SDN Special: AT&T, Cisco, Google, Rift.io - Telco 2.0 News Review
- AT&T: AT&T: SDN is paying off already as CAPEX drops
- US Carriers: Son tried to sell Sprint to Comcast; Bell launches tri-band; VZ tests 10Gbps
- Cloud & SDN: Cisco Q2; Rift.io; how Google SDN works; Rackspace's AWS as a service; robot opens data centre
- Valley Roundup: Let me Alphabet that for you; Skype for Business for iOS; hedgies flee Alibaba, Baidu
- Smartphone Roundup: HTC "worth less than its cash"; Lenovo struggles in Q2; new Samsung flip phone!
- European Carriers: Orange.es ups prices; OFCOM OKs BT-EE on one condition. Well, two. VodaFixed.
- Global Carriers: Three Indian prospects for Nokia; Niel's MyRepublic hits Australia; SingTel Q2; Telstra FY15
- Content 2.0: Apple TV on hold over price; DTAG ditches exclusive content; BT ups sport pricing
- Security & Privacy: Oracle CSO gaffe; P2P networks as a weapon; dodgy cars; fixing Stagefright
AT&T: SDN is paying off already via faster sales cycles, CAPEX savings. MBB price cut. NSA surveilance.
John Donovan, AT&T's technology chief, says their SDN transition is already paying off. For example, the cycle time to set up a new managed Ethernet link under their Network on Demand product is down 95%, to an average of 3 days for customers where no wiring work was needed and, perhaps even more impressively, down 82% to 15 days for customers where the carrier needed to pull fibre. Very interestingly indeed, Donovan suggests that their transition to SDN is also a transition to open-source software - the 75% SDN by 2020 target goes with another target of 50% open-source by the same time.
The operator also issued CAPEX guidance, setting a target of 15% of revenue going forward. If this is going to be achieved this year, AT&T will have to spend significantly more in H2 than it has done so far; the explanation is that they intend to make a $3bn investment in the Mexican network they just bought. Ex-Mexico, they're averaging about 12%, down from a peak of nearly 20% at the height of the 4G rollout in Q4 2013. This strongly suggests that SDN (or NFV) is going to be a deflationary experience for the telecoms vendors.
Meanwhile, they're basically giving up on the U-Verse TV platform and concentrating on developing DirecTV's CPE into a box that includes satellite, "LTE backup", and "third-party broadband connections", suggesting they're hoping to use it to get into homes where a competitor's broadband is present. There's also a new backend coming, presumably to be deployed on all those SDN nodes.
LTE fixed-wireless as a backup link seems to be a thing; it's part of the $150m deal they just snagged with Marriott for managed hotel broadband, VoIP, and mobility. That must be especially satisfying, as the customer had signed up with Verizon as recently as December.
AT&T Mobility tweaked its Mobile Share Value tariffs this week, keeping a device subsidy option but adjusting the data bundles. Doing the sums, the changes add up to about a 10% per-GB price cut - but if you want a subsidised phone, you'll have to pay a $40 charge for each device that shares the data pool. Non-subsidy users stay at $25/gadget, so that's a substantial giveback. Also, despite the cut, AT&T mobile data is still about a third dearer than T-Mobile's.
And extensive details have emerged of just how closely AT&T cooperates with NSA surveillance.
Son tried to sell Sprint to Comcast; Bell launches tri-band; VZ tests 10Gbps, keeps Mercedes M2M
Here's a thing. Softbank Samurai Son selling Sprint so soon? Not quite, but it seems Son and his ex-Googler right hand, Nikesh Arora, spent part of last year hawking the operator around. Specifically, they approached Comcast CEO Brian Roberts about a mobile-cable deal, before having a go with Altice. Son says he made one of the biggest misjudgements of his life, "the misjudgment of the US regulatory environment".
Presumably he means that they didn't let him acquire T-Mobile. Arguably an even bigger misjudgment was buying Sprint in the first place, and not, say, T-Mobile. Son also has this to say about the latest effort to fix their network:
Son had a plan that was initially rejected as impossible by Sprint's equipment vendors. "They came up with hundreds of reasons why it cannot work," he said. "I said: 'OK, I will find a solution to each one of those 100 reasons of why it cannot work.' And I came up with a very logical solution to all of them." Sprint is now deploying thousands of small cells to improve coverage, costing less than a conventional network upgrade.
