IEEE ComSoc SCV Telecom and Networking Newsletter- 20 December 2007

This issue is organized into 4 parts:

 

1.      Carrier News and Analysis

2.      WiMAX and vendor news

3.      Articles from the FT (one of my favorite reads)

4.      Links for Cisco's C-Scape conference

 

1.  Carrier News and Analysis

 

Embarq chief Hesse named new Sprint CEO

 

Sprint Nextel has tapped Daniel Hesse, the chairman and CEO of Embarq Corp., and a 23-year veteran of AT&T, as its new CEO today.  Sprint, the nation's third largest wireless carrier by subscribers, has been looking for someone to take the helm since Gary Forsee stepped down in October amid pressure from the company's board and investors. Mr. Hesse, who has served as CEO of Embarq Corp., a local phone company that spun out of Sprint last year, is a telecom veteran who is well known to Sprint's board and has strong wireless experience.  Hesse, 54, also spent three years as chairman of AT&T Wireless. "Dan's mandate is to hone our strategy, improve our ability to serve our customers and execute in the marketplace," Chairman James Hance said.

The Wall Street Journal (subscription required) (12/18), Google/Associated Press (12/18), InformationWeek (12/18)

 

Comment:  Sprint has been struggling as they have lost subscribers and have had difficulties in smoothly combining Nextel’s operations since they acquired that company. The starkest example of the unfinished integration at Sprint is that companies have maintained their legacy headquarters – Nextel's Reston, Va. offices became the official corporate headquarters after the merger but Sprint maintained a huge operational presence in Overland Park, Kansas.  To compound their problems, Sprint has committed to spending several billion dollars for their WiMAX rollout with little prospects for a quick ROI.  While Hesse appears to be very competent, he will not be able to work magic in his new post.   Many challenges lie ahead for Sprint, first of which is whether to spin out their WiMAX operations or cancel it entirely.

 

Qwest decides against video effort in Portland, OR

 

Qwest Communications International, which recently was granted permission to offer video services in Portland, Oregon., now says they will not get into the video business. Qwest CEO Edward Mueller said the company would continue to offer subscribers discounts on DirecTV packages.

The Oregonian (Portland) (12/18)

 

Comment:  Just as Qwest is alone as the only legacy carrier without a cell phone division, it looks like they will now pass on residential video.  They probably believe the build out costs do not justify the potential ROI, especially with cable and satellite service improving.

 

Vonage under more pressure as Nortel joins patent attack

 

Nortel filed suit against Vonage Holdings last week, alleging that the VoIP company had infringed on 12 of its patents, all related directly to technology for Internet telephony. Vonage, which had filed a patent suit against Nortel earlier this year, has settled similar litigation with AT&T, Verizon Communications and Sprint Nextel for hundreds of millions of dollars.

Techworld/Network World (12/18)

 

Comment:  Again, we ask if any carrier can make money offering VoIP service?  We wonder how Packet 8 (AKA 8 x 8) is doing.

 

AT&T’s U-Verse adds eight HD channels

 

AT&T's U-Verse TV has expanded its high-definition lineup to more than 40 channels in most areas, with the addition of eight new networks on the IPTV service. Subscribers pay $10 a month for HD programming.  Broadcasting & Cable (12/17)

 

Comment:  This is quite impressive, but does not tell the whole story.  Unlike Verizon’s FIOS, which uses FTP, U-Verse delivers its service bundle, using DSL (AT&T has not been clear on whether it will be ADSL2+, VDSL, or VDSL2).  As a result, AT&T is currently offering only a single HD stream to the Motorola STB.  AT&T spokeswoman Jenny Parker earlier said a second HD stream would be made available in 2007, but we haven’t heard anything more about that (see news item below).  The HD stream is in addition to two standard-definition streams to either watch or record on a DVR.

 

AT&T Boosts Dividend, Expanding TV Plans (U-Verse)

 

The announcement by chief executive Randall Stephenson reinforces AT&T's commitment to U-verse. Recent news reports said the San Antonio-based company was in talks to acquire satellite TV broadcaster Dish Network Corp., formerly known as EchoStar Communications Corp., which would have given AT&T ownership of a different route to reach customers. However, those talks have likely been shelved because of federal anti-collusion rules surrounding a spectrum auction that will start in January. AT&T already resells Echo Star’s Dish service.

