Print Friendly, PDF & Email

Huawei captured 28 percent share of the telecom equipment market, increasing its market share by 4 percentage points since 2015.

We just wrapped up the 3Q 2018 reporting period for all the Telecommunications Infrastructure programs.

For the first nine months of 2018, the top five equipment manufacturers were Huawei, Nokia, Ericsson, Cisco, and ZTE. Combined these five companies accounted for about 75% of the worldwide service provider equipment market revenue.

Additional key takeaways from the reports period include:

  • The overall telecom equipment market declined 2 percent year-over-year for the 1Q 2018 through 3Q18 period. Robust demand for Optical Transport and Microwave Transmission equipment was not enough to offset declining Core and Service Provider Router revenues.
  • Huawei’s revenue share continued to improve in 2018—up around four percentage points between 2015 and the first nine months of 2018. During this period, Ericsson’s and Nokia’s market share declined one and three percentage points, respectively.
  • Huawei’s telecom equipment revenue is nearly as large as Nokia and Ericsson combined.
  • Huawei’s revenue share gains over the past four years have been most pronounced in the Core, Router, and Optical Transport Markets.

Dell’Oro Group telecommunication infrastructure research programs consist of the following: Broadband Access, Carrier IP Telephony, Microwave Transmission & Mobile Backhaul, Mobile Radio Access Network, Optical Transport, Router & Carrier Ethernet Switch, Telecom Capex, Wide Area IoT, and Wireless Packet Core.

Print Friendly, PDF & Email

On December 6th, Adtran announced that it had acquired broadband and virtual customer premises equipment (CPE) supplier SmartRG for an undisclosed sum. The move provides Adtran with an infusion of tier 2 and 3 customers in the Americas, along with a line of broadband CPE hardware running the gamut from ADSL2+ to GPON to DOCSIS.

More importantly, SmartRG gives Adtran a comprehensive and well-regarded SDN and NFV platform for the delivery of vCPE functions that can be integrated into Adtran’s Mosaic SD-Access platform. With SmartRG’s SmartOS, Adtran can now extend its microservices architecture from the access network all the way into the home, something that rival Calix has been touting via its Gigaspire series of CPE and EXOS SDN architecture.

For Adtran, the acquisition was a necessary move to keep pace with its chief broadband access rival in North America.

The addition of SmartRG is also reflective of the need tier 2 and tier 3 operators have for remote and software-defined provisioning, monitoring, and troubleshooting of broadband CPE and home networking devices in an age of growing interest in IoT. These smaller, often rural operators, absolutely require solutions that will both reduce their overall operating costs while also positioning them to increase top-line broadband revenue through the addition of new services, including managed WiFi and home automation services.

If you take a look at SmartRG’s customer base and where the company has excelled to date, it is among tier 3 RLECs, co-ops, and ISPs who service areas where the average truck roll could be 2x-3x the cost of a truck roll for an operator in a more urban area. These are the operators who provide an immediate business case for remote provisioning of residential CPE. For them, there is simply no room to send a truck whenever a client has connectivity issues. If 80% of those issues can be diagnosed from the main office, then that dramatically improves the margin profile for these operators’ broadband services.

Remote provisioning and troubleshooting is where SmartRG cut its teeth.

SmartRG was spun out of ClearAccess, a provider of TR-069 software, when the company was acquired by Cisco in 2012. At the time, Cisco was one of the leading suppliers of broadband CPE, particularly to cable operators. Cisco had acquired Scientific-Atlanta back in 2005 and Linksys in 2003. Cable operators around the world were in the process of moving to a TR-069-based architecture for managing their increasingly complex DOCSIS gateways and EMTAs. TR-069 would allow MSOs to offer self-installation and remote provisioning of CPE for new and existing subscribers, thereby eliminating the need to roll a truck for each new customer.

Meanwhile, SmartRG had combined its existing hardware design along with the knowledge of how to deliver TR-069-based architectures to address the needs of smaller ISPs in the North American market, where it found considerable traction.

