Analyst Opinions on Cisco's CRS-X Core Router & Its Impact on Competitors

Product Announcement:

The Cisco® CRS-X, which will be available this year, is a 400 Gigabit per second (Gbps) per slot core router system that can be expanded to nearly 1 petabit per second in a multi-chassis deployment. The CRS-X provides 10 times the capacity of the original CRS-1, which was introduced in 2004 as a new class of core routing system designed to scale network capacity to accommodate the proliferation in video, data and mobile traffic, which has taken place over the last decade.

With 400 Gbps per slot density, the CRS-X multichassis architecture provides network operators the ability to scale using a 400 Gbps line card with Cisco AnyPort™ technology.  That  line card uses complementary metal oxide semiconductor (CMOS) photonic technology, called Cisco CPAK™, to reduce power consumption, reduce the cost of sparing, and increase deployment flexibility.

For example, each interface can be configured for either single port 100 Gigabit Ethernet, 2×40 GE, or 10 x10 GE and either short-, long-, or extended-reach optics by selecting a specific CPAK transceiver. This flexibility simplifies network engineering and operations and helps ensure that service providers can meet the demand for 10 GE, 40 GE and 100 GE applications without replacing hardware.

Additionally, the CRS-X improves the simplicity and scale of IP and optical convergence. Service providers can now choose between deploying integrated optics or the new Cisco nV™ optical satellite. Both allow for a single IP and optical system that utilizes Cisco’s nLight™ technology for control plane automation. The nV optical satellite deployments operate as a single managed system with the Cisco CRS Family to reduce operational expense and deliver high-density 100 GE scaling.

More information is in the press release


Since the first CRS router made its debut in 2004, Cisco has brought in a total of $8 billion in revenue from the product range, according to Stephen Liu, Cisco’s director of service provider marketing.  “The CRS-X is the innovation we need to cross the $10 billion barrier,” Mr. Liu told Reuters.

Cisco’s rivals in the core Internet router sector include Juniper Networks, Huawei, and Alcatel Lucent.   Cisco was not the first vendor to offer 40Gbps per slot in a core router – Juniper took that honor. It wasn’t the first to offer 100Gbps router either – Alcatel-Lucent, Huawei, and Juniper were all there first.  Moreover, Alcatel-Lucent and Huawei each beat Cisco with 400Gbps products. However, with 54% of the global core router market, Cisco has proven that being first to market does not guarantee success.


Analyst Opinions:

Market research firm Current Analysis was quite positive about Cisco’s new CRS-X core router.  In a note to clients Current Analysis wrote:

“(We are) Very positive on Cisco’s launch of the CRS-X, because it provides existing CRS Series customers with an upgrade path to address growing scale and capacity requirements in their IP core networks. In addition to providing high-scale performance for high-density 10G, 40G and 100G-based services, the system incorporates Prime Management, nLight and new software to support network programmability in order to help service providers cope with unpredictable traffic patterns and to optimize network resources while improving time to service. The new ‘AnyPort’ technology helps reduce inventory costs by providing a common line card base card that can be flexibly configured. Closer integration between the IP and optical network is also provided, which improves resource utilization and provides a level of programmability to the transport network using the Cisco 15454 ONS platform as an extension shelf. The announcement also includes endorsements from SoftBank and Verizon, which confirmed the need for scale, resiliency and investment protection.”

UK based Ovum wrote:

“With the introduction of the CRS-X, Cisco is sending a message to its carrier customers: your investment in CRS products is being protected. The role of the core router revolves around high-performance, high-capacity packet processing. Core router vendors have been challenged to increase the capacity of their products to meet the growth in network traffic without the operator having to do a complete forklift of their existing systems.”

“Rather than simply comparing feeds and speeds against competitors, Ovum believes the key to success for the CRS-X will be the differentiation provided by coupling the product to Cisco’s Elastic Core solution and nLight technology for control plane automation and IP and optical convergence. The nV Optical Satellite capability announced with the CRS-X is an example of this type of differentiation. The nV Optical Satellite provides a single integrated management interface for control over the CRS and remotely located 100G DWDM platforms to reduce opex.”

http://ovum.com/2013/06/13/cisco-crs-x-delivers-a-message-investment-protection/

Northland Capital Markets wrote that growing pressure on carriers from cloud computing usage may prompt them to upgrade to the CRS-X:

“We see carriers/cable operators/ content providers requiring core router refresh as result of an increase in traffic generated by Cloud services and machine-to-machine connectivity. We believe Cloud computing has redefined the way applications run on the network, exposing the underlying limitations of providers’ existing networks.”

Raymond James’ thinks Cisco’s new core router will prove to be a challenge for non-router vendors as well as traditional competitors Juniper, Huawei and Alcatel-Lucent.  Finisar, Ciena and Infinera were singled out in this report excerpt:

“CRS-X will use Cisco’s internally developed CPAK optical interface, which represents a headwind for Finisar. Cisco promotes its architecture for Converged Transport Routers and cites deficiencies in alternatives (“Hollow core” – leveraging OTN and optical like Ciena’s 5400 and “Lean core” – leveraging MPLS like Juniper’s PTX), and argues that its converged solution of optical, MPLS, and routing with Cisco Prime management bringing the layers together.  Similar to Cisco, Alcatel-Lucent combined its optical and routing units into a single organization, but it offers a two-box strategy (1830 and 7950). Optical integration matters, but we don’t know pricing. Cisco has offered IP over DWDM in the past, but high prices discouraged some carriers from using these interfaces, instead opting to plug the routers into long haul optical platforms; we suspect the CRS-X will go after this application more aggressively, which could pose a threat to long haul 100G competitors such as Alcatel-Lucent, Ciena, and Infinera.”


CRS-X Puts Pressure on Cisco’s Competitors:

Current Analysis wrote in a report to clients:

  • Alcatel-Lucent needs to keep up the pressure to move upcoming IP core refresh cycles its way. The 7950 XRS has obtained nine customer wins and multiple ongoing field trials since its launch, which shows that there is a definite interest in the metro IP core proposition as well as leveraging the platform for pure IP core applications. Alcatel-Lucent should also elevate its service provider SDN vision, as its competitors are doing.
  • Juniper should provide a roadmap for its two core network solutions, the PTX Series and the T Series, where it needs to close the current performance gap (the T Series delivers 240 Gbps per slot). The capacity race often follows a ‘leapfrog’ model, where one vendor’s refresh cycle trumps another’s for a period of time; Juniper needs to counter Cisco’s latest CRS-X move carefully. Juniper also should continue to make the case for a more agile and flexible network based on its four-step SDN roadmap.
  • Huawei needs to capitalize on its IP core momentum and announce (or, at least refer to) customers that are, or will be, using the 480 Gbps/slot capabilities announced for its NE5000E IP core router. Huawei also needs to sharpen and reaffirm its SDN message with respect to its network core architecture and integrate SDN into its SingleBackbone model.
  • ZTE needs to update its T8000 roadmap and hint as to when it will deploy higher-density 100G interfaces on the platform. ZTE needs to join the fray with an SDN message of its own that builds on its current management capabilities.

