Profile of Prolific Inventor & ComSoc NA Director Yigang Cai
Introduction and Overview
For the third time in four years, ComSoc NA Director Yigang Cai, PhD was honored with the 2011 Bell Labs Inventors Award in the Product and Services group category. His contributions cover Messaging, Mobile Applications and Mobile Service technology and markets. The annual Bell Labs Inventors Award recognizes and honors individuals who exemplify excellence, innovation and creativity by outstanding patent contributions across Alcatel-Lucent (ALU).
In addition to being a prolific inventor, Yigang did a splendid job as ComSoc NA Distinguished Lecture Tour (DLT) Director in 2009-2011. As ComSocSCV Chair, this author was very impressed with Dr. Cai’s dedication and strong commitment to that volunteer job. This year (2012), we’ve collaborated on several issues that improved operations of local ComSoc NA Chapters.
About Yigang Cai, PhD
Yigang Cai was an Associate Professor in Department of Mechanical Engineering at Zhejiang University before he moved to the United States in 1989. He obtained his BS, MS and PhD degrees from Zhejiang University, Hangzhou, China. Yigang joined AT&T-Bell Labs in 1995. He has worked as a systems engineer in his Lucent, and Alcatel-Lucent (ALU) career and engaged in research and development of many wire-line and wireless communication products. Dr. Cai became a Distinguished Member of Bell Labs Technical Staff in 2000.
An Inventor Par Excellence!
As of July 31, 2012, Yigang has filed 231 US patent applications, and had 145 patents granted worldwide. That’s a phenomenal total by any stretch of the imagination!
Yigang’s numerous invention submissions address a wide range of technology areas. During 2010- the most recent ALU Inventor time period- Yigang’s contributed total forty-three patent filings:
- Twenty-nine contributions address VOIP and Web Applications such as Location Based Services, Messaging, Subscriber Data Management and Profiling, Billing/Payment Systems, IMS Solutions and VoIP Infrastructure.
- Eleven contributions address Mobile/Wireless Core Networks including the Mobile Switching Center, Mobility management, the Evolved Packet Core, Handsets, 3GPP Services, and LTE.
- Two contributions address Video and Media Applications such as Multimedia Applications, and TV Video Applications.
- One contribution addresses Service Aware Networks such as Multimedia Gateways.
Many of Yigang’s contributions have been implemented in ALU products and delivered to customers such as Verizon Wireless (VZW). Others are under development so that they can be included in new ALU products that are expected to be delivered to customers, including VZW and AT&T, in the near future.
Yigang’s contributions impact ALU products that include LTE SMS GW, SMSC, MSC, 5119 BMGW, real time payment system (8610 ICC and 8620 SurePay) policy control manager (5780 DSC), Universal Message Center. Yigang continues to be one of the most prolific inventors in ALU. Yigang’s contributions are not only numerous but are also high in quality. In particular, thirty-one of Yigang’s forty-three contributions have been designated by ALU as “high quality” (i.e., internal rank 1 or 2) and are scheduled for international patent filing. Several contributions have been submitted to standards development organizations for potential adoption. Moreover, substantial contributions have been made in ALU focus areas, which include: Messaging, Subscriber Data Management and LTE. Many of those are likely to be implemented in ALU products.
Yigang is one ALU employee who surely does not work in a silo. While several contributions are solo efforts, many are collaborative efforts with a variety of different inventive teams, with other co-inventors of individual inventive teams being located in China, Europe, the United States, or all three continents. For many of these border-crossing collaborative invention teams, Yigang is the lead US-based co-inventor.
An ALU employee that worked with Yigang and drafted several of his patent applications said, “I find him extremely collegial, always willing to share his expertise so that the best end-product/result is achieved. He is responsive throughout the patent process, responding faithfully and timely despite other, enormous demands on his time.”
That’s a very powerful testimonial! ComSoc is most fortunate to have Yigang Cai as our NA Director. If you have the opportunity to work with him, you are most fortunate!
Appendix: Yigang’s top 10 patents in 2010 (the most recent ALU time frame)
In the considered ALU time frame, Yigang contributed to forty-three positive filing decisions. Ten contributions currently considered of most commercial import follow:
1. Message Delivery over LTE Networks (3GPP Services).
Contribution embodiment/s address LTE messaging strategy, architecture and methods and are the basis for a brand new ALU product LTE SMS GW which will be deployed to VZW network in 2010.
2. Sequential Message Delivery for FDA Processing and Store-and-Forward Processing (Messaging).
Contribution embodiment/s propose a key evolution with a FDA/MDA configuration of SMS/MMS network, were built into ALU’s SMSC release 11.0 and deployed to the VZW network beginning in November of 2009 when VZW began a network upgrade from the current single SMSC to a FDA/MDA configuration. ALU has 58 pair of SMSC (~50 sites) in the VZW network and the configuration of most will be upgraded. ALU revenue confirmed from VZW will be ~$40 million in 2010-11 for 4 geo-sites. The complete network upgrade is expected to take at least 5 years and while ALU does not have VZW’s commitment yet, the upgrade’s revenue impact is conservatively estimated at ~$120 million.
3. Voice Notification to the Destination of a Text Message That is Engaged in a Voice Call (Messaging).
Contribution embodiment/s create a ‘whispering’ SMS when an end user is in a voice session. ‘Whispering SMS’ is expected to be a great application in the near future.
4. SIP Response Encapsulation for SMS Delivery over IP Network (Messaging).
Contribution embodiment/s provide a new method in SIP messaging so that SMS can be delivered over IP networks, eliminating unnecessary delivery acknowledgement/ report messaging and handling. The method can be used for other SIP applications and standards evolution. Its first application will be in the VZW network.
5. Messaging Waiting Notification to External Message Center (Mobile Switching Center).
Contribution embodiment/s were a key MSC feature for the Verizon Wireless (VZW) network. FDA/MDA evolution. Embodiments were implemented in ALU MSC and delivered to VZW.
