Thursday, May 2, 2019

Portugal's ONI Telecom picks Nokia 1830 Photonic Service Demarcation

ONI Telecom of Portugal will deploy the Nokia 1830 Photonic Service Demarcation (PSD) to provide 10G dedicated links to customers in key Portuguese cities.

The Nokia 1830 PSD is a universal Ethernet and Wavelength service demarcation device that extends the optical network through to the customer premises.  Based on a new MEF 3.0 standard, the Nokia 1830 PSD provides both Wavelength and Ethernet services in a low-power, small-footprint device.

Nokia said its solution will enable ONI to manage and monitor its entire transport network, end-to-end. It effectively extends ONI's optical domain management system, the Nokia NFM-T, across the entire network, up to and including the 1830 PSD at the customer premises.

Paulo Teixeira, from Engineering and Planning of ONI Telecom, said: "With this device, Nokia is helping us to provide cost-effective and guaranteed 10G wavelength services to our enterprise customers in key metro markets. With the growing importance of public-private cloud deployments, we are especially pleased to be able to offer our customers dedicated optical links with full-service assurance to their premises."

Miguel Ara├║jo, CT Head of Portugal at Nokia, said: "The 1830 PSD is an exciting addition to our optical networking solution set. Paired with the Nokia NFM-T optical manager, it provides a unique solution for dedicated optical links, especially useful for enterprise wavelength services and datacenter interconnect. We have been very pleased to work closely with ONI Telecom as they deploy this world-leading 10G wavelength service to their customers."

FCC offers incentives to rural carriers for faster broadband

The FCC’s Wireline Competition Bureau extended offers of broadband subsidies to 516 rural “rate-of-return” companies in 46 states through a predictable cost model, rather than the current legacy system, which dates to the era of voice-only service. The action could result in over 1 million rural homes getting faster broadband service.

The FCC voted to make this offer in December.

To get the subsidies, the rural carriers would be required to deploy broadband on a defined schedule over the next decade at speeds of at least 25 Mbps download/3 Mbps upload to homes and businesses fully funded by the model.  If all carriers opt in to the offer, they will be required to deploy 25/3 Mbps broadband to at least 1,126,082 homes and businesses. 

The FCC also noted that its action will increase the obligation to deploy high-speed broadband even for those carriers that do not accept the offer of model-based support.  Under prior rules, legacy carriers were only required to deploy 10/1 Mbps broadband to 115,441 locations; they were not required to deploy 25/3 Mbps broadband to any locations.  As a result of the Commission’s December vote, the Bureau has increased those obligations so that legacy carriers will be required to deploy 25/3 Mbps broadband to at least 600,535 locations.

Rate-of-return carriers receive approximately $2.4 billion each year of the FCC’s $4.794 billion in universal service support for rural broadband, and of that, the 262 companies that have already elected A-CAM support get approximately $607 million per year.  Carriers currently receiving legacy support have 45 days to opt in to today’s A-CAM offer.

Arista reports strong Q1, warns that cloud titan spending tightens

Arista Networks posted revenue of $595.4 million for its first quarter ended March 31, 2019, essentially flat compared to the fourth quarter of 2018, and an increase of 26% from the first quarter of 2018. GAAP gross margin was 63.9%, compared to GAAP gross margin of 62.9% in the fourth quarter of 2018 and 64.1% in the first quarter of 2018. GAAP net income amounted to $201.0 million, or $2.47 per diluted share, compared to GAAP net income of $144.5 million, or $1.79 per diluted share in the first quarter of 2018. Non-GAAP net income was $187.7 million, or $2.31 per diluted share, compared to non-GAAP net income of $134.1 million, or $1.66 per diluted share in the first quarter of 2018.

"Arista's Q1 results demonstrate our consistent execution and profitability despite the seasonality of the quarter. We are witnessing the deployment of cloud principles into new enterprise markets,” stated Jayshree Ullal, Arista President and CEO.

The cloud titan segment was once again Arista's largest vertical in Q1.
International sales amounted to 26%.