Ovum believes Juniper must respond: “When Cisco’s CRS-X becomes available, Juniper will become the only one of the top four core router vendors not delivering 400Gbps-per-slot capacity in its core router product, unless it announces a capacity upgrade to its core router in the next six months. Its largest capacity core router product, the T4000, delivers only 240Gbps bandwidth per slot. Juniper’s PTX product is ready to provide 480Gbps per slot, but line cards to take full advantage of the available capacity are not yet available, and the PTX is an MPLS-optimized core switch, not an IP core router. ”

Raymond James thinks that Juniper and Alcatel-Lucent are now at a competitive disadvantage in the core router market:

“The new CRS-X can support 64 100 Gbps ports in a standard seven-foot rack, which compares to 80 for Alcatel-Lucent’s 7950 and Juniper’s 32 on its T4000. In a multishelf configuration, Cisco claims it can support 1152 slots or 922 Tbps.”


Closing Comment:

We find it quite interesting that despite the tremendous hype around SDN, it wasn’t mentioned at all in Cisco’s CSR-X product announcement.  Nor did any analysts have any SDN comments related to the CSR-X.

In a new on-line video, Cisco’s Lew Tucker talks about SDN in the context of OpenStack cloud software, but doesn’t mention the CSR-X product:  http://newsroom.cisco.com/video/1170801

Cisco's turn around strategy is working, but for how long?

Networking-equipment-maker Cisco Systems said its fiscal second-quarter revenue and profit gains illustrate that its turnaround strategy and internal revamp are working. The vendor reported a 43.5% increase in net income for the quarter and revenue improvement of about 11%, higher than its forecast. “We believe our vision and strategy are working,” said CEO John Chambers.  “We are executing well on our three-year plan to drive earnings faster than revenue. We hit our billion-dollar expense reduction a quarter early,” he added.

Cisco slowed down its usually aggressive acquisition activity during the slump but is now back in the game, Chambers said. The company’s ideal buyout target remains the same:  a company with about 100 engineers and a product about to come to market.   They are especially interested in companies that Cisco’s customers recommend for acquisition.

The company’s revenue from its flagship products – routing and switching revenue each grew, but by only 8 percent to $3.6 billion and $2.1 billion, respectively.  Service-provider video infrastructure, another key focus at Cisco, saw revenue grow 23 percent.   The UCS (Unified Computing System) of Cisco’s business grew significantly in the second quarter, with revenue up 91 percent from a year earlier and an accumulated customer count of 10,763.  With both these servers and the Nexus line of switches, Cisco expects to gain ground in data centers because of virtualization and cloud strategies, Chambers said. The line will blur between servers, networks and storage, which Cisco is addressing through its partnership with EMC and VMware, Chambers said.  Overall, data-center revenue was up 88 percent.

Much of Cisco’s revenue growth in the second period again came from new product lines. The company’s collaboration business, which includes high-end Telepresence videoconferencing systems, was up 10% to $1 billion. Revenue in the group that sells set-top boxes to cable companies grew 23% also to $1 billion.  For the current quarter, Cisco forecast revenue growth of 5 percent to 7 percent and non-GAAP earnings of $0.45 to $0.47 per share.

During the earnings conference call, Mr. Chambers stated,

“The major transitions from an information technology to business technology are accelerating in our enterprise, service provider, public sector and commercial accounts, and across most industries and geographies. Although we are only in the early stages of this transformation, our ability to use innovative solutions and intelligent networks to enable our customers to achieve their goals and their growth, productivity, cost savings, new consumption and business models is increasing and achieving increased customer acceptance.

These are, in many ways, unusual times. On one hand, the business feels good. The demand for Cisco products and services is healthy, and our relationship with our customers are the strongest they have ever been. On the other hand, there is significant uncertainty in the broader macro environment, and as such, it is prudent for us to remain conservative in our outlook for the second half of the fiscal year. For the remainder of FY ’12, you can expect us to make the required investments to advance our market leadership and drive innovation while holding to our financial model.”

“This is a validation of their turnaround strategy,” said Brian Marshall, an analyst at ISI Group. Still, he said that after a tough year, the results put Cisco back where it should be.

More info at:  http://online.wsj.com/article/SB10001424052970204136404577211462177287688.html?mod=dist_smartbrief

Transcript of earnings call at:  http://seekingalpha.com/article/352431-cisco-systems-ceo-discusses-q2-2012-results-earnings-call-transcript

Comment:  While the Cisco’s refocus efforts paid off big in the 2nd quarter, we wonder how the  slowdown in global government tech spending and conservative European tech budgets will effect future results.

 

Viodi View – 11/09/2009

Minneapolis was the no nonsense setting for last week’s OPASTCO Technical and Marketing Symposium. What I like about this particular conference is its intimate nature and the way it mixes marketing and technical topics making them relevant for both management and staff. The theme of this conference was, “Tools to compete in the global economy.”

Chris Purdy of PTCI explained the configuration tool that his company developed that lets customers create custom bundles and see the savings of various options. Similarly, Anita Fledderman of Enhanced Telecommunications explained how their “You Pick” bundle, which allows the customer to decide how many of their six services they want to bundle, has helped grow revenue and service penetration. The number of services per subscriber increased thanks to this tool and the revenue per sub went from 2 to 3.75 while the total average revenue went from $60 to $95 per month. 


click here to watch the videoMarketing, Monetizing, & Technical Sides of Video

Michael Koons of Cisco discusses how service velocity is an increasingly important factor in a telco’s ability to remain competitive. He also talks of how the video headend is morphing into a video data center. Michael touched on these points and more as a keynote speaker at OPASTCO’s 2009 Tech and Marketing Symposium. 


Cisco is a ____ company? Strong push into data centers by Alan Weissberger

With all the recent announcements, we wonder what kind of a company Cisco has evolved into? They seem to want to provide a solution to every conceivable IT market segment. This morning I heard a KCBS radio commercial about Cisco delivering movies over a private network in a dentist’s office. Later today, I read in the NY Times that Cisco and EMC have formed a joint venture to pursue the data center market for large business.  Click here to read the rest of Alan's analysis.   


click here to watch the videoI will miss the presentations at TelcoTV next week, but, fortunately, we have some sneak previews of a couple of the speakers who will be on the panel, Conquering the Home: Life Beyond the NID: “Connected Home Gateways.

Z-Wave Applications and More

Ken Lowe of Sigma Designs will be speaking at TelcoTV next week on the panel, “Connected Home Gateways”. Unfortunately, we will miss that panel, but fortunately, we did catch up with him at Parks Associates’ Connections Conference last June. In this video interview, he discusses the role of Z-Wave; integration of Z-Wave into residential gateways will make it even easier for telcos to participate in the home control market.  Click here to watch the video.


click to watch the videoHome Networking, Over the Top and Off-Air – New Ways to Add Value

Old friend and frequent Viodi View sponsor, Entone’s Steve McKay will be a panelist at TelcoTV next week on the panel, “Connected Home Gateways”. In this video interview, shot at Parks Associates Connections Conference last June, McKay talks about what Entone is seeing with over the top services, as well as hybrid models that combine over the top and off-air, broadcast signals. He suggests that the cable operators may be at a bit of a disadvantage with their large embedded base of set-top boxes that won’t support some of these new services. He also talks about the power of the home network to simplify and reduce the number of set-tops in the home.  Click to watch.


The Korner: Inspired Inbound Marketing  

click to watch the videoAt OPASTCO’s Tech and Marketing Symposium, Mike Volpe of Hubspot provided an inspiring talk regarding how companies can effectively use social media tools.  Volpe suggest that marketers need to think like publishers, instead of advertisers. The implication is that companies need to be content producers, which is something consistent with what Viodi has been saying about telcos and why they should be involved in local content production. He stressed the importance of opening up your media to multiple social networking platforms.