6. SMS Message Delivery over Broadband Data Networks (Evolved Packet Core or EPC).
Contribution embodiments provide a new direct SMS delivery over EVDO (3G) network when bypassing MSC and SMSC. Embodiments were implemented in a new ALU product 5119 BMGW and deployed in VZW network in November of 2009. Similar embodiments were deployed for AT&T in 2011.
7. A Method for Delivering Dynamic Policy Rules to an End User, According on Subscribers Account Balance and Service Subscription Level (Billing).
Contribution embodiment/s provide a new method for interactions between OCS and PCRF in 3GPP policy and charging control (PCC) for mobile broadband services, IPTV and other applications. The contribution is an ALU value position to enhance the PCC capability on the real time payment system (8610 ICC and 8620 SurePay) and the policy control manager (5780 DSC).
8. Text Messaging over an eHRPD Network (Messaging).
Contribution embodiment/s provide a SMS/MMS message deliver over LTE/eHRPD networks. The contribution is in a road map and will be implemented in a new ALU product Universal Message Center for North America and other regions’ customers.
9. Charging Method Selection for Service Data Flows Based on the Data Services Being Requested (Billing).
Contribution embodiment/s allow LTE gateways and the PCEF to consult charging rules to the PCRF when providing flow and service data to the PCRF, during establishing and updating IP-CAN. The contribution will significantly enhance 8610 ICC and 8620 SurePay by involving LTE/EPC network charging.
10. Registration Notification for SMS over LTE (Mobile Management/ Evolved Packet Core).
Contribution embodiment/s provide a method for subscriber databases (HSS and/or AAA) to push a registration notification to IP-SM-GW when subscriber registers/ deregisters to LTE/EPC networks. The contribution will be built in a roadmap into HSS/AAA and a new ALU product Universal Message Center.
Yigang with ALU CEO Ben Verwaayen:
AT&T Acquiring & Shifting 2G Wireless Spectrum to Support LTE Network Buildout
AT&T has taken two major steps to gather additional wireless spectrum to build out its Long Term Evolution (LTE) network over the next five years. AT&T has repeatedly stated that it will soon run out of the necessary airwaves to adequately meet the wireless demands of its customers if it doesn’t get more spectrum. The company made two announcements last week to gain more spectrum.
1. On Aug. 2, AT&T agreed to acquire NextWave Wireless, a failing carrier with spectrum that the Federal Communications Commission has been trying to repurpose for years.
The plans for the NexWave LTE spectrum are also a ways off. While NextWave is in dire financial straits, the use of its spectrum for LTE data services has yet to be approved by the FCC. However, the owner of the adjacent spectrum, Sirius XM and AT&T filed a joint proposal that would clear up a number of engineering issues and as a result would open the 2.3GHz Wireless Communications Service (WCS) to use as an LTE data band. The FCC filing outlined a number of limitations on WCS operations that would prevent AT&T’s WCS operations from interfering with Sirius XM’s audio services.
AT&T bought NextWave at the bargain-basement price of $25 million, plus a contingent payment of about $25 million plus cash and other assets to pay off NextWave’s debt, for a total of $600 million. NextWave originally bought the WCS spectrum in 1997, but was involved in a protracted legal battle with the FCC after NextWave declared bankruptcy and defaulted on its payment for the spectrum. NextWave got the rights to the spectrum in 2004, but has been unable to use the spectrum because of the potential for interference with Sirius XM.
2. In an Aug. 3 FCC filing, AT&T announced that it would phase out its 2G data network by the beginning of 2017. This will enable the company to free up spectrum for added capacity on its 3G and LTE mobile Internet network.
“Throughout this multi-year upgrade process, we will work proactively with our customers to manage the process of moving to 3G and 4G devices, which will help minimize customer churn,” the company said in the filing.
As of June 30th, roughly 12 percent of AT&Ts contract customers were still on its 2G network, which is primarily designed for voice and text messages, with relatively low data speeds. An AT&T spokesperson told eWEEK that AT&T will be working with customers who are still using 2G services to provide options that will meet their needs. AT&T has relatively few customers who currently depend on 2G data, and that number is expected to diminish through attrition by 2017. AT&T no longer sells 2G devices. By freeing up 2G spectrum, AT&T will have more space available for LTE, in much the same way that Sprint is phasing out its iDEN spectrum so it has room for LTE. Currently, it’s unclear which of its services AT&T considers 2G and plans to shut down. ( eWEEK questions to the AT&T spokesperson did not provide details as to what services in AT&T’s spectrum are planned for shutdown when support for 2G ends.)
GSM, which is what AT&T uses for its voice technology is the international standard and is used throughout the world, is technically a 2G standard, but the 2G data standard that AT&T uses is General Packet Radio Service (GPRS), which is not widely used although it is widely available on the AT&T network.
For more information, please see this eWEEK article:
Comment & Analysis
Mr. Téral adds: “The prophecies of doom for mobile operators’ SMS/MMS cash cow are being overplayed. Despite the popularity of over-the-top messaging applications like Apple’s iMessage and WhatsApp, our data shows SMS growing every year from 2012 to 2016, delivering a cumulative $1 trillion in operator revenue during those 5 years. And over that same period, voice revenue will decline only slightly, still making up a sizable chunk of operator revenues.”
Another issue with the spectrum swap from 2G to 3G/4G is timing. Won’t AT&T need a lot more spectrum for 3G/4G and even LTE Advanced before 2017?
IEEE 802.16 Wireless MAN (WiMAX) Session #80 (July 2012) Meeting Report
IEEE 802.16’s Session #80 was held on 16-19 July 2012 in San Diego, California, USA. This was an IEEE 802 LMSC Plenary Session and co-located with sessions of the other IEEE 802 Working Groups and Technical Advisory Groups. The attendance was 32 (Editors Note: attendance was way down from previous sessions for obvious reasons).
HetNet Study Group
The new IEEE 802.16 WG Study Group (SG) on the WirelessMAN Radio Interface in Heterogeneous Networks (HetNet Study Group) met for the second time. The IEEE 802 EC renewed the Study Group though Session #82. Following activities during the session, the HetNet SG is now proceeding with three separate topics:
Work toward an “OmniRAN” project using an Open Mobile Network Interface (OMNI) was advanced by presentation of an IEEE 802 Tutorial on OmniRAN the evening of 16 July.