Regarding its Q2 guidance, Arista said it expects slower growth than its normal pattern:

  • Revenue between $600 million and $610 million;
  • Non-GAAP gross margin between 64% to 65%, and
  • Non-GAAP operating margin of approximately 36%

On a conference call, Arista executives said the massive spending by cloud titans in 2018 has led to a period of absorption in the first half of 2019. Specifically, one of Arista's hyperscale cloud titan customers has placed most orders on hold for Q2. Company executives said the sudden slowdown in orders from this cloud titan occurred in mid-March. Weaker spending by other cloud titans is also expected in Q2. The Service Provider segment is also lackluster. Meanwhile, enterprise sales momentum is healthy.

Arista’s board of directors also authorized a $1.0 billion stock repurchase program.

Acacia's revenue leaps to $105M, up 44% yoy

Acacia Communications posted Q1 2019 revenue of $105.2 million, up 44% year-over-year. GAAP gross margin was 47.4%. GAAP net income was $7.0 million and non-GAAP net income was $15.4 million.

“I am pleased with our strong first quarter results, which exceeded the high end of our guidance on revenue, non-GAAP gross margin, non-GAAP net income and non-GAAP diluted EPS,” said Raj Shanmugaraj, President and Chief Executive Officer of Acacia Communications. “Our continued investment in industry leading coherent technologies has helped us develop a broad portfolio of products that address the needs of network operators from edge to submarine networks. We believe we are well positioned to benefit from the adoption of coherent technologies in shorter-reach pluggable interfaces.

NeoPhotonics posts revenue of $79.4 million

NeoPhotonics reported Q1 2019 revenue of $79.4 million, down 13% quarter-over-quarter and up 16% year-over-year. Gross margin was 19.8%, down from 24.8% in the prior quarter. Non-GAAP diluted net loss per share was $0.19, down from net income per share of $0.05 in the prior quarter

“NeoPhotonics delivered strong year over year growth in our seasonally low first quarter. We are focused on the highest speed coherent solutions that are well-aligned with leading industry trends, which has positioned us to benefit from growing deployments of high baud rate systems for 200G to 600G globally,” said Tim Jenks, NeoPhotonics Chairman and CEO. “These higher bandwidth systems accentuate the unique value proposition of our ultra-narrow linewidth lasers and high performance photonic integrated chips,” concluded Mr. Jenks.

Netscout posts revenue of $235M, beating preliminary estimates

Netscout Systems reported revenue of $235.0 million for its fourth quarter and full fiscal year 2019 ended March 31, 2019, compared with $235.2 million in the same quarter one year ago. Non-GAAP total revenue for the fourth quarter of fiscal year 2019 was $235.2 million versus $238.5 million in the same quarter one year ago. Fourth-quarter non-GAAP revenue in fiscal year 2018 included $10.7 million attributable to the handheld network test (HNT) tools business that was divested in mid-September 2018.

Product revenue (GAAP and non-GAAP) for the fourth quarter of fiscal year 2019 was $125.5 million, which was approximately 53% of total revenue.

Service revenue (GAAP) for the fourth quarter of fiscal year 2019 was $109.5 million, or approximately 47% of total revenue versus service revenue (GAAP) of $113.0 million, or approximately 48% of total revenue, for the same period one year ago.

“Our fourth-quarter fiscal year 2019 performance was fundamentally consistent with the preliminary results that we announced last month,” stated Anil Singhal, NETSCOUT’s president and CEO. “Our fourth-quarter revenue was lower than planned primarily due to delayed revenue recognition on a large service assurance project at an international mobile operator. Nevertheless, we produced a good quarter in our enterprise customer segment with solid organic expansion due to strong growth in our DDoS product area and relatively stable results in the service assurance product area. Our operating profitability was driven by strong gross margins due in part to higher software sales and lower operating expenses, with EPS exceeding our preliminary estimate due to a lower-than-anticipated tax rate.”

NETSCOUT trims quarterly outlook citing delayed project

NETSCOUT SYSTEMS announced preliminary financial results for its fourth quarter and fiscal year ended March 31, 2019 below previous guidance.