Pamela White, of ANPI, provided a real-life example of how the techniques that Volpe recommended improved ANPI’s marketing efficiency. In a somewhat ironic twist, White and I met via cross-linking of Twitter accounts and the OPASTCO Tech and Marketing Symposium was the first opportunity we had to meet in person.

Volpe’s remarks inspired us to clean up some of the subtle issues that have plagued the Viodi.com and Viodi.TV web sites. Our enthusiasm for making these changes may have caused a temporary outage on ViodiTV. At least we backed up the database and have the videos spread throughout the web. Click here to watch the video interview with Volpe and White.

Broadband Wireless and the Connected Home: Telecom Council Meeting Review

Introduction

This article covers the wireless networking aspects of the Connected Home – both inside and out. It is primarily based on the Telecom Council’s[1] May 14, 2009 meeting titled, “The Connected Home: Services and Models.” Trends in delivery of multiple residential services, mobile broadband, home networking, and remote access to the connected home are examined. We also highlight a few related news items from Sling Media (now Echo Star) and Motorola. 

In advance of the meeting, the Telecom Council published the following statement:   "The PC, the TV, the Internet and the home are converging in a very real way. Real products launched into the market don’t just blur the lines between TV and PC, but in fact make it increasingly clear that any screen is fair game for any content, and the service will come from both broadcast, uni-cast, and from within the home. Of course, screens and media are just a part of the Connected Home. Media sharing, photo display, home security, fixed phones, cameras, HVAC control, entry control, family organization and communication, are all becoming inextricably entwined."

While we are skeptical that all the consumer electronics in the home will be connected to each other any time soon, we were aware that mobile devices are now remotely accessing TVs (Sling Box), and will soon be accessing video content on DVRs, and videos/photos/ images stored on a home based file server.   This trend will likely accelerate with the growth of mobile broadband networks.
 
Presentations and Discussion
 
Gabriel Sidhom, CTO of Orange Labs (South San Francisco) and VP Technology for France Telecom R&D provided Orange/FT’s perspective on delivering multiple services to the home via an integrated IP network. Orange/FT provides fixed and mobile telecom services in France, U.K., Spain, Poland, Africa and the Middle East. They see mobile broadband and IPTV growing at annual rates of 70% and 66% respectively in the countries where they provide services. 
 
A key point is that broadband growth is coming from services- both triple- play to the home, mobile data and video.
 
Rob Hull, Vice President – Business Development, British Telecom offered his views on “The Mass Market Digital Home.” Rob shared what BT had learned from the video services (e.g. broadcast digital video, VoD and PVR) they provide to residential customers:
 
  1. The mass market is considerably behind the early adopters.
  2. Selling the concept is harder then selling the box (e.g. STB).
  3. Customers expect SPs to provide excellent customer service.
  4. Don’t try to pre-empt what customer’s want.
Mr. Hull listed several requirements for Digital Home 2.0:
 
  • Access networks with sufficient speed to support all the equipment/ devices in the networked home
  • High speed home network coverage for the entire home (wireless repeaters may be needed for large home networks
  • Ubiquitous access to content: in-home on different devices; outside of the home
  • Monitoring services: energy, people, home security
  • Easy to set up and manage (considered critically important for success)
  • Inexpensive enough for mass market adoption
Gary Iosbaker, Distinguished Technologist, Hewlett Packard presented his company’s strategy and vision for the connected home and remote access to it.   A few very important industry trends:
 
  • Broadband communications has gained critical mass
  • On-line content is exploding
  • Communications and entertainment services are converging
  • Home networks are growing in number and in connected equipment devices
  • Mobile Internet- independent of access technology and devices
  • Mass customization will be required
  • Centralized home storage and connected devices will enable sharing of content and services from within or outside the home (eventually from anywhere there is an end to end broadband connection).
  • Uploads of photos, multi-media images, and videos will continue to grow very rapidly (placing new demands on upstream bandwidth)
  • New services will be created for uploading and downloading user content to/from the connected home.
Mr. Iosbaker made what was perhaps the most interesting remark during this Telecom Council meeting: remote users will access home digital storage via broadband wireless networks– on their smart phones, new gadgets, and/or notebook and netbook PCs.  Mobile WiMAX and LTE were seen driving this capability to access any home information from anywhere. 
 
This capability exists now to some degree with Slingbox remote TV access (see What’s New With Sling below). I’ve heard that a few “geek-like” users had a home network set-up whereby they were able to remotely view pre-recorded TV programs on a DVR from their mobile phones or notebook/ netbooks.
 
Chris Dobrec, Senior Director – Strategy & Business Development, Cisco talked about home networks and consumer networking gear. Home networking and entertainment has become a $3.5B business for Cisco, with their acquisitions of Linksys (WiFi routers) and Scientific Atlanta (STB). The company has announced several additional networked consumer electronics initiatives at the CES earlier this year and is advertising this theme on popular media like TV commercials . 
 
Mr. Dobrec sees a “media enabled home,” with many connected devices and equipment. These include: TVs, DVRs, PCs, game consoles, smart phones, networked audio, MP3 players, storage devices, media servers, IP cameras, and other gadgets. He says that the average number of devices on a home network is approaching a half dozen in broadband homes.  But early adopters have many more than that. Chris thinks of himself as a Home Network CTO.  He has 18 devices on his home network!
 
According to Mr. Dobrec, the devices and equipment on a home network will not only share a broadband wide area connection (as they do now via WiFi), but also they will also connect with one another. Can this really happen with the proliferation of home networking technologies? Chris says yes and Cisco will make it real! He indicated that Cisco is making home network converter boxes that have the capabilities of multi-protocol home network PHY and DL layer translation and routing. They plan to support Ethernet over twisted pair, WiFi (including 802.11n), HPNA, MoCA (Multimedia over Coax Alliance), and BoPL (Broadband over Power Lines). Not all the technologies will be available in the same converter box, but some of these boxes are now available and being sold.
 
In conjunction with their Clearwire partnership, Cisco is developing Mobile WiMAX/ Wi-Fi devices that extend its Linksys line of home network routers. The devices, expected later this year for the CLEAR 4G Mobile WiMAX service, will be marketed to consumers, small office/home office, and small-to-midsize business users. We now expect those devices will essentially be WiFi to USB converters that require an external WiMAX modem or USB dongle to access the CLEAR network. We hope they will soon contain an integrated WiMAX radio and air interface.
 
What’s New With Sling?
 
No discussion about broadband access for the connected home would be complete without examining the Sling Box. For the last five years, this device, has allowed users to pipe all their existing cable and satellite TV channels onto the Internet and then to any computer or smart phone with a broadband connection.   In 2007, Sling Media was quietly acquired by satellite TV company EchoStar. Soon thereafter, Echostar split itself into two public companies: the Dish Networks for consumer TV business, and the Echostar Corporation, which owns Sling and is devoted to developing and licensing digital equipment for the television industry.
 
Sling also offers cable and satellite companies an easy way to get television to a variety of mobile devices without having to develop specific video services for each. Sling recently released a $29.99 application for the Apple iPhone, for example, although AT&T insisted that it work only over WiFi, and not over the carrier’s 3G network. AT&T said it feared that Sling’s streaming video could hog its bandwidth and lead to dropped calls.
 
This summer, Dish Networks plans to offer a set-top box embedded with Sling’s features to its 14 million subscribers across the country. Called the Sling Loaded HD DVR ViP 922, it will be offered to subscribers for $199.   Later, EchoStar plans to license Sling technology to other satellite and cable TV operators and consumer electronics companies. If successful, the concept of “place shifting” or “Slinging” shows to any device or PC could become a standard feature of most high-end cable TV set top boxes.
 
