revenue.
- Data center SDN controller revenue totaled $1.2 billion in 2017, and is expected to hit $4 billion by 2022, when it will represent 17 percent of data center and enterprise LAN SDN revenue.
- Cisco is number-one with 21 percent of 2017 in-use SDN revenue, VMware comes in at number-two with 19 percent, Arista at number-three with 15 percent, White Box at number-four with 12 percent and Huawei at number-five with 7 percent.
Notes:
- White Box is No. 1 in bare metal switch revenue, VMware leads the SDN controller market segment, Dell owns 44 percent of branded bare metal switch revenue in the second half of 2017, and HPE has the largest share of total SDN-capable (in-use and not-in-use) branded Ethernet switch ports.
- White box also ranked No. 1 in data center server revenue, pulling in 21 percent of the market in the first quarter, or $3.8 billion. Dell EMC dropped to second place in revenue at 20 percent ($3.6 billion), followed by Hewlett Packard Enterprise (HPE) at 18 percent ($3.2 billion).
IHS Markit analysis:
The data center and enterprise LAN market is maturing. In-use SDN revenue totaled $4.4 billion worldwide in 2017, and is expected to hit $15.8 billion by 2022. Innovations continue, with bare metal switch vendors announcing 400GE switches with new programmable silicon that incorporates an on-chip ARM processor to support artificial intelligence (AI) and machine learning (ML) and allows data plane protocols to be modified without changing silicon. Also of note, Edgecore Networks (Taiwan) contributed its 440GE switch design to the Open Compute Project (OCP).
SDN controllers for the data center also continue to add functionality, with increased support for interconnecting multiple on-premises data centers, and with support for interoperation between cloud service provider (CSP) data centers and enterprises as they build multi-clouds. Other notable enhancements include features that support container networking and integration with container management software such as Kubernetes.
Data center and enterprise LAN SDN is now mainstream and the market is expected to grow.
“Not all the $15.8 billion in revenue in 2022 is new. SDN-capable Ethernet switch revenue is existing revenue, and a portion of SDN controller revenue is displaced from the Ethernet switch market due to reduced port ASPs,” said Cliff Grossner, Ph.D., senior research director, IHS Markit. “Some network operators will elect to use bare metal Ethernet switches when deploying SDNs and rely on SDN controllers for advanced control plane features,” Cliff added.
About the report
The IHS Markit Data Center & Enterprise SDN Hardware & Software Market Tracker provides market size, market share, forecasts, analysis and trends for SDN controllers; SDN-capable bare metal Ethernet switches and branded Ethernet switches; and SD-WAN appliances and control and management. Vendors tracked include Arista, Aryaka, Cisco, Citrix, CloudGenix, Dell EMC, Fatpipe, HPE, Huawei, InfoVista, Juniper, NEC, Riverbed, Silver Peak, Talari, VMware, White Box, ZTE and others.