 

The U-verse rollout has been delayed several times. A month ago, AT&T trimmed its coverage target for the end of next year to 17 million homes from 18 million. The delay was due to a shift in resources to the former BellSouth.  U-verse had 126,000 subscribers at the end of September, the latest figures released, but AT&T said it is now connecting more than 10,000 customers per week.  U-verse will reach 1 million video customers by the end of next year, according to AT&T.

 

AT&T also confirmed that at least some U-verse subscribers will next year be able to watch two different high-definition channels at the same time, something that hasn't yet been possible because of limited bandwidth over DSL for HDTV signals.   The company also said broadband speeds of up to 10 megabits per second will be available to some subscribers next year thanks to the U-verse system upgrade. The current maximum is 6 Mbps.

 

AT&T expects to spend between $4.5 billion and $5 billion on U-verse through 2008. The deployment is expected to reduce 2008 earnings by 12 to 14 cents a share.

 

http://news.yahoo.com/s/ap/20071211/ap_on_hi_te/at_t_analysts,

http://www.sfgate.com/cgi-bin/article.cgi?file=/n/a/2007/12/11/financial/f061241S88.DTL&type=printable,

The Tennessean (Nashville)/Associated Press (12/11) , Broadcasting & Cable (12/11)

 

 

AT&T chooses Cisco 40-Gbps routers for backbone network upgrade

 

AT&T selected Cisco Systems' core routers for a major upgrade to its backbone network, quadrupling its capacity in preparation for an expected jump in network traffic.  AT&T will purchase Cisco's CRS-1 routers, which will help it connect 25 major Internet hubs across the country. AT&T has already begun using some of the same Cisco routers, which has giving the telecom giant the ability to offer coast-to-coast 40 gigabit-per-second service across its backbone, AT&T said.  Terms of the purchase were not disclosed.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/11/BUJ1TRLCE.DTL&hw=AT&sn=001&sc=1000,

 

http://www.bizjournals.com/sanantonio/stories/2007/12/10/daily2.html

 

Comment:  This was a big win for Cisco over Juniper Networks, the only other viable core router vendor.  It also signals the move to a 40 Gig backbone network, after many years of saying this was the year for 40 Gig and OC 768.

 

AT&T eyes early 2008 for mobile-TV launch

 

AT&T expects to make MediaFLO USA's mobile-TV service available in early 2008.  (MediaFLO is Qualcomm’s mobile video network).  ESPN, MTV Networks, NBC, CBS and Fox are among those supplying content for eight planned channels.  Verizon Wireless launched a MediaFLO-based service in March, but AT&T said it wanted to refine the user experience before rolling out the service.  Multichannel News (12/14)

 

AT&T makes free 411 service available nationwide

 

AT&T says that it has expanded its free directory assistance to all of the continental U.S. The company had been gradually rolling out the advertiser-supported service, having done so already in nine Southeastern states.  InformationWeek (12/17)

 

Comment:  You can also try 1 800 GOOG 411 for free directory service to businesses.

 

With MCI assets, Verizon Business rings up Asia

 

Almost two years after taking over MCI, Verizon Business is making inroads in China and India. Verizon Business is part of a group building an undersea optical link between China and the U.S. in preparation for the Beijing Olympics, and it is close to reaching a deal with India to provide long-distance voice and data services, mainly to large companies.

CNNMoney.com/Investor's Business Daily (12/17)

 

Clearwire brings broadband to Rochester, N.Y.

 

Clearwire has made Rochester, N.Y., its 50th market in bringing high-speed wireless broadband service to the upstate New York community where it will compete with Time Warner Cable and Verizon Communications. Despite earlier statements that future rollouts would include data and voice, Clearwire is apparently launching only an Internet service in its newest market. 

OneTRAK (12/17)

 

Comment:  Some good news for Clearwire, after pundits questioned their survival when the carrier and Sprint cancelled their WiMAX roaming and joint coverage plan.  Clearwire is evidently alive and kicking.  But will they complete their WiMAX rollout, with no roaming agreements with any other carrier?