The HetNet SG issued a Call for Contributions:
OmniRAN Standard for an IEEE 802 HetNet, which includes a Call for Comments on draft text toward an OmniRAN Project Authorization Request (PAR).
Following comment resolution, the Study Group’s PAR P802.16q, on a Multi-Tier amendment to IEEE Std 802.16, was concluded and then forwarded by the 802.16 WG and the IEEE 802 Executive Committee (EC). It is on the 29 August
NesCom agenda and could be authorized by the IEEE-SA Standards Board on 30 August. The SG issued a Call for
Contributions on the topic.
In response to contributions, the SG issued a Call for Contributions: Small-Cell Backhaul (SCB) Enhancements to WirelessMAN-OFDMA soliciting input with an intent to develop a PAR and Five Criteria at Session #81.
Metrology Study Group
The IEEE 802.16 WG Study Group on Broadband Wireless Access Metrology (Metrology Study Group) met for the second time. Following comment resolution, the Study Group’s PAR P802.16.3 on Mobile Broadband Network Performance Measurements was forwarded by the 802.16 Working Group and the IEEE 802 EC. PAR P802.16.3 is on the 29 August NesCom agenda and could be authorized by the IEEE-SA Standards Board on 30 August. The IEEE 802 EC renewed the Study Group though Session #82, and it remains open to investigation of other possible projects as well. The SG issued a Call for Contributions on Broadband Network Performance Measurements and drafted a second such Call for Contributions, withholding release pending action of the IEEE-SA Standards Board regarding the PAR. The SG summarized its work in a closing report and minutes.
GRIDMAN Task Group
The Working Group’s GRIDMAN Task Group resolved comments received during the second recirculations of WG Letter Ballot #37 and WG Letter Ballot #38, in which drafts P802.16n and IEEE P802.16.1a are under review. In each
case, a 15-day confirmation ballot will run from 27 July through 11 August. Based on conditional approval granted by the 802 EC, both drafts may proceed to Sponsor Ballot, closing prior to Session #81, dependent on successful recirculation. The TG issued a closing report and minutes.
Machine-to-Machine Task Group
The Machine-to-Machine (M2M) Task Group did not meet at Session #80. The 802.16 WG approved comment resolutions agreed by the TG at an earlier teleconference and agreed to initiate a third Sponsor Ballot recirculation. The
802 EC granted conditional approval to forward both M2M drafts (P802.16p and P802.16.1b) to RevCom. Both have been submitted for the 29 August RevCom agenda, pending successful recirculation, and could be authorized by the IEEE-SA Standards Board on 30 August. The TG Chair issued a closing report.
Maintenance Task Group
The P802.16Rev3/D6 and P802.16.1/D6 drafts were approved as, respectively, IEEE Std 802.16-2012 and IEEE Std 802.16.1, on 8 June. The Maintenance Task Group met informally to review a pre-publication editor’s draft of IEEE Std 802.16-2012. Volunteers are invited to participate in a similar exercise regarding IEEE Std 802.16.1. Publication of both standards is expected this summer. The TG Chair issued a closing report and minutes.
ITU-R Liaison Group
The ITU-R Liaison Group drafted contributions to ITU-R Working Party 5D (WP 5D) regarding IMT-2000 and IMT-Advanced updates. The two drafts were approved by the 802.16 Working Group, the 802.16 Radio Regulatory TAG, and
the IEEE 802 EC. The ITU-R Liaison Group also completed liaison statements to its partner organizations regarding the IMT-2000 and IMT-Advanced activities.
One of these statements (802.16-12-0515) solicits input regarding IMT-Advanced sharing parameters prior to Session #81, in response to an invitation from WP 5D to address activity in preparation for the 2015 World Radiocommunications Conference. The Liaison Group will meet at Session #81 to prepare the resultant contribution to WP 5D. For more details,
see the closing report.
Project Planning Committee
The WG’s Project Planning Committee met for one period during Session #80. It confirmed the IEEE 802.16 Ballot Schedules. The committee began review of two input contributions on direct mobile communication for proximity-based
applications. The Committee issued a closing report.
Session #81 will take place on 17-20 September 2012 in Indian Wells, CA, USA in conjunction with the IEEE 802 Wireless Interim. The GRIDMAN TG, HetNet Study Group, Metrology Study Group, ITU-R Liaison Group, and Project Planning Committee will meet.
Session #82 will take place on 12-15 Nov 2012 in San Antonio, TX, USA in conjunction with the IEEE 802 Plenary
Session #83 will take place on 14-17 Jan 2013 in Vancouver, BC, Canada in conjunction with the IEEE 802 Wireless Interim.
Complete report with links to meeting reports and minutes is at:
http://ieee802.org/16/meetings/mtg80/report.html
Session #84 will take place on 18-21 Mar 2013 in Orlando, FL, USA in conjunction with the IEEE 802 Plenary Session.
Huawei gaining on Ericsson for leadership in network infrastructure equipment sales
FT: Huawei is challenging Ericsson to become the world’s largest telecom equipment vendor by sales following a decade-long push by the Chinese company to shake up the industry. Huawei said on Tuesday its revenue in the first six months was Rmb102.7bn ($16.1bn), up 5.1 per cent compared with the same period in 2011.
Close to a quarter of all sales at the Huawei are through consumer businesses such as handsets. However, while revenues have continued to build for Huawei, the company said operating profit in the first six months fell 22 per cent from last year to Rmb8.79bn. The company, which is not listed, did not announce net earnings but said it “maintained robust growth momentum although the global economic situation and telecom equipmentmarket remains a significant challenge”
Ericsson last week reported a drop in first-half revenue to SK106.3bn ($15.2bn) from SK107.7bn a year earlier. The company saw net income drop 63 per cent year on year in the second quarter, was the latest telecom equipment vendor to suffer from weak growth in the industry. Just days before, Alcatel-Lucent had warned of a €40m operating loss in the second quarter, andZTE, Huawei’s smaller Chinese peer, said it expected first-half earnings to plummet 60 to80 per cent from Rmb769.3m a year ago.“We are relatively optimistic about our operating performance and profitability for theremainder of 2012,” said Meng Wanzhou, chief financial officer.Ericsson is the clear leader in a number of market segments such as mobile networkinfrastructure and telecom services, but analysts said that Huawei was likely to continue to gain ground.
http://www.ft.com/intl/cms/s/0/c7b672fa-d57e-11e1-b306-00144feabdc0.html#axzz21fkGAVYT
Reuters: Huawei Technologies Co Ltd HWT.UL, the world’s No.2 telecommunications gear maker, posted a 22 percent fall in first-half operating profit, citing the “significant challenge” of the global economy and the telecoms equipment market.