Flash forward to today, where the tenets and efficiency goals of TR-069 have been encapsulated and reborn as a small part of the overarching NFV and vCPE concepts. When combined with its Mosaic-based SD-Access solution, Adtran can now provide its customers with visibility from the access network all the way into the home, regardless the physical WAN interface. If a customer is experiencing connectivity issues, the service provider can diagnose whether the underlying problem is a fiber cut, interference, or routing table issue in the access network, or whether it is due to channel interference, the addition of a new peripheral, or a DHCP issue in the home or small office. Again, diagnosing and troubleshooting these issues without needing to roll a truck is a critically important money-saving feature all broadband providers, both small and large, are demanding for their networks.

Print Friendly, PDF & Email

Last week, I attended Extreme NOW Forum 2018, Extreme Networks’ customer and partner conference in San Jose California, the first in a series of events to be held around the world—more than 50. What impressed me was how familiar the senior staff were with individual customers. This clearly was not the first time interacting.

A few items caught my attention:

  • Senior staff knew many of the customers by name and there was a joviality and friendliness indicative of familiar relationships. Clearly the priority is on tight customer relationships, and this is coming from the top.
  • Software application development consumes over 95% of research and development spend—led by customer requests and use cases.
  • Two use cases amused me:
    • The first one was a large retail customer which deployed security cameras throughout its stores—monitoring theft was not its primary purpose! Instead the shop managers used technology to identify facial patterns—sadness or happiness. If a shopper was sad, an assistant would be immediately dispatched to offer help.
    • The second use case was a firm in the education sector which used security cameras in the classroom—not to just monitor cheating, but whether or not students were falling asleep during lectures. This monitoring allowed management to evaluate professor performance.

Certainly Extreme has its work cut out to harmonize the technologies and operations of its recent acquisitions, but its steadfast connection with its customers creates a lasting loyalty.

Print Friendly, PDF & Email

Below is a shortened version of some RAN related key takeaways from Huawei’s Mobile Broadband Backhaul (MBB) event, Ericsson’s Capital Market Day, and Nokia Global Analyst Forum. For access to the full blog, please contact Daisy@delloro.com

Forecasts are being adjusted upward

Based on some of the findings below, revised vendor projections, and the fact that the market recovery has become broader and stronger (RAN revenues accelerated at the fastest pace in 3Q18 since 2014), it is increasingly likely we will adjust total RAN (2G+3G+4G+5G) and 5G NR projections upward in conjunction with the January 5-Year RAN Forecast Report.

5G MBB business case is clear

With mobile data traffic still growing at an unabated pace—per Ericsson’s latest Mobility Report, mobile data traffic increased close to 79% YoY in 3Q18, recording the strongest growth since 2013—one of the overarching themes from multiple analyst events is that the 5G NR eMBB business case is obvious. Even the more conservative operators are now on board with regard to the 5G business case for eMBB applications—no one is asking anymore whether there is a business case for using more spectrum and utilizing it more efficiently.

5G MBB momentum is accelerating

Not only is 5G ready sooner than anyone expected, the momentum is still accelerating. In addition to the early adopters in Australia, China, Japan, Korea, U.S., and the Nordic countries, there are multiple signs that even the larger European carriers are planning to deploy 5G NR at a faster pace than originally envisioned. And with the trials in China being so large already, the Chinese operators will be able to accelerate commercial deployments rapidly when they are given the green light.

To be clear, 5G NR for MBB is materializing at a faster pace than most everyone expected. At the same time, 5G for Critical IoT / Ultra-Reliable Low Latency Communications (URLLC) is progressing in line with or at a slower pace than initial expectations.

Mid-band to drive MBB, mmW is on the rise

C-band and the 2.6 band are emerging as the global mid-bands.

Millimeter wave (mmW) technology has gone through different phases, with the general industry sentiment shifting from being very optimistic about 5G mmW four to five years ago, followed by increased skepticism and dampened projections for a couple of years, and now in 2018 it appears that the expectations for mmW are rising again. We also adjusted our mmW projections upward in conjunction with the July 5-year forecast update. There is a confluence of factors behind the renewed mmW optimism…

The business case for mid-band Massive MIMO is improving

Deploying 5G NR in the mid-band spectrum using the existing macro grid will yield the best ROI for operators seeking to increase the capacity and improve the average speeds for MBB applications. Given the different…

FWA RAN is growing—but still small relative to total RAN

With more than 200 networks worldwide using LTE to connect the unconnected, Huawei estimates about…

People are needed to deploy the equipment

While AI and automation will play an important role in managing the increased site complexity, a human being still has to climb the tower and install the equipment. According to Ericsson

Excitement for IoT is growing

Massive IoT (mMTC) is driving the lion’s share of the IoT market today. But there is excitement forming over the Critical IoT (URLLC) use case which includes Industry 4.0. Vendors are forming partnerships and creating special BUs to prepare for this opportunity.