For more on this topic, please see:

Slipstream: From TV to the Web to Your Phone

Motorola enters embedded consumer device market with broadband wireless data cards

Manufacturers looking to take advantage of the increased speeds offered by 3G and 4G mobile broadband wireless networks such as WiMAX, HSPA and LTE can soon add off the shelf Motorola PCIe data cards into their notebooks, netbooks, portable gaming devices and other networked consumer electronics.
 
Motorola sees embedded wireless as a potential goldmine down the road. According to research firm Strategy Analytics, there will be 100 million devices with 3G or 4G technology embedded in them by 2014.
 
Gary Koerper, vice president of engine systems for Motorola Mobile Devices had a lot to say about Motorola’s new opportunity: "We see wireless broadband in consumer electronics being a tremendous growth opportunity not just for Motorola, but for the entire industry, In the next five to seven years everything you own will be connected to the Internet. As operators continue to deploy higher speed wireless networks to accommodate for growing consumer demand for mobility, there are opportunities for manufacturers and operators to roll out a wide range of low-power consumer electronics to enhance today’s mobile lifestyles. We look forward to working with the leaders in the wireless broadband ecosystem to incorporate high-speed broadband into more devices."
 
A variety of circuit cards will be offered:
 
  • The Motorola WTM1100 is an IEEE 802.16e Wave 2 compliant, single-band Half Mini-PCIe wireless network adapter that operates in the 2.5 GHz or 3.5 GHz spectrum for WiMAX connectivity.
  • The Motorola HTM1000, a 3G/2G HSPA, EDGE and GPRS Half Mini-PCIe WWAN adapter that supports HSPA data rates up to 10.1 Mbps downlink and 5.76 Mbps uplink.
  • The Motorola offers the LTM1000 single-mode LTE card, which is capable of speeds up to 100Mbps downlink and 50Mbps uplink. All three products conform to the PCIe revision 1.2 standard. 
For more information, please see this press release:
 
Conclusions:
 
Home networking with broadband Internet access should be a major growth area in the converged world of computing, communications and entertainment.  We can expect to see lots more innovation in the connected home and remote (especially mobile) access to it. But first we need media and storage servers to be present in home networks and web addressable as if they were a web server on the Internet. Watch HP for new technology in this area. 
 
The idea of multi-protocol home network routers is very enticing, given the plethora of home networking wireless and wire-line standards (WiFi, Ethernet, MoCA, BoPL, etc). We expect Cisco to be the leader in this market segment. 
 
Keep your eye on Sling technology being embedded in new set top boxes and mobile applications for smart phones.  It will be interesting to see if EchoStar can successfully license their technology to other satellite, cable TV, or telco video providers.
 
Finally, we expect Motorola’s new wireless PCIe data cards to accelerate time to market for many new mobile and wireless devices for consumers.

[1] The Telecom Council (www.telecomcouncil.com) meets regularly to discuss key business issues for telecom decision makers. Carriers and their venture capital divisions located in Silicon Valley are the principal members (the Council was formerly known as the Service Provider Forum).

 

Gary Reback: US Government Must Enforce Antitrust Laws to Encourage Innovation

On the need for government intervention in the free market to protect competition and encourage innovation

Gary Reback is one of the nation’s most prominent antitrust attorneys, best known for spearheading the efforts that led to the federal lawsuit against Microsoft.   Gary spoke to an attentive and eager audience on May 14th in Santa Clara, CA.   The Commonwealth Club and Yale Club of Silicon Valley sponsored his enlightening and provocative talk. Reback’s main message was that the government l’aissez faire policies, so strongly promoted by University of Chicago economists, have gone way too far. As a counter-weight, he says we need more government oversight of the private sector along with more vigilant anti-trust enforcement.
 
To set the stage for the current recessionary economy, Gary began by chronicling the history of the U.S. antitrust movement. From its beginnings in the 1870s (a time when big business controlled the railroads), through Teddy and Franklin D. Roosevelt, Thurmond Arnold and others, there has been an ebb and flow of power and control between the federal government in Washington and big business (e.g. monopolies) or Wall Street investment firms. Starting about thirty years ago, conservatives forced an overhaul of competition policy that has loosened business rules for everything from selling products to buying competitors. In the free market era of the 1990s, big business and investment banks certainly had the upper hand. To a large extent, that is what has caused the global financial meltdown and enabled companies like Microsoft, Intel, Cisco, Oracle, and Google to become so powerful. We were surprised to learn that expensive medical care and non-generic prescription drugs are the result of a lack of anti-trust enforcement.
 
Mr Reback firmly believes that in a high-tech world, U.S. government “hands off” policies actually slow innovation, hurt consumers, and entrench big companies at the expense of entrepreneurs.   In particular, Gary calls for increased government scrutiny of high tech firms monopolistic practices. He argues that monopolies have the power to raise prices by restricting output, supply and competition. As a result, the economy weakens, unemployment increases, and innovation is pressured.
 
We take it for granted now, but many of the advances in semiconductors and software were the result of a few dominant lawsuits against big companies. 
 
In the late 1950’s, AT&T was forced by the U.S. government to license the transistor. William Shockley, one of the co-inventors of the transistor, licensed it from AT&T to form Shockley Labs, which later begat Fairchild Semiconductor, which in turn begat Intel, AMD, and National Semiconductor. The early years of the semiconductor industry in Santa Clara Valley (it was not called Silicon Valley till the mid 1970s) was therefore, a direct result of the lawsuit against AT&T. For more on those early years, please see the article by this author:
 
 
In the early 1970s, concerned about possible anti-trust legislation, IBM was forced to unbundle software from hardware. This created a whole new independent software industry, which had not existed before. Software had previously been bundled with mainframes and minicomputers made by the same computer manufacturer.
 
Merger enforcement is perhaps the biggest business issue of our time, according to Reback. What do we do with companies too big to fail? How about Citibank Group, for example? If it had not been for the repeal of the Glass Steagall act in 1999, Citi would not have been able to acquire Smith Barney, Solomon Brothers and other investment firms. Hence they would not have gotten too big to fail.   Better to have government carefully scrutinize the mergers and acquisitions and/or break up large companies before they become too big to fail! One has to wonder if certain tech companies, like Oracle and Cisco have become too dominant in their industry or even too big to fail because of acquisitions that occurred without anti-trust scrutiny. For example, Oracle has done over 40 mergers after it acquired People Soft and now has proposed to acquire Sun Microsystems.
 
Is Google the next Microsoft? Yes, in terms of its dominance over web search software, in comparison to Microsoft control over desktop and notebook PC software. No, in at least two other important ways: 
  1. Google created technology that people liked and it worked well. 
  2. The company was also more customer friendly with a more congenial corporate culture and image.
Author’s Note: the next battle between these software titans will be in mobile OS market- Android platform from Google vs Windows Mobile from Microsoft.
 
Gary believes that Google’s big search competition will come from social networking sites (e.g. Twitter and Facebook), rather then from traditional search engines from Yahoo or Microsoft. He also noted that potential anti-trust action was enough for Google to call off its plans to put adverts on Yahoo’s search result pages.
 
Was the European Union’s (EU) huge fine against Intel Corp justified? Just one day before this talk- on May 13th– EU regulators slapped a record 1.06 billion euro ($1.45 billion) fine on Intel for antitrust violations and ordered it to halt illegal efforts to squeeze out arch-foe AMD. This fine was levied after an 8 year EU investigation of the company. "Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years," EU Competition Commissioner Neelie Kroes told a news conference.
 