The Chinese company, whose expansion plans have been met with some suspicion in the United States and Australia over concerns about cyber security, said revenues rose just 5 percent although it expressed confidence it would achieve its full-year target of boosting sales 15-20 percent.
The drop in operating profits comes after rival Ericsson (ERICb.ST) reported below-forecast profits and competitors Franco-American Alcatel-Lucent (ALUA.PA) and China’s ZTE Corp (0763.HK) 000063.SZ issued profit warnings, largely reflecting sluggish telecom spending during the global economic downturn. However, Huawei and ZTE may fare better than their western competitors in the second half of 2012 because spending on Chinese mobile networks is expected to pick up, analysts said.
“The second-half outlook will be better for Chinese companies such as Huawei and ZTE because Chinese telecom carriers will pick up the slack in spending in the second half,” said Michael Li, a Hong Kong-based analyst with Everbright Securities. Tenders by mobile carriers to upgrade networks were delayed in the first half and the government is keen for them to meet their spending plans for the year.
Shenzhen-based Huawei, also the world’s sixth-biggest handset maker, is unlisted and provides few figures about its corporate performance. In a seven paragraph statement, it said operating profit of 8.79 billion yuan ($1.4 billion) for January to June was lower than a year earlier but up 20.3 percent compared with the second half of 2011. First-half revenues rose 5.1 percent from a year earlier to 102.7 billion yuan.
“The telecom industry is seeing sluggish growth in 2012 owing to the global economic downturn, which has caused customers to reduce investments while the competition in this industry remains fierce,” company spokesman Scott Sykes said. Li reckoned revenue growth would pick up to at least 10 percent for the full year, although Sykes said Huawei was confident it could meet its 15-20 percent target. Huawei did not provide first-half figures on net profit or its gross profit margin.
“Huawei continues to maintain robust growth momentum although the global economic situation and telecom equipment market remains a significant challenge,” it said in the statement.
CONCERNS
Huawei, founded by CEO Ren Zhengfei in 1987 after he was made redundant by China’s military, has diversified into consumer devices and enterprise networking equipment as growth in its core telecoms gear market has stalled. The firm is close to taking over market leader Ericsson as the No.1 telecom equipment vendor globally, although securing that top slot will be tough if it fails to gain business with U.S. telecom carriers.
The U.S. government has been suspicious of Chinese companies such as Huawei and ZTE selling telecom gear to its carriers on concerns over possible cyber security and reports that they had sold U.S. computer equipment to Iran. Both companies have said they had curtailed their business in Iran.
Huawei was blocked in March from an Australian broadband tender. The attorney general cited the need to ensure the “security” of critical infrastructure. However, both Huawei and ZTE have had considerable success in selling mobile phones globally, including to the U.S. market, where their prices are generally cheaper compared with larger rivals such as Apple Inc (AAPL.O) and Samsung Electronics Co Ltd (005930.KS).
Huawei plans to spend $200 million on advertising this year to help boost sales, Shao Yang, the chief marketing officer of Huawei Device, the division that sells handsets, tablets and dongles, said in June. However, Jefferies brokerage said the company’s 2012 handset sales targets were under threat by the global slowdown. In a client report, it said Huawei’s executives had told the brokerage that Europe and North America were seeing a slowdown in smartphone demand, lower subsidies and a longer replacement cycle.
“In China, there is also slowing demand across the board including tier 2 and 3 cities. China’s total telco handset subsidies are expected to remain stable, however, subsidies/handset may decline as prices of smartphones decline,” Jefferies said.
With demand weakening in some markets, Jefferies said Huawei’s full-year 2012 smartphone shipments might be in the range of 35-40 million, lower than the initial company target of 60 million.
http://www.reuters.com/article/2012/07/24/us-huawei-results-idUSBRE86N0SI20120724
Huawei VIDEO: Chinese vendor Huawei is eyeing dominance of a global LTE network market that it expects to grow to more than 140 commercial operator deployments by the end of this year. In a video interview with Mobile World Live,
Ying Wei Min, President of GSM, UMTS and LTE networks at Huawei, noted that this rapid growth will build on the “more than 80 [LTE] networks launched globally” to date, fuelled by booming demand for mobile broadband services.
Weak Global Econcomy & Slow Business in China Has Negative Impact on Alcatel-Lucent and ZTE
Alcatel-Lucent underlined the bleak outlook for itself and much of the telecoms equipment sector by disclosing second-quarter operating losses of €40m and abandoning yearly profit targets. The company cited a “slower than expected business mix improvement”. Alcatel-Lucent also said that while it expects the second half of the year to be better than the first, it will not now meet its previously-announced adjusted operating margin guidance for 2012. It noted a “difficult macro-economic environment”.
According to Odon de Laporte, an analyst at Credit Agricole Cheuvreux cited by Bloomberg, the company has also been impacted by slow business in China. During the first quarter, the company noted “extremely weak” sales of GSM equipment in China, due to the timings of the sales cycle.
Financial Times offerered an even bleaker assessment for Alcatel-Lucent prospects this year:
http://www.ft.com/intl/cms/s/3/40dd8db6-d008-11e1-bcaa-00144feabdc0.html#axzz212LYe1kO
Update on Alcatel-Lucent– 26 July 2012:
Alcatel-Lucent reported a net loss for its second quarter and announced that it is planning to reduce its headcount by 5,000 in an effort to further cut costs. The results make it the latest infrastructure vendor to suffer at the hands of the economic downturn, along with Ericsson and Huawei.
