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Capex flat, not rising, across Europe
Monday, 13 October 2014 11:49

EU investment "incentives" already failing. The latest Dell'Oro projection is that capex in Europe will be flat in 2015 despite a strong turn in EU policy in favor of the telcos. Julie Learmond-Criqui of Dell'oro emailed me  In 2015, we expect Capex in Europe will be flat." That's consistent with what the larger carriers are telling investors about their plans for the next several years. 

    I've found that the three most important factors in the level of capex are competition, new technology and direct return on investment. Policy changes rarely make much of a difference unless far more forceful than what most Western regulators would consider. The exception are policy changes that create or protect competition.  

Last Updated on Wednesday, 15 October 2014 18:40
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Let's make a deal: Verizon & AT&T looking for auction strategy
Friday, 10 October 2014 23:38

5G is comingPresident John Stankey and Verizon CFO Fran Shammo didn’t get together in an exclusive club and cut an auction deal.  They could go to jail. As a former Time Warner VP explained a while back, “We’ve become so good at signalling we don’t have to meet in airport motels anymore.” Stankey at a public conference said they would bid $10B in the 2015 auction but weren’t particularly interested in the 2014. Soon after, Shammo told Wall Street they were focusing on the 2014 auction and wouldn’t commit to even entering 2015.

   These are incredibly able executives likely to find a way to “bid rationally.” I don't see how I could prove anything without subpeona power but perhaps emerging star D.C. reporters Gautham Nagesh or Brian Fung might find a way. A remark by FCC Chair Tom Wheeler suggests he fears what I'm seeing; maybe someone at the FCC has perspective.

Last Updated on Sunday, 12 October 2014 05:53
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G.fast: Sckipio has the chips
Tuesday, 07 October 2014 01:10

Sckipio's little boxNot really a gigabit but 300-700 megabits is darn fast. Michael Weissman of Sckipio has delivered a highly integrated 4 port G.fast chip to a dozen device makers, making good on Dudi Baum's promise to have chips in 2014. He promises a CPE chip within six months and believes carriers will start deploying before the end of 2015. 

    "The interest is crazy," he tells me. Carriers that normally take a year or two to start thinking about things want to go to trials in a few months. "It's not just the European telcos," Weissman added. "We are seeing demand from Latin America, the U.S. and just about everywhere. Some want to go to advanced trials as soon as we can supply the gear." 

Last Updated on Tuesday, 07 October 2014 20:33
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Dado's $22M, Alcatel's $15M buy Ikanos time to finish chips
Monday, 29 September 2014 09:43

Provides time for node scale vectoring, G.fast. I'm very glad I don't have to write an obituary for Ikanos, home of a large team of respected engineers. $22M from Dado Banatao's Tallwood will keep Ikanos afloat, but it's the $15M Alcatel is putting in that points to a bright future.

    Alcatel remains the largest DSL vendor and has long bought from Ikanos, but many of their DSL chips have been coming from Broadcom. With 40M lines of vectored DSL on order in Europe and Australia, Alcatel wanted to make sure they had several suppliers. Ikanos has been developing a vectoring chip aimed at AT&T and other telcos that want to vector 192 ports in large cabinets. 

    Last year, I killed a story about Ikanos although I was confident it was accurate. Unfortunately, the chips they needed were taking longer than hoped. I listened to the CEO on the conference call and ran the numbers. I was convinced they were soon about to run out of money. There was a registration for a new financing but it wasn't clear whether anyone would put the money up. 

    I don't overestimate my influence but realized that if I published the article it might be the final straw for the company. I decided I didn't want to be responsible for putting 100 hardworking people out of work in a company that had earned my respect. This is not standard journalism practice but as owner I make my own choices.

Last Updated on Monday, 06 October 2014 05:56
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On privacy, "conflicting feelings" of the Internet governors
Saturday, 27 September 2014 20:05

Apple, Google & Cisco "support" privacy but Internet leaders are conflicted. "FBI Director James B. Comey sharply criticized Apple and Google on Thursday for developing forms of smartphone encryption," the Washington Post reports http://wapo.st/1qHVVtQ. I believe the FBI is fighting against a rough consensus among the IETF and Internet technical community that privacy should be protected by technical means. That includes encryption that neither the government nor the cell phone designer can crack.

    Bob Hinden, Chair of the Internet Society and a long time leader at IETF etc. sent Dave Farber's IP list an interesting note. I'm picking it up because I've heard similar from others, not to single out Hinden. 