He's got a vision. About the network. They could call it a...Network Vision?
Aside from catastrophic network upgrade projects, Sprint is also famous for paying its executives top dollar. CEO Marcelo Claure has trousered some $22m in his first nine months, and Softbank just extended his contract until 2019. That said, it's rather less generous than the one that notoriously made Dan Hesse the best-paid man in the industry while Sprint fell behind. Most of it consists of 10 million shares of stock, and the earn-out is pretty challenging - they don't vest until the share price passes $8. It's currently $3.85.
If that happens it might even be worth keeping Sprint shares.
A couple of network strategies and CEOs, and many billions of dollars, ago, Sprint was all about tri-band LTE. That's how they were going to finally make use of all that 2.5GHz they - well, the cablecos, Google, and Intel - paid for way back when. Now, Bell Canada has actually deployed it. They're using 700, 2100, and 2600MHz together, for a theoretical maximum of 290Mbps. Being Canadians, they also say you should expect between 12 and 87Mbps in practice. Which isn't bad.
Telus wants its CEO to move to western Canada. He refused. They have a new CEO.
VZW has quietly stopped throttling down heavy 3G users, having also backed out of throttling 4G users who still have an unlimited plan. Their Telematics M2M division, meanwhile, has retained Mercedes-Benz as a customer for another five years. Note that they actually provide customer support, but the customers think they're talking to Mercedes - M2M is inherently B2B2C even when it's not just wholesale. They've also started offering free calls between VZW and their VoIP for enterprise customers who take the Wireless Connected VoIP product.
In the fixed world, Verizon has been testing the next iteration of GPON with equipment, oddly enough, from Portugal Telecom's R&D wing. This uses four different optical wavelengths to provide up to 10Gbps over 5km, and importantly, the tests demonstrated that it can interoperate with the existing GPON kit.
Frontier has announced a 10/100Mbps tier for the networks it acquired from AT&T. This is still copper, so expect that to be "up to" and restricted to short runs.
TWC says it has backhaul to 20,000 cell sites.
Cisco Q2; carrier forecasts; Rift.io; how Google SDN works; Rackspace offers AWS as a service; robot opens data centre
IHS reckons carriers will spend $5.7bn on SDN in 2019, up from $103m in 2014. It's worth noting that they draw a hard distinction between SDN and NFV, so their forecast for NFV is additional to that.
Here comes Rift.io, a startup that just exited stealth mode with $16m in funding, aiming to create a hyperscale NFV platform based entirely on open-source components. It aims to run a Red Hat-style business model based on selling support for the free code.
Cisco had a strong quarter. Net income was up 6 per cent on revenue up 4 per cent. The pick of the business was data centre gear, aka exactly where the SDN/NFV wind is expected to blow hardest. But sales were up 14%. Note that Chuck Robbins is expecting flat telco CAPEX, just like AT&T and indeed STL.
Adtran is offering a virtualised NFV implementation of its "most valued" products, apparently routers, firewalls, enterprise SBCs, and voice quality instrumentation.
PT's research arm figures in four EU 5G projects, and they look distinctly SDN-y.
Here's a fantastic High Scalability post on Google's data centre networks. Note that the sheer volumes of intra-data centre traffic are getting hilarious, as in, "bigger than the Internet". Also, data centres are physically too big and expensive to upgrade if that means building work. And the future seems to be hierarchical networks of cheap switches, physically distributed but logically centralised through SDN. There's a talk at the Open Networking Foundation conference, too.
Meanwhile, Google has two new cloud services, Cloud Dataflow and Cloud Pubsub. The first is an analytics engine for streaming data, the second is a message queue. The AWS Big Data Blog has a nice case study of doing the same sort of thing with AWS products.
IBM, meanwhile, has launched Linux for mainframes, which are a sort of cloud when you think about it.
Facebook has released more features for its OpenBMC cloud infrastructure management software, letting it take over more devices from the vendors' solutions.
Rackspace was hoping for growth in Q2, but it didn't happen. Now they're offering Amazon Web Services as a service, like they already do for MS Azure. They're also doubling-down, joining an Intel-led initiative to support the development of OpenStack.