Should Intel have known better to refrain from engaging in unfair trade practices? Most definitely yes, according to Gary. Intel was actually a U.S. government witness in the huge anti-trust suit against Microsoft in 1998. The plaintiffs (US Department of Justice and 20 states) alleged that Microsoft abused monopoly power on Intel-based PCs in its handling of operating system and web browser sales. The issue central to the case was whether Microsoft was allowed to bundle its flagship Internet Explorer web browser software with its Microsoft Windows operating system. Bundling them together is alleged to have been responsible for Microsoft’s victory in the browser wars, especially over arch rival Netscape (which seemed by this author to be a superior web browser). Didn’t Intel learn anything from the trial and the verdict against Microsoft regarding unfair competitive practices? Gary response, "Of course, Intel says it is innocent of the charges and never broke the law, so perhaps the company will be exonerated after the EU Commission decision is reviewed by the European courts."
Opinion: We suggest the reader to ask the question to an Intel executive or lawyer.
 
In summing up, Reback opined that “anti-trust action failures” in the health care and banking industries have contributed to unreasonably high medical costs and a financial meltdown. Meanwhile, heightened scrutiny over acquisitions (e.g. Oracle’s) would result in a stronger U.S. economy by encouraging more competition and invigorating innovation and the start up culture. 
 
 
Bio: Gary Reback is one of the nation’s most prominent antitrust attorneys. He has been named one of the “100 Most Influential Lawyers” in America by the National Law Journal and is quoted regularly by major media. His book Free the Market! is a memoir of Reback’s titanic legal battles—involving top companies such as Apple, Microsoft, IBM, Oracle, and AT&T—and a persuasive argument for measured government intervention in the free market to foster competition.   Gary is currently of counsel with Carr & Ferrell LLP. He is a very friendly and easy to get a long with person, in this author’s opinion.
 
 
 

WCA Panel Session: Femtocells and their consequences for Mobile Broadband Technologies

Background:

Femtocells are low power 3G/4G cellular base stations which can be thought of as wireless Access Points (AP’s). Instead of a WiFi Access Point we’re all familiar with, a femtocell could be a UMTS, CDMA/EVDO, LTE, or Mobile WiMAX Access Point, depending on the underlying mobile network technology. The bi-directional voice and data traffic is taken off the respective wireless network and placed on the Broadband Internet connection at the home or office. Femtocell suppliers claim they’ll be capable of communicating at 3G (HSDPA) and 4G (LTE, mobile WiMAX) speeds, depending on the bandwidth of the broadband Internet connection (which could be a bottleneck).
Femtocells will provide mobile handset and notebook PC coverage in a home or business with typically 2- 4 simultaneously active users. Picocells are larger APs designed for enterprise use, with higher output power, to handle more simultaneous users. No changes are required to the handset, notebook PC, or other mobile devices, [the SIM card in a mobile device might be programmed to authenticate the user].   The residential and enterprise femtocell markets have very different requirements and operators will likely target one of those market segments. Some carriers see the need for enterprise femtocells creating a bigger market opportunity than residential. With few exceptions (e.g. T- Mobile USA), femtocells are preferred to WiFi APs by mobile carriers.
Definition: Here is a link to the Wikipedia definition:
The Femto Forum is a not-for-profit membership organization founded in 2007, to promote femtocell deployment worldwide. They have published results of a comprehensive study project, which shows a positive femtocell business case:
Here is another useful web site: http://www.thinkfemtocell.com/
On March 17th 2009 the WCA Mobile SIG sponsored a panel on Femtocell technology and business models. The participants were as follows:
Moderator and Presenter: Stefan Scheinert, Principal, Scheinert Telecom
Panelists:
— Peter Walther, Product Manager, mimoOn
— Dror Nahumi, Partner, Norwest Venture Partners
— Behzad Mohebbi, CTO, Nextivity
— Tom McQuade, VP NA Sales, picoChip
— Michelle Pampin, Wireless Backhaul Specialist
Discussion:
One primary goal of femtocells is to take traffic off the mobile network, which operators have paid a substantial spectrum license fee to own and use for mobile services. With more and more voice and data traffic originating or terminating in homes or offices, this would free up spectrum for users on the move. It could permit more mobile users per cell site, OR smaller and cheaper base stations (with less output power), OR higher speeds per mobile user. However, this is all dependent on the broadband Internet connection and ISP policy regarding femtocell traffic. For example, a DSL connection would probably not provide enough bandwidth to carry traffic from multiple home or enterprise femtocell users. If the ISP is not the same as the mobile provider, it could block the traffic or at least throttle it back (e.g. Comcast and Bit Torrent). Why should the ISP give a free ride for traffic that would otherwise be on the mobile operator’s network?
Are femtocells the answer? There are several competing technologies, including:
·                    Unlicensed Mobile Access or UMA (WiFi based)- As noted earlier in this article, T Mobile is using this approach to provide VoIP over WiFi in the home, with GSM cellular voice outside. Users get dual mode handsets and calls automatically switch from one wireless medium to the other. But we suspect this might be a stop-gap measure until femtocells are ready for commercial deployment (see below).
·                    Macro Base Stations– with more output power: Seimens, Nokia, Ericsson are expected to build these higher throughput Base Stations (with up to 300 M bit/sec aggregate data rate).
·                    Repeaters– favored over femtocells when there is no high speed backhaul available, or the operators do not want to use femtocells. It was stated that LTE will likely use repeaters, rather then femtocells, due to higher speeds not supported by the broadband Internet connection. Vodafone, which has also conducted femtocell trials in a number of European countries, is said to be expanding its trials of repeaters in several European locations, although the company has admitted it would continue to evaluate both femtocells and repeaters.
Market Assessment: Norwest Venture Partners believes these different alternatives have created enough confusion to delay the femtocell market. As a result, the market has been slow to take off and difficult to justify. And even if the market for femtocells picks up, it might be difficult for a start-up to make money.
Voice over LTE: The current 3GPP release 8 specifies LTE as an all IP network, but does not include support for a voice codec. Most likely, voice will be offered via GSM or CDMA codecs, or a Skype like VoIP over LTE service. 3GPP Release 9 or 10 will specify voice codecs for use with LTE.
Here are a few critical issues/ checklist for femtocell deployment
(Source: Stefan Scheinert):
·                    Femtocell AP Box cost should be < $100
·                    Location awareness required, because Femtocells use licensed spectrum
·                    Macro network interference (from other femtocells and outside mobile network cells) requires dynamic management, i.e. an interference detector/sniffer to measure power strength of neighboring cells.
·                    Security and integrity of femtocell traffic over the Internet using the femtocell backhaul or broadband Internet connection.
·                    Plug and play with auto configuration on power up.
Author’s Opinion: Another issue (similar to WiFi free-loading) is how to ensure individual femtocells are only accessible to the homeowner or business paying the bills. Some type of automatic authentication will be required prior to use. And there is a national security issue as well- how operators can comply with regulations that allow for the interception of cell phone calls by law enforcement agencies?
Deployment of Femtocells
There are a large number of operators participating in the Femto Forum, which augurs for actual deployment in the near future. Picochip stated that they have licensed their femtocell technology to IP Access, which is working with Cisco to get femtocells deployed at AT&T. Cisco is contributing Self Organizing Network software to this femtocell initiative.   Three cities trials were said to take place in 3Q 09 with commercial deployment scheduled for 4Q09. In checking with my trusted colleague at AT&T, I was told that currently there are internal femtocell trials within the company, but nothing else has been announced.
We hear that there are many carrier field trials of femtocells, but no results have been announced. Many different variants of femtocell technologies are being trialed, according to our privileged sources. For example, T-Mobile (which has deployed VoIP over WiFi in the U.S.) has completed several trials with femtocells, and invested in the UK-based femtocell manufacturer Ubiquisys. It is said that the company plans to launch a commercial service using the technology by mid-year in Germany.
“Femtocell rollouts to date have been limited, controlled ones,” said Aditya Kaul, an ABI Research senior analyst. “Shipments at the end of 2008 were in the few hundred thousands, and at the end of 2009 should climb towards a million but will fall short.”   ABI Research expects that 2010 will see shipments climbing well above a million units. Indeed, vendors are gearing up for a big push, Kaul said. One of the industry’s main silicon suppliers, PicoChip recently announced a multi-million dollar injection of funding. Kaul said he expects that the funding will “probably be geared toward a ramp-up and that there is “a lot of similar activity behind the scenes, and new partnerships which point to preparation for a major market expansion.”
Late in 2009 or early in 2010, ABI Research said it expects an announcement of a multi-city commercial femtocell deployment by one of the major mobile operators, which may encourage other operators to follow suite.   Until now, large-scale femtocell deployments have only been simulated in computer models: real-world rollouts could pose challenges.
Price is one: ABI Research believes that although femtocell business models could be enabled at various price points, low-cost femtocells (under $100) are essential to bridge the gap between niche market and mass-market deployments.
Nonetheless, “These challenges are all valid, but none of them are show-stoppers – there’s no ‘elephant in the room’ that will pose a major obstacle to large-scale deployment,” according to Kaul. For more information, please see:
 