"Dave, I admit to have conflicting feelings on this.  Part of me is happy that no one has access to the keys, but at the same I time I have some sympathy for legitimate law enforcement.  There are bad guys out there.  If I had to choose, I would pick civil liberties over law enforcement access.  With what we have learned about what the NSA is doing, I think it's time for the pendulum to swing back more towards the middle.  NSA (with the apparent support of Congress and the Administration) clearly has abused their capability to get the keys.

Bob" 

    I'm glad Bob chose to support civil liberties. Many others make different choices. Cisco, for example, is not merely very close to U.S. security agencies but played a crucial role building the Great Firewall of China. I was glad to hear Cisco support encryption recently but remain skeptical. It's almost a joke the U.S. reps on Internet security bodies including the ITU come from Cisco.

Last Updated on Monday, 06 October 2014 05:32
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China: 60M Fiber home connections 135M homes passed
Saturday, 27 September 2014 00:00

Possibly as many as the entire rest of world and soon pulling ahead. Government owned and controlled Chinese telcos are building more fiber home than the entire rest of the world the last few years. The 60M homes connected http://bit.ly/Zh6AX7 are not far from the total fiber lines in the entire rest of the world. The OECD includes most of the developed world and counted 56M homes with fiber at the beginning of 2014. There's a fair amount of fiber in places like the UAE so I'm guessing "ROW" remains slightly ahead of China. That won't be true for long.

     Dell'oro, one of the top research houses, reports "PON revenue in Q2 reached a record level, with strong growth both in China and the rest of the world." By revenue, 60% of the sales were in China, up 25% over last year. Since Chinese prices are lower, an even larger % of the ports went to the Middle Kingdom. GPON in China is taking over, with EPON sales flat. Strength in China made Huawei and ZTE the world leading vendors. 

Last Updated on Tuesday, 14 October 2014 08:46
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Deutsche Telekom, Telstra didn't know NSA had cracked them
Saturday, 11 October 2014 13:47

Sckipio's little boxPossibly using spies and black bag jobs. Update: Further Snowden documents confirmed NSA used spies in Germany & Korea. The undoubtedly excellent engineers at Deutsche Telekom couldn't find how the NSA was tapping them. "Reporters for Der Spiegel, working in collaboration with The Intercept, contacted Deutsche Telekom and NetCologne several weeks ago in order to give them an opportunity to look into the alleged security breaches themselves. The security departments of both firms say they launched intensive investigations, but failed to find any suspicious equipment or data streams leaving the network." Those NSA guys have to be really good to fool the Germans.

    We all "knew" that surveillance was everywhere, but continuing revelations from Laura Poitras & Edward Snowden remain startling. The latest report suggests heavy use of undercover agents and physical intrusion. That's what spies do, after all. England's GCHQ is deeply involved, along with the Aussies and the Canadians. 

Last Updated on Monday, 13 October 2014 22:19
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Live G.fast at Telekom Austria
Thursday, 09 October 2014 11:34

Telekom Austria A-1"A customer" on FTTB/G.fast. Peter Schiefer of TA confirms, "We are going to show G. Fast with a live customer next week on Wednesday." If it is just "a customer," Alcatel may have installed a lab test style rig with FPGA's. It could be an early Broadcom chip Alcatel is testing. Broadcom as usual is keeping mum and Alcatel is offering no details before BBWF on what they have in G.fast.

    Austria is talking a billion euro subsidy for faster broadband and just allocated the first 300M. That gives TA powerful incentive to showcase advanced capabilities. Management needs to look progressive. Carlos Slim already has three seats on the board and appears to be moving ahead with a takeover. Slim's Telmex knows how to run a low cost operation, crucial as Austria expands into Eastern Europe.

     Telekom Austria operating in Serbia still is a surprise 100 years after Franz Ferdinand. 

Last Updated on Tuesday, 14 October 2014 08:29
 
2014-2015: 230M iPhone 6
Monday, 29 September 2014 15:11

Despite worrisome low demand in France, China. Apple is looking to build 116M 6's by about the end of January and as many again in the following 12 months. That's a remarkably ambitious plan for an expensive phone. Some very good phones are appearing at half the price. The figure comes from NPD/Displaysearch and is based on projections from the companies that supply screens to Apple.  