While there is no shortage of IoT and URLLC skeptics, vendors and operators are excited about the fact that the industry is moving from talking about various use cases to solving real problems. Nokia recently announced that it is working with ABB to demonstrate how URLLC can help to clear faults quickly for medium-voltage distribution networks. The leading suppliers are teaming up with operators and car manufacturers to carry out C-V2X demonstrations. The list of course goes on—Ericsson estimates there are more than…

Build it and they will come

This was a phrase Huawei used during its MBB summit, and since we agree with the general concept we thought it is appropriate to reuse. The underlying premise here is that we have now talked about the various 5G use cases for some time. And as much fun as it is to use Excel and PowerPoint to model the business cases for the unknown IoT use cases that are nearly impossible to predict, the technology is now ready and the time has come for action. Just like the operators are able to use their LTE MBB networks to minimize and justify the investments for NB-IoT and LTE-M, operators can leverage their NR MBB networks to minimize URLLC investments. One of the challenges with the URLLC networks is…

RAN product announcements to accelerate rapidly in 2019

There is no one-size-fits-all solution. On the contrary, the sites are getting more complicated because they not only need to support the new 5G NR systems, but they also need to coexist with existing legacy base stations. The C-band spectrum will vary by country. Site and load requirements will also vary depending on the country, but in general it is safe to assume that operators will need more capacity, wider bandwidth radios, smaller form factors, lighter products, and more energy efficient systems. Based on various announcements, the accelerating shift toward 5G, and the fact that the existing macro site will yield the best ROI, it is safe to conclude that RAN product announcements will accelerate at an explosive pace in 2019:

  • During Huawei‘s MBB Summit, the vendor announced a massive number of new products, spanning across its entire RAN portfolio, aimed at giving customers the capacity and RF performance they need while at the same time addressing the site challenges discussed above.
  • Ericsson announced during its capital market day that it is planning to introduce more than 100 radio products in 2019—that is not a typo, more than 100 radios.
  • Nokia’s ReefShark chipset remains on track for the Massive MIMO antennas, digital front ends, and the baseband resulting in smaller antennas, improved power and cost optimization, and flexible baseband.
Print Friendly, PDF & Email

NBASE-T technology is significantly impacting the market with the biggest transition we’ve seen in campus switching since 2000.

That’s a bold statement backed up by data and trends we’ve noted in our extensive research in the campus network market. With the new generation of 802.11ax access points supporting NBASE-T ports, this trend will only accelerate. At Dell’Oro Group, we predict a major refresh of the Ethernet Switch Campus market as 802.11ax shipments ramp up, taking NBASE-T to 20 percent of campus switch ports by 2022.  This transition will enable enterprises to transform their networks, support new high bandwidth devices, and provide the “always on” network experience expected today.

One clear example of this growth is in the education market. One administrator we spoke with said they are seeing big differences in their freshman class use even from one year to the next. Each incoming class is taking a step up. They use to plan their network needs based on 3 devices per student, and that has jumped to 5 devices per student in just the past couple years. Devices like Amazon Alexa and gaming devices have become even more prolific, and the number of users has also jumped from 10K to 22K in that same timeframe.

Members of the Dell’Oro Group team including Tam Dell’Oro, Ritesh Patel and myself, recently discussed these findings in a webinar with Peter Jones of the NBASE-T AllianceNBASE-T Campus Network Market Update from Dell’Oro Group includes significant data points, price trends and discussion on the mix between 2.5GE/5GE. Decision makers can use this information to inform their strategic infrastructure plans and purchases.

Dell’Oro Group reports provide more in depth findings on Campus Networks – Wired and Wireless reportEthernet Switch – Campus report, and Wireless LAN report.

We see 802.11ax driving the continual growth and expansion of NBASE-T adoption in a vast range of markets. From the high end to the low end of the market, there is a broader range of product offerings happening in a shorter time frame than with most previous technologies. Across the industry, NBASE-T technology is clearly powering a major inflection point in campus networking.