Recession Slows Femtocell Deployments, but Only Temporarily, According to ABI Research
There was some uncertainty expressed by the panelists, as to which network operator would actually deploy and maintain the femtocells. We think it will be the mobile operator that is offloading network traffic and providing better indoor reception to its customers. But Michelle Pampin, Wireless Backhaul Specialist, stated that it would be the provider of the broadband Internet service (who controls the QoS for the femtocell traffic that’s backhauled to the public Internet). Panel Moderator StefanScheinert told me privately that Michelle was not correct, i.e. that the mobile operator would own and sell the femtocells to end users/ enterprises.
Here’s a chart of Femtocell Deployment status in Europe:
Any WiMAX Femtocells?
 
There has been a lot of speculation about Comcast providing femtocells for its mobile WiMAX deployment (reseller agreement in Portland, OR announced and several cities have been targeted for mobile WiMAX build-outs. But at this time, there are more questions than answers.
Comcast initially said that femtocells would be part of its WiMAX strategy, but nothing was said about it when its Portland,OR WiMAX service was announced last week (reselling Clearwire’s CLEAR).   Comcast’s Sr VP for wireless and technology, Dave Williams, said in June 2008 that a key element of the Clearwire investment and partnership was to reserve 5 MHz of spectrum for WiMax femtocell deployments. That spectrum would also be available for use by any of the Clearwire consortium members, which includes Comcast, fellow cable MSOs Bright House Networks and Time Warner Cable Inc. as well as Google and Intel Corp.
“We’ll be pushing WiMax femtocells because we have a good customer base in the home — we sell HDTV, VOIP, and high-speed Internet connectivity. We want to take that experience in the home and add mobility,” Williams told Unstrung at the time. But Comcast has not said anything more about WiMAX femtocells- at least not publicly. For more on this topic, please refer to:   http://www.unstrung.com/document.asp?doc_id=173652
Conclusions and Companies to Watch:
As with so many new technologies, the jury is still out on femtocells especially for Mobile WiMAX, which has yet to establish a critical mass of subscribers. We are most concerned about the broadband Internet connection being a potential bottleneck (especially if it is DSL) and the broadband ISP blocking, metering or restricting femtocell traffic on its network. Stefan does not think the ISP will actually block femtocell traffic (note that the FCC fined Comcast for doing this). So there is a likely to be some contractual agreement between the mobile operator supplying the femtocells and the broadband ISP.
We would watch PicoChip, which appears to have leading edge femtocell technology. Please see this overview and ecosystem report:
Percello is an Israeli start-up femtocell manufacturer to also keep an eye on. They are designing a low-cost, high performance femtocell 3G W-CDMA baseband processor chip. Please refer to:

Viodi View – 1/7/09 Issue

Contact Roger Bindl for sponsorship opportunities

As we enter the last year of the first decade of the third millennium, it seems like it was just yesterday that we were at the dawn of Y2K. Then we had the big tech meltdown, along with what was the biggest tax cut in history. Here we are again with the start of another year and, in some ways, it feels like we have been here before. Let’s hope for new opportunities that will help us rise from the ashes of 2008 and make for a better 2009.


Click here to see the ViodiTV 2008 year in review

2008 – A Year in Video

Roger captures some of the ViodiTV highlights of 2008 in this brief montage of video clips from many of the events we attended this past year. Thanks to Roger for capturing and editing these clips. And thanks to all of the sponsors, who helped make this possible; Badger Communications, Entone, Genesis Technical Systems, HEM Productions, Innovative Systems, Martin Group, NeoNova and Solarus.


An Academic Book with a Populist Title – Useful for Anyone Interested in Pricing or Its Effects

What has become a tradition for the first issue of the Viodi View in the New Year is a book review. The book “Why Popcorn Costs So Much at the Movies” is an academic title wrapped in a populist title. It provides insight into a variety of pricing mysteries, such as the price of popcorn at the movies, why so many prices end with “9” and the economics of rebates. Although what Richard McKenzie, Professor of Enterprise and Society in Paul Merage School of Business at the University of California of Irvine, has written is fundamentally an economic text book, it is useful for anyone involved in pricing a product. Click here to read the rest of the review.


A Broadband Stimulus – A Chance for Something to Pass in Short Order?

Last Week’s Wall Street Journal had a good article on the prospects for a near-term broadband stimulus plan. The article referenced a Free Press proposal for a 3 year, $44 Billion broadband stimulus plan. This plan just might have a chance, as it has elements that equipment vendors could embrace and incumbent carriers would like. For instance, the plan ties closely to OPASTCO’s point that there is an intrinsic link between video and broadband deployment.   Click here to read more.Farsa política
Creative Commons License photo credit: Daquella manera


 And the Independent Telcos Suggest Stimulus

Further reinforcing the idea that a broadband stimulus may be happening sooner rather than later and that it will involve rural telcos, OPASTCO released a letter written to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid outlining their proposal in a white paper. This white paper, authored by the Digital Policy Institute, an independent think tank at Ball State University, suggests immediate build-out of a minimum of 25 Mb/s to 5.9 million rural homes through the use of one-time grants as part of the American Recovery and Reinvestment Plan.  Click here to read more.


Will Cisco Succeed in the Consumer Electronics Business? by Alan Weissberger

Cisco is thought of as a successful network equipment vendor selling switches and routers to enterprise customers and service providers. The company also sells (Linksys) WiFi routers and (Scientific Atlanta) set top boxes for use within homes. Sensing a new opportunity, the company now wants to make significant inroads in the digital home based entertainment market. Click here to read the rest of the article.