The company reported a net loss of EUR254 million for the second quarter on the back of revenue of EUR3.55 billion. The loss was particularly severe when the previous quarter’s EUR398 million net profit is taken into account.
Revenue was down 7.1 percent from EUR3.82 billion reported in Q2 2011 but up 10.6 percent from the previous quarter’s EUR3.21 billion.
Revenue for the wireless network business was EUR877 million, up 11.3 percent from the previous quarter’s EUR788 million but down 18.7 percent compared to EUR1.08 billion for the same quarter in 2011. The decline in wireless revenue over the past year was attributed to “moderate or delayed spending of service providers” on 2G and 3G technologies. However, the company’s LTE business more than tripled its revenue during the course of the year.
North America and Europe provided the bulk of the company’s total revenue during the period but have declined 8.3 percent and 15.6 percent respectively compared to a year ago. The only region to have increased revenue in the past 12 months is the rest of the world with Central and Latin America recording a seventh consecutive quarter of double digit growth. All geographies were up compared to the previous quarter.
Alcatel-Lucent CEO Ben Verwaayen said the second quarter performance confirms the company’s strong position in “many attractive market segments” such as IP, next-generation opticss and broadband access, but also the effects of the global economic situation. Verwaayen’s ommision of ‘mobile’ from the company’s list of strong markets reflects how Alcatel-Lucent is facing serious competition in the wireless sector.
Verwaayen added: “It is clear from the deteriorating macro environment and the competitive pricing environment in certain regions challenging profitability that we must embark on a more aggressive transformation.” To that end, the infrastructure vendor has launched “The Performance Program” to achieve a further EUR750 million cost reduction to bring total savings to EUR1.25 billion by the end of 2013. The plan includes the reduction of 5,000 roles in the organisation and the exit or restructuring of unprofitable managed services contracts and markets. “These times demand firm actions,” Verwaayen said.
The company has previously reduced costs through rationalising its product portfolio, co-sourcing, reducing cost structure and managing working capital more effectively. The company is targeting a strong positive net cash position by the end of 2012. http://www.mobilebusinessbriefing.com/articles/alcalu-swings-to-q2-loss-announces-5-000-job-cuts/24737?elq=b0087be5d8994e1ea01991708af665c9
LightReading: “These times demand firm actions,” stated CEO Ben Verwaayen in today’s earnings press release.
In addition to cutting jobs, AlcaLu intends to exit or renegotiate unprofitable managed services deals and quit unprofitable geographic markets. No mention was made of winding down or selling off product lines.
As part of the program AlcaLu is also looking to capitalize on its intellectual property and is setting up its patent portfolio as an independent profit center.
The cost-cutting plan wasn’t enough to appease investors, as AlcaLu’s share price on the Paris exchange fell by 5.4 percent in early trading Thursday morning to €0.83, giving the company a market value of just €1.9 billion ($2.3 billion).
http://www.lightreading.com/document.asp?doc_id=223302&f_src=lrweeklynewsletter
And now let’s look at ZTE, whose Shenzhen-listed shares closed down sharply after its recent earnings report. The Shenzhen-based firm said late Friday that its net profit would total 154 million to 308 million yuan ($24.4 million to $48.9 milliion) in the first half of 2012, dropping 60 to 80 percent year-on-year from 769 million yuan in 2011.
ZTE attributed the profit decline to considerable investment returns in the first half of 2011, foreign exchange losses and order postponement by domestic telecom operators.
“Our performance in major businesses is better in 2012 than the previous year,” Dai Shu, spokesperson of ZTE China, told the Global Times Tuesday. “If we deduct the 900 million yuan earnings by selling Nationz Technologies Inc’s shares in 2011 and 150 to 200 million yuan foreign exchange losses resulting from the eurozone crisis.”
ZTE would grow faster than the average growth of the industry in 2012, Dai projected, noting that the company would release its semiannual report in August. However, the firm has to face worsening market environment and industrial bottlenecks, analysts said. Dragged by the global economic downturn, telecom operators around the world postponed their projects and investments, and the trend is unlikely to reverse in the short term, said analyst Chen Yunhong from Sinolink Securities.
Technology research firm Gartner predicted that the global telecom sector would see 2 percent expansion in 2012.
Media reports said many ZTE staff have been recalled from overseas postings since early this year and further job cuts would be announced within the year.
http://www.globaltimes.cn/content/721664.shtml
Gartner: Robust growth for telecom equipment spending, tepid growth for telco services, PC sales flat
Telecom equipment spending could rise 10.8 percent to $377 billion this year, according Gartner Inc. The prestigious market researct firm forecasts that growth will continue throughout 2013 when spending will increase by 8.3 percent to $408 billion.
“While the challenges facing global economic growth persist—the eurozone crisis, weaker U.S. recovery, a slowdown in China—the outlook has at least stabilized. There has been little change in either business confidence or consumer sentiment in the past quarter, so the short-term outlook is for continued caution in IT spending,” said Richard Gordon, research vice president at Gartner.
However, telecom services spending will not fare nearly as well, according to Gartner. 2012 telco service growth will only be 1.4% this year to $1,686B. And 2013 growth will still be paltry at 2.3% to $1,725B. The global telecom services market continues to be the largest IT spending market. Telecom services growth is expected to come not only from net connections, especially in emerging markets, but also in mature markets from the uptake of multiple connected devices, such as media tablets, gaming and other consumer electronics devices.
Telcos could also reap some benefits as more businesses and govenment agencies start to adopt cloud computing services. Gartner predicts that enterprise spending on public cloud services will grow from $91 billion worldwide in 2011 to $109 billion in 2012 to reach $207 billion in 2016. That’s somewhat surprising since other market research firms predict more robust growth for private cloud services, due to concerns about performance, security and failure recovery.
For more info please see the press release:
Atleast telecom spending on equipment and services is doing better than PC spending. Worldwide PC sales remained virtually flat in the second quarter, according to a new Gartner report.
Gartner principal analyst Mikako Kitagawa said in a statement that the PC market in Q2 “suffered through its seventh consecutive quarter of flat to single-digit growth.” Kitagawa attributed the key reasons for this sales performance to economic uncertainty in some regions and a dropping interest on the part of consumers for PCs.