 

Alltel service turns voice mail into text messages

 

Alltel Corp. on Friday became the first major U.S. wireless provider to allow users to read their voice mail as text messages. Using voice-recognition software from U.K.-based SpinVox, the new Alltel feature will cost from $4.99 a month and, the company says, eliminate the need for people to grab for a pen when they receive voice messages on their mobile phones.

The Washington Post/Associated Press (12/17)

 

Deutsche Telekom continues administrative cuts for 2008

 

Deutsche Telekom will emphasis cuts in administrative costs as it stays the course on the overhaul of its operations next year, according to CEO Rene Obermann. "We have many small sites spread all over the country. That's not cost-effective," he told a German newspaper.

Forbes/AFX News Limited/Thomson Financial (12/16)

 

Comment:  This continues several years of downsizing for Europe’s largest telco.  When will it end and will it effect T-Mobile in the U.S.?

 

FairPoint-Verizon wireline buyout progresses 

 

 

2.  WiMAX and Vendor News

 

Motorola introduces wide-scale WiMAX network while talk of its breakup continues

 

Motorola has rolled out its first extensive WiMAX network with Wateen Telecom's launch of fixed-access service to 22 cities in Pakistan. Motorola has plans for three such high-profile commercial services. Telephony Online (12/17)

 

This comes on top of the WSJ report that Motorola is considering breaking up its business units into separate companies.  Motorola is comprised of three business units: the handset unit, a division that works on government contracts and a home-networking business unit.  Large investor Carl Icahn has continued to point out that the handset unit isn't contributing much to the company's overall earnings and that spinning off the division could be worth $20 billion to shareholders.  Despite analyst speculation involving such a breakup, Motorola says it is committed to its "current strategy of providing integrated communications solutions across its businesses as well as improving the financial performance of its mobile-device division."

 

http://www.wirelessweek.com/News-Icahn-Motorola-Breakup.aspx,

http://www.fiercewireless.com/story/motorola-may-be-moving-closer-breakup/2007-12-13,

http://online.wsj.com/article/SB119757071288027105.html (subscription required)

 

Market Research Firm says Mobile WiMAX could reach 80 million subscribers by 2013

 

Market analyst Juniper Research predicts that mobile WiMAX service could exceed 80 million subscribers by 2013, if the technology captures the "YouTube generation."  In its latest forecast, Juniper Research predicts mobile WiMax will begin to take off between 2012 and 2013--with worldwide subscriber numbers exceeding 80 million by 2013. No small achievement for a newbie tech--even if it still might be considered small-fry when compared with souped-up 3G technology HSPA, which is slated to dominate the mobile broadband market. HSPA currently has around 11.5 million subscribers globally, according to international 3G advocate the UMTS Forum.

 

"What they're going to have to do is think about the things that make the sort of sticky services that demographic likes the most," Juniper's Howard Wilcox said. CNET (12/12)

 

Comment:  If mobile WiMAX won’t “take off till between 2012 and 2013,” then vendors and carriers better have very deep pockets.  We disagree and think that “Mobile WiMAX” will be first used for fixed wireless access in the developing countries.  Once critical mass is established there, mobile operation will also be provided using the same network.  For more of my analysis, please see:  “Will the Real WiMAX Please Stand Up!”  http://www.viodi.com/newsletter/061000/article2.pdf

 

 

Rumors swirl in WiMAX world

 

One rumor-happy research firm is claiming that US WiMAX pioneer Clearwire (see news item in Carrier section of this newsletter) may soon be purchased by Intel, while another is speculating that the company will soon resume its defunct WiMAX relationship with Sprint Nextel.

http://www.theregister.co.uk/2007/12/17/clearwire_sprint_wimax_rumors/

 

Comment:  Ordinarily, we don’t like to comment on rumors.  However, we note that last year Intel invested  $600M in Clearwire, which represents a new strategy for the company.  They invested in a company at the top of the food chain (Rather then invest in an equipment company who buys chips, Intel invested in a carrier who buys equipment from companies that may or may not use Intel WiMAX chips).