Are LTE and mobile WiMAX really 4G networks? A look at ITU-R IMT Advanced attributes by Alan Weissberger

There have been several recent articles comparing and contrasting LTE vs. mobile WiMAX as potential 4G network technologies. Indeed, SPRINT and Clearwire have been marketing their WiMAX offering as a 4G service. But is it really 4G? Is LTE a 4G technology? What about ultra-wideband?  Click here to read the rest of the post.


Some Upcoming Events

The Korner – And the Grand Prize Goes To…….

Click to view Roger's award winning video

As reported last month, Roger Bindl submitted a video to a Kraft video contest. One of the cool things about the Kraft contest is that Roger did not have to give up any rights to his video. This was a wise move by Kraft, as it opened up the contest to a more professional set of contestants. And congratulations to Roger, as he won the Grand Prize and a thousand dollars for his video submission!

Happy New Year!

Will Cisco Succeed in the Consumer Electronics Business?

Update: See comment below on Cisco entering the Compute Server Business.

Cisco is thought of as a successful network equipment vendor selling switches and routers to enterprise customers and service providers.   The company also sells (Linksys) WiFi routers and (Scientific Atlanta) set top boxes for use within homes.  Sensing a new opportunity, the company now wants to make significant inroads in the digital home based entertainment market. 

At CES next week in Las Vegas, Cisco will announce a new line of products, including a digital stereo system that is meant to move music wirelessly around a  house.  Sometime later in the year, the company plans to introduce a residential video conferencing system using camera’s and high-definition televisions (HD TVs). The quality will certainly be much better than today’s web cam technology, but will consumers be willing to pay for it? Cisco believes that in the near future, all TVs will be connected to home networks, but they don’t say how (we think it will be wirelessly-perhaps via IEEE 802.11n).

Cisco started to pursue the home networking market with Linksys WiFi routers and by acquiring set top box manufacturer Scientific Atlanta which is sold to MSOs. But the CES announcement is an attempt at a much bigger penetration of the home electronics market. Cisco hopes that people will want to use a version of its corporate videoconferencing system (Telepresence) for video chats with their friends and family over their HDTVs.

Opinion: We think it will be very difficult for Cisco to compete with brand name home elecrtronics companies like Sony, Panasonic, Apple, Samsung and many others. Considering the global economic contraction and its negative effect on consumer discretionary spending, this could be quite a challenge.  Do you think they can compete?  Do you think their timing is right? 

References:

With a Digital Stereo, Cisco Systems Is Starting a Push Into Home Electronics

http://www.nytimes.com/2008/12/29/technology/29cisco.html?_r=1&ref=technology

Cisco tests out home electronics market

http://blogs.moneycentral.msn.com/topstocks/archive/2008/12/29/cisco-tests-out-home-electronics-market.aspx

Cisco’s Misguided Foray Into the Living Room
 

Postscript:  Have you noticed the raft of new Cisco TV commercials for Telepresence and home networking?   They are evidently directed at consumers to build brand awareness. 

Verizon CTO on their LTE Rollout and Use of Femtocells in the Home

Contrary to what you’ve might have read elsewhere, Verizon CTO Dick Lynch did not make a surprise LTE deployment announcement on 12/8/08 at Cisco’ C-Scape conference. What he did say was: "We expect to have LTE in service somewhere in the U.S. around this time next year. We’ll follow that up almost immediately with LTE to the home using femto-cells, which probably will have WiFi in them." There was no definite LTE committment from Verizon and no mention of locations or scale for their LTE deployments.

A similar statement was made by Link Hoewing, Verizon’s VP of Internet and Technology Policy, in early October at the US Telecom Association’s 2nd Annual Executive Business Forum in San Jose, CA. Hoewing stated that Verizon Wireless "plans to roll out LTE in early 2010 with possibily 75M bit/sec downstream rate." So Lynch’s LTE statement moves that up a few months, but was not indicative of an accelerated mass deployment. We think the VZW LTE deployment will likely be a very controlled test bed evnironment, limited to one or more select cities.


Our rationale: With the LTE standard not completely finished, there aren’t even any pre-standard LTE devices available yet. Hence, we think it’s quite premature for any large LTE roll out one year from now. Testing and device certification will be required for mass deployment and that is at least 2 years off, in our opinion.


The uncertain timing of LTE availability was highlighted by Enrico Salvatori, senior VP and general manager for Qualcomm Europe, speaking at the company’s inaugural European Innovation Summit on 12/2/08. He cautioned that commercial availability of Qualcomm’s LTE/HSPA+ multimode device, dubbed the MDM9000, "still depends on a number of very uncertain factors." According to a report in EE Times, there are still major standardization issues to be resolved, even though the important Rev.8 standard is due to be finalized in mid December, that there is still uncertainty about which spectrum ranges LTE would be deployed, and noted there are many important choices to be made on network topology.

http://www.eetimes.com/news/latest/showArticle.jhtml?articleID=212201711

Mr. Lynch stated that low latency (e.g. 10 to 15 ms delay vs 110 to 125 ms with 3G) would be a distinguishing characteristic of 4G technologies. Ubiquity will be critically important to success. VZ believes that "LTE will be the dominant provider technology to deliver 4G wireless broadband data services," according to Mr Lynch. The company is working with partners Vodafone and China Mobile to ensure LTE is embedded in many different types of devices for consumers and enterprise customers. "Think of 4G broadband technology in every car on the road, in every meter in the house, in consumer electronic appliances you buy," Lynch said. An example of a broadband wireless machine to machine was given: a camera wirelessly connected to a photo storage facility, with the capability for the camera to do auto uploads after the wireless connection was established.

Another key point made by Lynch was that femtocells would be used to deliver wireless broadband to residential users who want wireless (not wired) devices for use within the home. In this case, the network access configuration would be LTE to/from from the cell site and the home, with femto-cells used to create a micro cell site within each home for broadband wireless data delivery.
 

A few questions to ponder:

Do you think LTE will the dominant 4G technology or does mobile WiMAX have a chance given that it is now available or soon will be?

Does mobile WiMAX have a chance given that it is now available or soon will be while LTE is atleast 2 years (or more) from actual deployment?

If so, how can mobile WiMAX capitalize on this time to deployment lead?

Update on Mobile WiMAX- is it really mobile (or only for wireless fixed line access)?

Over one year ago, I wrote an article titled: Will the real mobile WiMAX please stand up:

http://www.viodi.com/newsletter/061000/article2.pdf

The claim then was that IEEE 802.16e (AKA Mobile WiMAX) would be primarily used for fixed line BWA. Not much has changed in the last 18 months. Recently, there’ve been some encouraging announcements from Clearwire, Digital Bridge , and several overseas wireless service providers.  However, the overwhelming majority of WiMAX deployments continue to be for fixed BWA.  True mobile WiMAX service has been hampered due to several factors: a scarcity of native mode WiMAX devices, developing countries urgent need for fixed BWA, and the uncertainty of mobile VoIP (over mobile WiMAX) availability and roaming.

Where are the Native Mode WiMAX devices and MIDs?

The WMAX Forum says there are 480 WiMAX devices in development – by over 80 vendors. But we know of only one native mode WiMAX device – the Nokia 810 Internet Tablet Computer. We’ve heard a lot from INTEL about embedded WiMAX in Mobile Internet Devices (MIDs), but we haven’t seen any MIDs hit the market yet. While several notebook PC’s with embedded WiMAX chip sets have been announced, we don’t know of any available. Instead, dongle attachments are now needed for notebooks to access a WiMAX network.