SMBs Look to Hosting Companies for Cloud Computing Services
AMI Partners Report:
According to AMI Partners (http://www.ami-partners.com/), hosting companies — pure-plays, telcos and MSOs — will provide nearly half of the cloud services purchased by U.S. small and midsize business. The firm predicts SMBs will have invested a total of $34 billion in the cloud by the end of the year. According to the report, hosting providers such as telecom firms, MSOs and pure-plays are uniquely suited to handle the high level of customer service demanded by SMBs because of their long history of providing Web access solutions to the sector.
“A key reason that hosters are becoming a leading cloud channel for SMBs is because they have proven they can effectively handle critical infrastructure, while providing the necessary level of support,” said Monik Sheth, research analyst at AMI-Partners. “Poor service can be an immediate deal breaker for any company, and SMBs are no different.”
AMI Partners is including telecommunications providers (telcos and cable companies) in the “hosters” category is because many of the solutions offerings are beginning to overlap, especially around IaaS and related cloud offerings, Sheth told Channel Partners. “Telecom firms are making strategic plays in the hosting space, as you can see for example by M&A activity among major telecoms in the U.S. (e.g..Verizon acquiring Terremark and Time Warner Cable acquiring NaviSite),” he said.
SMB cloud services spend includes investments in IaaS, SaaS, web hosting, UC and remotely managed IT services. Two areas where AMI Partners found SMBs see clear benefits, and are aggressively moving to the cloud, are hosted infrastructure, such as servers and storage, and remote management of IT systems and related applications. That’s because SMBs have very limited, if any, internal staff dedicated to managing technology, so deploying these solutions in the cloud, with the support of a trusted provider, is quickly becoming the norm, the research firm explained.
References:
http://www.ami-partners.com/index.php?target=news&mode=details&news_id=287#287
TELECOM-PRO Comment:
We see Savvis-Century Link and Terremark-Verizon as the telco leaders in providing cloud services to SMBs. Of course, that’s why Century Link and Verizon acquired those two formerly independent companies! It remains to be seen what competive telcos will do in the cloud space. Those include: TW Telecom, Level 3 Communications, AboveNet, XO Communications, Windstream, and Globe Telecom (amongst others).
Meanwhile, MSOs (multiple system operators) are becoming a bigger threat to telcos in the business end services and wholesale market, as more SMBs and wireless operators (e.g VZW) look for alternative providers to meet their needs. We see Comcast Business as particularly strong in Carrier Ethernet and VoIP to SMB, but they haven’t announced anything definitive for cloud computing.
Perhaps, it takes web hosting and IT service management expertise that’s beyond the reach of most telco’s and MSOs.
What’s your opinion?
Telecom Revolution in India and the Government’s Role in Making it Happen (or not)
Note: Please see comments at the end of this article for updates and opinions.
New Broadband Telecom Projects in India
The legendary Sam Pitroda presented the closing keynote speech at TiECon 2012- The Indus Entreprenneurs annual conference. Sam is a pioneer in design and development of digital switching technologies (in the 1970s) and the man behind India’s telecom revolution (in the 1980s and ’90s). Mr. Pitroda is currently Adviser to the Prime Minister of India on Public Information Infrastructure and Innovations. A technologist, inventor and entreprenneur, Sam initiated India’s telecom revolution in the 1980s and sparked India’s outsourcing boom in the late 90s. In 2007, IEEE ComSoc awarded Mr. Pitroda the award for Public Service in the Field of Telecommunications. (http://www.comsoc.org/about/memberprograms/comsoc-awards/telecom/bios)
A comprehensive article on Mr. Pitroda’s speech appears in the July 2012 issue of IEEE Global Communications Newsletter, which is published in IEEE Communications magazine.
http://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=6231274
Sam believes that Public Information Infrastructure is critical for driving innovation and entrepreneurship, as well as for improved delivery of public services and accountability.
The first step in modernizing India’s IT infrastructure is the National Knowledge Network (NKN). This high speed fiber optic network will interconnect all educational and research institutions in India (including 22,000 colleges) as well as global research networks in the U.S., EU, Singapore and Japan. Its goal is to enable real time collaboration and research. The target users for the NKN are institutions engaged in the generation and dissemination of knowledge in various areas, such as research laboratories, universities and other institutions of higher learning, including professional institutions.
NKN has already connected 774 institutions (as of 26 May 2012) and aims to connect over 1500 Institutions/ Organizations /Laboratories throughout the country. The network design is based on a proactive approach that takes into account future requirements and new possibilities- in terms of both usage and perceived benefits. The NKN is characterized by a 40G bit/sec fiber optic backbone, multiple 2.5/10G fiber add/drops, and a total of 1500 nodes. It’s projected cost is $3B.
Another government funded fiber optic network is being built to connect 250K Panchayats (local government bodies) in India. Broadband connectivity to these rural Panchayats will improve delivery of public services and empower village residents (which make up 70% of India’s population). It will transform eGovernance, education, health, hospitals, and agriculture. The India government launched this rural broadband program in late October 2011 under the Universal Service Obligation Fund (USOF) to increase broadband penetration in rural and remote areas.
At these Panchayats there will be a cell tower and other related infrastructure for all public and private operators to share facilities for proving last mile wireless services to rural customers. Broadband wireless access will consists of a mix of 3G/4G cellular, mesh WiFi, and WiMAX. Those wireless access networks will be interconnected to India’s fiber optic backbone for extended reach and a multiplicity of services.
This fiber optic network to Panchayats has a projected cost of $6B and will be totally operational in two years time.
In May 2012, Indian Television’s Digital Edge reported: “A total of 1,47,463 ( 59.49 % ) out of a total of 2,47,864 village Panchayats had been covered with broadband connectivity as of March 2012.