    Apple stands alone rising above massive upheaval in mobile. The sales rankings in cellphones are shifting rapidly.  Samsung just gave a warning and previously hot Coolpad laid off 10%.Xiaomi has expanded from China to Indonesia & India and selling very well.  In India, I'm watching Micromax, Karbonn & Spice with climbing sales.  ZTE was hot, lost a lot of money, and then fell back. Blackberry was on top of the heap a few years ago, but only a huge cash hoard has kept them from bankruptcy. That Apple will continue to do well seems a safe projection, but nothing is this field is certain. That they will pull even further ahead, as these figures imply, is amazing but corresponds to much of the early data. 

   "It's still the best smartphone you can buy," the WSJ reviewer concludes. Apple fanboys please don't hate me, but I have to note the iPhone 6 may be already out of date. LTE-A is going to two & now three carrier, 250-450 megabit speeds in Spain, Germany, Singapore, UK (EE) and probably Sprint in the U.S.

Last Updated on Friday, 10 October 2014 23:11
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Canada DSL Takes 2% from cable: U.S. 2% the other way
Monday, 29 September 2014 07:51

With most of Bell & Telus upgraded, Canadian cable broadband homes almost go negative. Glen Campbell of Merrill Lynch pointed me to CRTC data http://bit.ly/1voSz5q that showed the Canadian telcos beating the cablecos, who lost 1.3% of the market in 2013.  In the U.S., the results were the opposite, with cable picking up a point or two of market share. Telcos are beating cable in Canada, Britain and France. Cable is beating telcos in Germany and the U.S..

    The largest single factor is the % of homes upgraded by the telco. A strong majority have been upgraded in Britain and Canada, but fewer in the U.S. In Germany, cable is competing by offering twice the speed at the same price, easy because DT is only now getting serious about upgrading. Mike Fries and Liberty Global/Unitymedia KabelBW prefer to raise prices than to increase market share, so we'll see how that plays out.

    The U.S. telco figures are skewed by the AT&T/Verizon decision to kill all landlines to the majority of their territory, going wireless only to 20-30% of homes. They are treating those homes like the Romans treated the Sabine women so of course many are fleeing to cable. Where they have FiOS and U-Verse, they are doing fine, but in the other territories AT&T is doing so poorly they lost a net 50,000 lines in Q2.  

Last Updated on Monday, 29 September 2014 10:11
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Aintnecessarilyso: Faster broadband yields big income increases.
Saturday, 27 September 2014 03:15

Diogenes

 

Author Erik Bohlin says his work on an income effect "was very preliminary, needed to be replicated, and are not ready to use to make a policy discussion." A quick read of the work showed it was extremely limited. So I was surprised to see an OECD paper http://bit.ly/1sBoqRB by a distinguished scholar presents as fact, "increasing broadband speeds from 4 Mbps to 8 Mbps produced an increase in household income of USD 122 per household per month, and increasing from 8 to 24 Mbps produced a significant further increase beyond that figure (Bohlin et al, 2013)." That's definitely unproven. 

   I find it highly unlikely that watching a second stream of Netflix or more rapidly making a Tinder hookup yields such a large economic payoff. Common sense would require being very skeptical about such a claim and looking closely at the data before using it. Serious scholarship has questioned whether there really is an economic payoff from broadband; in several cases, if there was a net economic payoff it was too small to measure.

     I blame myself for the OECD sloppiness because I knew the Ericsson/Bohlin work had severe limits and never got around to writing an article. The original work was funded by Ericsson, maker of broadband equipment, another red flag. I am carefully not claiming Bohlin distorted his findings in return for Ericsson's money. In a follow-up with me, Bohlin and co-author Ibrahim Kholilul Rohman have been sensible about the limits of their work.

Last Updated on Monday, 06 October 2014 05:53
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BT Faking it on G.fast
Thursday, 25 September 2014 14:43

200-600 meg pretty fast so why hype? British Telecom, despite the BBC and other news reports, did not attain a gigabit with G.fast. They merely showed that 104 MHz over a protected standard copper line could reach speeds of 786 megabits down 19 meters, something obvious for years from the basic engineering. The substance of G.fast is significant so the hype is unneeded.

BT's results were not for G.fast. G.fast is a 300 page specification that BT/Huawei didn't even pretend to support. Many features, such as reverse power, are important and were not implemented. Vectoring in G.fast remains totally unproven and will be crucial to any deployment. Several features of G.fast are likely to reduce the speed. The effect may be relatively modest but we won't know until they are tested.

Last Updated on Friday, 10 October 2014 13:48
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