About 100MW of wholesale data centre capacity has been sold in the US so far this year.
And Switch's latest monster DC has opened. The ribbon was cut by a robot, but the interesting detail is that it's not actually any bigger than the last one they opened.
Let me Alphabet that for you; Skype for Business for iOS; hedgies flee Alibaba, Baidu; Valley fibre slasher strikes again
Google has surprised everyone by re-organising into a holding company, Alphabet, run by the founders and controlling things like robots, solar Internet balloons, schemes to extend human life, etc, and Google, run by Sundar Pichai and controlling things like...Google. The org chart looks like this (from here):
It's just missing an arrow pointing to the little "Ads" box, saying "This is where all the money comes from". (Horace says something similar.) Also, Google Ventures and Google Capital seem to do much the same thing. That said, it's going to be interesting to see what Google's financial reporting looks like with the magic Internet glasses and space balloons stripped out.
Meanwhile, back at the ranch, Android gets support for the new Khronos Vulkan API for direct 3D graphics rendering.
Microsoft is previewing the Skype for Business apps for Android and iOS. Sysadmins could nominate up to four of their users on each OS to get the app free, up to the 14th of August.
Hedge funds have been dumping Alibaba and Baidu stock in large quantities. That said, Ben Evans is trying to reassure everyone about the prospect of a tech bubble: US technology startup fundings are at about half the level of 2000.
Facebook says it has more app developers in India than anywhere else.
And the FBI is now investigating at least 12 deliberate fibre cuts around the Bay Area. Unlike most mad axemen, the fibre slasher of Silicon Valley can at least claim that they never hurt anyone.
HTC "worth less than its cash"; Lenovo struggles in Q2; new Samsung flip phone!
HTC is making 15% of its employees redundant and trying to diversify out of smartphones. Smartwatches. VR headsets. Something, anything, except competing with Apple. Cher Wang issued the following statement, surely balm to the souls of the 15%:
"HTC is an inspirational company driven by innovative people, with a unique blend of expertise in hardware and software integration, advanced technology and world-class design," said Wang. "Now, as we diversify beyond smartphones, we need a flexible and dynamic organization to ensure we can take advantage of all of the exciting opportunities in the connected lifestyle space. This strategic realignment of our business will ensure that each product group has the right focus, the right resources and the right expertise to win new markets."
Right. Bloomberg Businessweek reports that the shares plummeted last week to the point where the company is valued at less than its cash at the bank, that is, its value is negative. That's especially worrying as 34 per cent of its assets consist of either stocks of phones, or worse still, accounts receivable from the carriers.
Lenovo reported Q2 pre-tax income down 80% year-on-year and operating profits down 67%, although revenue was up 3%. As a result, they intend to cut 3,200 jobs as soon as possible. They're going to drop the non-Motorola smartphone lines and focus entirely on Moto Mobility, although they're losing jobs too.
Samsung announced a new, bigger version of the S6 Edge, this time powered by a Qualcomm Snapdragon 801 rather than an Exynos. They also launched Samsung Pay, their Apple Pay-like service. There was also a surprise: a dual-display, 3.9" flip phone harking back to the mid-2000s era of form factor experimentation. You've got to be Chinese if you want one.
Apple Pay, for its part, seems to be struggling to get user adoption because a lot of iPhone 6 users don't really understand what's meant to be so great about it.
Smartphone shipments in India are up 44% year-on-year, 19% sequentially.
And the only growth in tablets is coming from 2-in-1 gadgets like Lenovo Yogas and Microsoft Surfaces.
Orange.es puts up prices; OFCOM OK with BT-EE..on one condition. Well, two. VodaFixed is here. VMED WiFi
Orange Spain is calling the turn - it's going to put up prices at the end of September, with two common plans going up by €2/mo. On the other hand, the data bundles increase by 500MB. Meanwhile, there's some debate whether Italian or European regulators will accept the Three Italia/Wind deal - it's pointed out that Three is the only operator there to add subscribers recently.
OFCOM says it's willing to accept the BT-EE deal, but it will impose conditions. Notably, it wants regulated access to dark fibre, like it says in its submission to the wider Communications Market Review. It's also concerned, however, that the other MNOs are tied into long-term contracts with BT Wholesale, while BT could choose to waive the contractual restrictions for EE. The irony; mobile operators complaining that they're stuck in a long contract.