A rural Wire-line Broadband Scheme has been launched under Universal Service Obligation Fund (USOF) to increase broadband penetration in rural and remote areas. Under this scheme, BSNL will provide 8,88,832 wire-line broadband connections to individual users and Government Institutions over a period of five years. As on March 2012, a total of 3,58,978 broadband connections have been provided.”
http://www.indiantelevision.com/headlines/y2k12/may/may24.php
Perspective and Conclusion
While lots of people say government should get out of the way and let the private sector take over industrialization and information infrastructure in India, Sam believes that most companies won’t take on those projects due to uncertain ROI and capital expenses. In sharp contrast, the Indian government now has the political will to move forward with its innovation agenda.
Let’s hope so.
Here are three incisive comments from very respected sources, plus this author’s opinion and a rebuttal:
1. Madhu Pitke, an IEEE ComSoc member for several years who is helping expand its activities in India
“Communication in India has been, until recently, under the total control of government. In the 90s, with the liberalization of the economy, mobile communication has caused a revolution in India. There are probably be more than 700 million mobile phones now. The main reason has been affordability. However, broadband communication has yet to make significant inroads into the village.This is changing rapidly with the emergence of new low cost technologies and the several initiatives undertaken by the government. Fiber networks have reached areas that are within a 10 to 20 km from a large section of the 600,000+ villages. A new Gigabit National Knowledge Network – NKN (Sam Pitroda’s initiative) is being set up to provide broadband connectivity to schools and other educational institutes throughout the country. NKN is also expected to play a key role in taking the broadband to the villages. This is further aided by the goverment’s plan of making available low cost tablets (Aakash) for around $ 50 to each school student.
The problem to be tackled is providing an affordable, user friendly access solution which in my opinion is already on the horizon. About $50 of fixed cost per connection and a monthly rental of about $5 for unlimited use of the broadband (2+Mbps). I hope to write a separate article on this some day.
Meanwhile, it’s true that the Panchayats (local government bodies) are responsible for providing (wireless broadband) connectivity to the villages…. ultimately.”
Alan’s comment on Panchayats providing last mile wireless broadband to the villages: I don’t believe they have the IT/wireless telecom skills or experience to select and deliver the appropriate wireless broadband access network along with the compatible/ matching wireless devices from different vendors. Even if they did complete the job, the result would likely be a proliferation of technologies and frequencies used throughout India, which would make it prohibitively expensive to standardize on mobile devices for the villagers/population. Those wireless devices (fixed or mobile) would have to be ultra low cost as villagers don’t have income to pay $500 or more for a smart phone/device.
Sam Pitroda’s rebuttal: Here is an attempt to clarify the confusion raised about Panchayat provided last mile wireless broadband access to villages in India.
About the role of IEEE ComSoc (by Madhu): “It has helped the communications engneering and academic community (including the students) well informed of the progress in research and development and prepared them for dealing with future challenges through the large number of conferences, workshops and lecture meetings throughout the country.”
2. Suhas Patil, a colleague and friend of Alan’s for almost 30 years, Prof. Patil set up Alan’s 6 week business development trip to India in Nov-Dec,1990. A former Professor at MIT and the University of Utah, Suhas is the founder of Patil Systems (later renamed Cirrus Logic) and the CEO/Chairman of Cradle Techologies (with offices in Puna, India and Mt View, CA).
“Lots of success for India’s telecom revolution, but credit for it should not go to the Indian government. They came to opening the communication segment kicking and screaming. The advocacy role that TiE (and maybe US government) played in persuading the Indian government to open this segment. Again, there are Department of Information and Electronics changes in the (government issued) rules that play havoc with investment. The Ministry of Finance is now proposing a retroactive tax, which would be very damaging to those who have taken the risk of investing in India (infrastructure developement).”
Editor’s Note: A recent article in the NY Times corroborates Mr. Patil’s view expressed above, especially regarding the proposed retroactive tax.
India’s ‘Telecom Revolution’ Turns Ugly, May 4, 2012
Facing new regulation and retroactive taxation, telecommunication companies in India are revolting – foreign companies are pulling out of the country, local executives who were once cozy with government are publicly condemning official policies, and several operators are suing or threatening to sue the Indian government.
“We have probably the most destructive regulatory environment virtually since the inception” of this sector, said Sanjay Kapoor, chief operating officer of Airtel’s South Asia operations, during a meeting Thursday of telecommunications operators in New Delhi organized by the Cellular Operators Association of India. “The recommendations are flawed and retrograde, regressive and uncertain in a fashion that it would irreparably harm consumer interest.”
India’s Finance Ministry said during the budget announcement this year that it plans to retroactively tax foreign acquisitions into India, a plan that seems aimed at Vodafone of Britain, which could owe several billion dollars. Vodafone is fighting the Indian government in international courts, and other foreign companies, including telecom operators, could follow suit, deal-making experts say. Vodafone’s chief executive attended the Wednesday meeting but did not speak publicly.
Already, telecom operators are shutting shop in India.
http://india.blogs.nytimes.com/2012/05/04/indias-telecom-revolution-turns-ugly/
Basant Khaitan, a life long colleague and friend of Alan’s who spends considerable time in India with two start-up companies he’s involved with there.
“India will become a large market but one has to have patience (relative to fast growing economies like China, Brazil, Russia, etc.) I have often said China is a country which has a high and different trajectory than others. The Indian Government should actively do whatever it can to provide for BB infrastructure. My considered judgment is India’s broadband subscriptions will grow about 15-20% a year. That’s not a bad growth number by any stretch, but the current base is small for a country like India.
Even if Government somehow manages to implement the so called NKN I, personally, remain skeptical about dramatic growth in broadband use. Less than 4% of Indian households have broadband service. ARPU for most (500M+ out of about 650M) cellphone users is less than $4 per month); these users don’t have a smartphone and often are not capable of reading or sending a text message. I am not sure how many will just shell out even $5 extra each month for Internet which they barely know about. I am also equally skeptical about $50 tablet. It is also one of those government hypes; over-promised and grossly under-delivered! I sent my application online to get one about 8 months ago. As of today, I have not even received an acknowledgment of my application. My Indian friends are living the same experience.
The problems are education and cultural including leisure time. Much of growth in Internet usage is due to the educated class (high school or beyond). Corporate use is also growing but it is asymmetrical. Government sector including many government-owned industrial enterprises have also been quite slow to adopt Internet. For every Sam Pitroda you will come across at least 20 senior officers who barely use the Internet.”