 

http://www.networkworld.com/news/2006/070606-clearwire-investment-represents-new-strategy.html

 

 

APERTO PacketMAX Selected for first first WIMAX network in Egypt

 

Aperto® Networks, supplier of advanced WiMAX base stations and subscriber units, today announced that it has been selected by Egypt’s Ministry of Interior to provide equipment for that nation’s first wireless WiMAX network. The equipment will be used to connect Egyptian police stations and offices nationwide. Barkotel, a distributor based in Egypt, will provide engineering services for the deployment.  The deployment of PacketMAX solution will take place in two phases. Phase I is currently underway and will connect all major cities and towns in Northern Egypt. Phase II, planned for next year, will connect smaller towns and remaining rural regions. Both phases will involve PacketMAX base stations and subscriber units to provide integrated voice, data, and video services.

 

 

 

3.   Articles  from the FT (subscription may be required for some articles)

 

 

Telecoms taps into Valley expertise

 

The convergence of telecom and computer applications has create a new era of growth in Silicon Valley as so-called "Smartphone Valley" companies are looking to executives with expertise in networking and computers. In hiring its first non-Finnish chief technology officer last week and placing him in Silicon Valley, Nokia accented how the leaders of the 1990s tech boom are drawing telecom companies to their doors.

 

Another telecoms initiative, Ribbit, launches today (December 17^th) with a claim of being "Silicon Valley's first phone company". It justifies the tag by referring to the Valley processes and business models it is bringing to telecoms.  Financial Times December 17 2007                          

 

 

U.K. best value for "triple play" bundle

 

British consumers paid less for "triple play" bundles of phone, TV and broadband than those in France, Germany, Italy and the U.S. -- as least as of 2006 -- U.K.'s telecom regulator reported today. Ofcom said its survey also showed that an increasing number of households were subscribing to those packages.  Financial Times (subscription required) December 12 2007                          

 

Deutsche Telekom’s T-Mobile and Hutchison Whampoa’s 3 UK to combine third-generation mobile networks in the UK

 

Many mobile phone operators are embracing agreements that combine networks, share infrastructure and reduce the number of towers dotted across the countryside.  In Britain, T-Mobile and 3 UK have more incentive than rivals to make network-sharing work. They lack a fixed-line broadband offering and 3 UK made a pre-tax loss last year. While Vodafone and Orange struggle to clear the hurdles to their joint venture, T-Mobile and 3 are promising real benefits from integration starting next year and combined savings of £2bn over 10 years. Could this presage further consolidation? Not according to the companies.   FT, December 18, 2007                          

 

 

4.  Cisco’s C-Scape Conference

 

We will be writing a separate report on this conference, emphasizing video collaboration, Internet traffic trends and WiMAX.  But in the meantime, here are a few helpful links:

 

Cisco’s web site for C-Scape:  http://newsroom.cisco.com/dlls/2007/hd_121107.html#feature_articles

 

Cisco roadmap focuses on video, collaboration
Search Networking - Dec 12, 2007
By Kate Gerwig, Site Editor, SearchTelecom.com Outlining its high-level plans, Cisco kicked off its C-Scape 2007 analyst conference in San Jose on Tuesday, ...

 

WiMax Plans Moving Ahead at Cisco
New York Times, United States - Dec 13, 2007
... said Brett Galloway, general manager of wireless networking at Cisco in a short interview at C-Scape 2007, a Cisco analyst conference. ...

 

Video's impact on Internet 'just scratching the surface' 

PARTICIPANTS AT CISCO'S C-SCAPE CONFERENCE PEER INTO THE DIGITAL FUTURE

By Mark Boslet  San Jose Mercury News  Article Launched: 12/12/2007

 

Cisco's WiMAX strategy: Emerging countries

Alan J Weissberger,  WiMAX 360 post- related comment added:

http://www.wimax360.com/forum/topic/show?id=610217%3ATopic%3A48033

 

Abstract:  At the closing C-Scape session on Wednesday, December 12th, Cisco clearly articulated their WiMAX strategy, which has a sharp focus on emerging market countries. Much to my suprise, fixed wireless access is much more important then mobile access in those countries, because the most prevalent type of PCs are desktops (not notebooks as I thought).

Intel answered a question about its new development platform for light- weight, low power access equipment with built-in WiMAX interface.  The platform was described earlier this year at the Intel Developer Forum meeting   More in a future report......