That said, the regulator also said that the European decision on Hutch-O2 would influence its decision - if they get the green light to create O3, OFCOM might block BT/EE. But then, the Eurocrats haven't actually decided if they care yet.
Vodafone UK's fixed broadband service is here, although for the moment this isn't a FTTH rollout but rather another ISP running over BT Openreach FTTC.
O2 UK CEO Ronan Dunne thinks there's something wrong with the UK market if DTAG, Orange, and Telefonica are all sellers.
Virgin Media has thawed out its plan to put public WiFi hotspots in its street cabinets, which has been in the freezer for a few years now. Apparently we should expect a WiFi-centric announcement in a few weeks.
The UK government is boasting about hitting its broadband target. If you read last week's news you'll know this is pure spin. It's working so well farmers are building their own towers to get 4G and run cable to their homes. Interestingly, though, BT is handing back £129m of the money, risk underwriting it didn't eventually need.
The oddball 1.4GHz spectrum Qualcomm owns in the UK has been sold to Vodafone and 3UK, after the EU decided it could be used for mobile downlink after all.
Simwood is not happy about OFCOM.
Three Indian prospects for Nokia; Niel's MyRepublic hits Australia; SingTel Q2; Telstra FY15
Indian operators Uninor, Vodafone, and Idea Cellular are all in talks with Nokia Networks about their forthcoming 4G rollouts. Nokia is pushing its SingleRAN solution and also trying to get them interested in VoLTE, after they snagged Bharti Airtel's 1800MHz 4G build.
Singtel reported a decent Q2, with net profits up 13% year-on-year although revenue was down 1%. Singaporean and Aussie 4G data was the main moving factor.
Xavier Niel's MyRepublic is expanding from Singapore, into Australia, where it intends to offer 100Mbps FTTH for about $60/mo where the NBN is actually fibre. They also intend to badger the NBN Co to build out more FTTH. Break out the popcorn; Niel vs. Aussies sounds like great TV.
Telstra reported full-year profits up 1.2% and EBITDA down 2%, although that would be 6.6% and 4.5% respectively stripping out the effects of selling CSL New World. Also, the joint venture with Telkom Indonesia has started selling their cloud services in the country. CAPEX guidance is 15% of revenue. (Have we heard that somewhere?)
New Telco 2.0 in-depth coverage of Telstra's cloud business is out now. Get it here
Oi's Q2 revenues were off 3% and EBITDA came rattling down, 20.3% year-on-year, as the company extricated itself from the whole mess around PTel.
And the WACS cable around West Africa has been upgraded by Huawei to 100Gbps capacity.
Apple TV on hold over price; DTAG ditches exclusive content; BT ups sport pricing
Apple's TV service might not launch this autumn after all. Apparently the launch of the new Apple TV hardware is still going ahead, and it's pencilled in for the 9th of September. The new service, though, is held up by the negotiations between Apple and the TV networks, especially CBS and Fox. Price is said to be the issue.
DTAG is selling up its content portfolio - both InteractiveMedia and the t-online.de websites have been sold to German advertising firm Ströer for €300m in shares. They aren't giving up, but rather concentrating on aggregation rather than own content.
BT has quietly added a £5/mo charge for part of its BT Sport package. OFCOM ordered them to give customers a month to decide whether to eat it or downgrade to the Sport Lite option.
Dan Rayburn argues that HEVC users should refuse to pay the patent pool a penny.
Oracle CSO gaffe; P2P networks as a weapon; dodgy cars; fixing Stagefright
Oracle's chief security officer blogged that their customers should stop trying to find or report security issues, because they know best, and that's what it says in the licence agreement. It went down about as well as you might expect.
Here's a way of using BitTorrent and similar P2P networks as a massive distributed denial of service cannon. It's good luck it's only been discovered now, not five years ago when everyone used them and the potential mayhem was that much worse.
A wide range of cars have a serious security flaw in the wireless key. Volkswagen sued the discoverer. 42% of British car thefts now use the flaw.
Google has updated Hangouts to provide protection against Stagefright. But the fix for Android itself turns out to be flawed.
14 Microsoft security bulletins for five dozen bugs. It must be Patch Tuesday.
And here's an effort to fix IoT security.