References:
http://www.sampitroda.com/index.php?option=com_content&view=article&id=21&Itemid=127&lang=en
http://iii.gov.in/
http://iii.gov.in/index.php?option=com_content&view=article&id=283:broadband-to-panchayats-whitepaper&catid=49:reports&Itemid=37
http://railwaymodernisation.gov.in/
http://iii.gov.in/index.php?option=com_content&view=article&id=286&Itemid=205
http://www.indianchild.com/panchayats_system_india.htm
http://www.indiatechonline.com/it-happened-in-india.php?id=616
http://www.indiantelevision.com/headlines/y2k12/may/may24.php
http://www.iloveindia.com/indian-heroes/sam-pitroda.html
http://telecomlead.com/inner-page-details.php?id=8828&block=News
http://india.blogs.nytimes.com/2012/05/04/indias-telecom-revolution-turns-ugly/
Cisco to increase Market Share in Developing Countries hit by Global Economic Slowdown
Cisco Systems will take advantage in the current slowdown in telecom-equipment spending by investing in emerging markets to expand its market share, CEO John Chambers told CNBC on June 22nd.
The information technology company’s business is growing in some emerging markets and Cisco is taking a longer-term approach than the next few quarters to see the results of its investment, Chambers said in an interview at the St Petersburg International Economic Forum.
Cisco invested in Russia over three years ago and its business in the country grew by 50 percent last year and it has increased “in the high teens” so far this year, according to Chambers.
“You can actually pick up more market share gains when things are slowing or right before they’re picking up than you do in normal times, When we see things starting to slow in an area that’s actually when we may invest more aggressively,” Chambers said. “We see the emerging economies not only as being able to grow … faster than our traditional business but we see them as an opportunity for us to begin to talk about how do you change the whole economy,” he added.
While developed countries’ governments did cut spending on IT around 15 months ago, continuing to reduce investment in the area is not a good strategy for these governments because the quality of their services such as healthcare, education, security of defense would drop, Chambers said.
Read the complete article & watch the interview at: http://www.cnbc.com/id/47916867
Comment:
We were disappointed that Chambers did not name the technologies for the emerging markets that Cisco is investing in. As Cisco has no presence in wireless infrastructure (other than mesh WiFi) or mobile computing, we wonder where the company will pick up market share.
Healthy Growth in N.A. Home Networking Devices led by MoCA (Multimedia over Coax)
Introduction:
Infonetics Research recently released excerpts vendor from its latest Home Networking Devices market share and forecast report.
HOME NETWORKING DEVICE MARKET HIGHLIGHTS:
•Global sales of home networking devices grew 20% in 2011 from 2010, to $7.98 billion
•Infonetics expects a cumulative $43 billion to be spent on home networking devices over the 5 years from 2012 to 2016, as the growth of tablets and other devices in home networks necessitate additional connectivity options
•MoCA (multimedia over coax) embedded set-top boxes (STBs), FTTB optical network terminals (ONTs), coax-Ethernet adapters, and WiFi broadband routers are driving growth in home networking device market
◦Cable operators and telcos in North America, especially Verizon, are increasingly using MoCA devices to deliver services like whole-home DVR
•D-Link extended its revenue share lead in the highly competitive broadband router market, followed by NETGEAR and Cisco
ANALYST NOTE
“Tablets, connected TVs, digital media players, and a growing list of other devices are driving sales of home networking devices, and this is nowhere more apparent than in North America, which captured 37% of networking device revenue in 2011,” notes Jeff Heynen, directing analyst for broadband access and video at Infonetics Research. “We expect the demand for broadband peripherals, especially those with integrated MoCA chips, to continue to increase globally as operators in all regions roll out new home automation, energy management, entertainment, and communications services that require high-end networking devices.”
To buy the report, contact Infonetics Sales: http://www.infonetics.com/contact.asp.
Comment & Observations:
It’s interesting to note the dominance of MoCA over HomePNA in Home Networking, despite it’s higher cost. HomePNA operates in the 4-36 MHz frequency range, whereas MoCA runs over a 50 MHz wide channel in the 975 to 1525 MHz range, which requires a (presumably) more expensive RF components. MoCA home networks use existing coaxial cable in the home to send information between devices. In N.A. most homes are coax wired, and Verizon as well as MSOs are taking advantage of that to deploy MoCA.
We also don’t see much of IEEE 802.11n or ITU-T G.hs deployed in home networks, despite the tremendous hype leading up to their respective standardization.
Related Infonetics Report: Pay-TV Services and Subscribers
Infonetics Research released excerpts from its latest Pay-TV Services and Subscribers report, which forecasts and analyzes the telco Internet protocol television (IPTV), cable video, and satellite video services markets.
PAY-TV MARKET HIGHLIGHTS
. The global pay-TV market, including cable, satellite, and telco IPTV video services, totaled $261 billion in 2011 and is forecast by Infonetics to grow to $371 billion by 2016
. North America is again the highest-value video market due to high ARPU, but Latin America and Asia are gaining ground as a result of expanding subscriber bases
o Case in point: Mexico’s América Móvil’s pay-TV subscribers and revenue grew in the triple-digit percents in 2011 from 2010; KT’s grew in the double-digits
. DirecTV and Comcast remain the global market leaders for pay-TV revenue and subscribers
o DirecTV enjoys the highest ARPU due to the high take rate of its value-added services and premium content such as the NFL Sunday Ticket
o Comcast is the global pay-TV subscriber leader, with over 22 million subscribers in 2011
. In 2011, the top 20 pay-TV revenue leaders accounted for 50% of the revenue, while the top 20 subscriber leaders represented just 30% of subscribers
ANALYST NOTE
“Cable video still makes up over half of the global pay-TV market, but revenue growth is decelerating due to a slowdown in new subscribers, especially in the lucrative North American market, as competition from satellite and IPTV operators intensifies and as OTT offerings from Netflix, Hulu, and others siphon away a small, but growing number of households,” notes Jeff Heynen, directing analyst for broadband access and video at Infonetics Research.