Intel is now shipping its first-ever combined WiMAX/Wi-Fi module, formerly code-named "Echo Peak," as part of the Intel® WiMAX/Wi-Fi Link 5050 Series that is an optional feature for Intel Centrino 2-based laptops. Several leading PC OEMs have announced plans to deliver Intel® Centrino® 2-based notebooks featuring the Intel® Core?? processor with WiMAX including Acer, Asus, Lenovo and Toshiba. Beginning today, WiMAX-based Intel notebooks can be found online at Amazon.com and NewEgg.com. Dell, Panasonic, Samsung and Sony also plan to support WiMAX in their laptops starting in 2009.

Perhaps the scarcity of true mobile WiMAX devices is power consumption of Intel’s AToM processor and power amps.The general opinion is that the power added efficiency (PAE) of the power amps used in Mobile WiMAX terminals is far too low. Power amps for mobile phones, for example, offer PAEs of 40% to 45% for wideband code division multiple access (W-CDMA), and 50% to 55% for Global System for Mobile Communication (GSM). For Mobile WiMAX, though, the PAE is only 10% to 20%.   For more on this issue, please see:    Can WiMAX Really Go Mobile?

 
Where is Mobile WiMAX being deployed?

The U.S. carrier that is offering true mobile WiMAX is SPRINT (which is now part of the "new Clearwire") with its Xohm network- operational in Baltimore since October 3rd. The only handheld device we know of that’s certified to connect to Sprint’s Xohm WiMAX network is the Nokia 810 tablet PC noted above.

For more information, please check:

http://www.xohm.com/

The "new Clearwire” recently announced that, while its company name will remain Clearwire, its new mobile WiMAX services will be branded Clear™. The Clear™ brand will apply to all new mobile WiMAX services to be offered by Clearwire in the U.S. and will be phased in to those markets where Clearwire offers pre-WiMAX services, as these existing markets are upgraded to mobile WiMAX technology.

http://www.wimax.com/commentary/blog/blog-2008/december/Clearwire-Completes-Transaction-with-Sprint-Nextel-and-%243.2-Billion-Investment-to-Launch-4G-Mobile-Internet-Company-1201

CEO Ben Wolff said the company plans to upgrade most of the existing 46 Clearwire markets to WiMAX next year. He added that Clearwire’s cable partners (e.g. Time Warner) are expected to offer wireless services under their own brands using the Clearwire network.  Clearwire’s mobile WiMAX roll outs, together with MSO reselling, significantly increases the chances that mobile WiMAX will emerge alongside LTE (Long Term Evolution) as one of the technologies that will power the next generation of high-speed wireless data networks.

At the November 2008 WCAI Symposium, Digital Bridge Communications stated they plan to offer mobile WiMAX (along with VoIP) in 15 U.S. markets. Handoffs to other carriers along with full mobility will be inherent in that network, which we need to watch closely to see if there are many dropped calls or Internet sessions. The network, known as BridgeMAXX, operates on licensed 2.3GHz frequency and is said to be very secure.

http://www.digitalbridgecommunications.com/OurDifference/ComparisonChart/tabid/67/Default.aspx

What about the new 3.65 GHz networks in the U.S? All that were described at a WCAI session use the fixed line version of WiMAX (IEEE 802.16d or -2005). The 3.65 GHz band uses a non-exclusive or "light licensing" regime to promote rapid deployment of wireless broadband systems to rural and underserved areas.
 

What’s the status of true mobile WiMAX in other countries?

Korea Telecom (KT) is offering a form of mobile WiMAX as part of its WiBro service in Korea. The relationship between the two is detailed in this whitepaper:

http://www.wimaxforum.org/news/WiBro_and_Mobile_WiMAX_Backgrounder.pdf

Just last week, we read that telco YTLE is collaborating with Cisco to launch a mobile WiMAX Network in Malaysia. YTLE plans to deliver affordable WiMAX packages with fast, wide coverage and always-connected mobile internet services that will cater to and complement the personal and business communication needs of consumers as well as the enterprise community.

http://www.wimax360.com/profiles/blogs/ytle-enters-a-strategic

Other overseas carriers planning to offer true mobile WiMAX are: UQ (part of KDDI) in Japan, Scartel and Comstar in Russia. However, Lee Sparkman, principal at Entorta (another Russian Broadband Wireless carrier) stated their market was exclusively fixed wireless broadband. With a take rate of only 15%, BWA is cost effective in developing countries, while a DSL or cable build out couldn’t be justified.

Esme Vos of muniwireless.com has posted a map of cities around the world that have "mobile WiMAX" service. She writes, "By “mobile” I mean you can connect to the WiMAX network either via a USB dongle or a WiMAX-enabled device (not many of those). You can view the map on: http://www.muniwireless.com/wimax/wimaxmap/

The pain of finding mobile WiMAX networksI had no idea it would take so long to assemble a paltry list of cities with mobile WiMAX service. I went to several WiMAX websites to find WiMAX networks and make a selection. The problem is that although many of them indicate that there is a WiMAX network based on 802.16e (”mobile” WiMAX), in reality, you need a stand-alone modem to gain access to the network – not useful for travelers. Most of the sources I used are unreliable: in certain cities they say that the service is live, but when you go to the provider’s site, you discover it’s not.It took me half a day to cull through dozens of listings of “mobile” WiMAX service providers to come up with this limited list, which is not complete given that new providers will be launching service in the coming months. So think of the map as a movable target."   The full article can be read at:

http://www.muniwireless.com/2008/11/26/map-of-mobile-wimax-service-around-the-world-now-available/

———————————————————————————————————-

WiMAX in India Revisited

While WiMAX in India is expected to be a reasonably good market, we know of no Indian carrier planning to deploy a true mobile WiMAX service. Rather then a 4G competitor, WiMAX in India is seen as a wireless fixed line replacement or as a substitute for DSL/cable service. It is now operational from Metamax, Pronto Networks, Reliance Group, and Sify in the 3.3G and 5.8G Hz bands. There will be more to come next year after the long delayed auction. Watch what Bharti-Airtel does. They are the largest mobile operator in India. In a WCAI session titled: Blueprint for Success in Emerging Markets, Farid Arifuddin, Managing Director, Vavasi stated his company planned to deploy a true mobile broadband wireless network in India based on a proprietary technology- not mobile WiMAX or LTE. For more on WiMAX in India:

http://viodi.com/2008/10/24/wimax-and-3g-in-india-delayed-again/

In answer to a query I had on true mobile WiMAX in India, here is a comment by Amitabh on November 28, 2008:

“The frequency auctions and Policy will permit Mobile WiMAX. However it is a question of how far the industry is ready. The past deployments are not necessarily a pointer as the Certification of profiles and availability of equipment is very recent. “

We conclude the jury is still out on true WiMAX mobility for India

http://www.wimax360.com/profiles/blogs/mobile-wimax-spotlight-on

—————————————————————————————
Predictions for the number of mobile WiMAX subscribers

In a WCAI session titled: Anywhere Network Synergies in the Evolution toward the 4G Technology Ecosystem, Berge Ayvazian, Chief Strategy Officer, Yankee Group asked how many true mobile WiMAX users there’d be by 2012. One audience member called out "ZERO!" Mo Shakouri, VP Marketing for Alvarion said the number would be somewhere between 0 and 100M. Berge later told me privately he expected no more than 30M mobile WiMAX subscribers by 2012.

What do you think the number will be and what countries will support true mobile WiMAX vs fixed line or nomadic configurations?