The company now expects 4Q FY2019 revenue to be approximately $15 million lower than originally anticipated, primarily due to delayed revenue recognition on a large service assurance project at an international mobile operator. However, NETSCOUT anticipates a solid quarterly GAAP and non-GAAP EPS performance due to healthy gross margins resulting from a more favorable product mix and lower operating costs.

Anil Singhal, NETSCOUT’s president and CEO, stated, “Our fourth-quarter fiscal year 2019 revenue shortfall was primarily caused by a longer-than-expected implementation schedule for the largest phase of a $15 million project at an international mobile operator, which delayed revenue recognition. Nevertheless, we expect that the revenue associated with this phase of our customer’s project will be recognized within the next several quarters. Despite this delay, we produced another quarter of solid top-line results in our enterprise customer segment and experienced a relatively strong performance in our security product area. Healthy gross margins aided by good adoption of our software-centric offerings and cost controls throughout the year played important roles in our ability to successfully achieve our prior EPS guidance.”

Zain now serves 50 million customers in Middle East & Africa

Zain Group, which delivers mobile services in eight markets across the Middle East and Africa, reached the 50 million customer milestone as of the end of Q1 2019, reflecting a 6% increase year-on-year (Y-o-Y).

Zain Group generated consolidated revenues of KD 404 million (USD 1.33 billion) for the first quarter of 2019, up 56% compared to the same period in 2018. EBITDA for the quarter reached KD 178 million (USD 586 million), up 111% Y-o-Y, reflecting an EBITDA margin of 44%. Net income for the quarter reached KD 47 million (USD 155 million), up 15% Y-o-Y reflecting Earnings Per Share of 11 Fils (USD 0.04). 

Group data revenue experienced a 118% growth in Q1 2019, representing 37% of the Group’s total revenue. It should be noted that the data growth is predominantly due to the consolidation of Zain KSA results.
The three-month period was further highlighted by the notable 77% increase in net income in Zain Iraq; healthy net profit growth of 11% by Zain Kuwait and 55% by Zain Bahrain; with Zain Sudan continuing to perform exceptionally well in all key financial indicators in local SDG currency terms.

Commenting on the results, Chairman of the Board of Directors of Zain Group, Mr. Ahmed Al Tahous said, “The impressive first quarter 2019 results were achieved through the Board’s and Executive Management’s focus on implementation of the digital transformation strategy that has seen substantial investments in network upgrades, fiber optics and 5G readiness. These initiatives have been aimed at diversifying income sources primarily from digital-related areas and at the same time improve customer experience. We will continue driving cost optimization initiatives to improve the efficiency of the operations and seek new lucrative opportunities in driving the business forward and increasing shareholder value.”

Kuwait: Maintaining its market leadership, the flagship operation of Zain Group saw its customer base serve 2.6 million in a very challenging period that witnessed improving net profit for the quarter. Revenue generated for the quarter reached KD 82 million (USD 271 million), and net income increased 11% to reach KD 21 million (USD 70 million). Zain Kuwait’s EBITDA amounted to KD 32 million (USD 105 million), a 21% increase Y-o-Y, with EBITDA margin standing at 39% for the quarter. Data revenue grew by 9% Y-o-Y, representing 38% of total revenue. 

Saudi Arabia: Despite the fierce competition present in the Saudi telecom market, the operation’s ongoing transformation has resulted in Zain KSA having recorded net profit for the last three consecutive quarters with revenue growing quarter-on-quarter. For Q1 2019, Zain KSA recorded revenue of SAR 2.1 billion (USD 559 million), a 24% increase to the same period in 2018. EBITDA for the quarter amounted to SAR 955 million (USD 255 million), up 67% from SAR 571 million (USD 152 million) in Q1 18. The operator’s EBITDA margin for Q1 2019 stood at 46%. Net income for Q1 2019 reached a healthy SAR 129 million (USD 34 million); a marked improvement on the loss of SAR 77 million (USD 21 million) recorded for Q1 2018. Impressively, data revenue represents 44% of total revenue. 

Iraq: Zain Iraq performed exceptionally well in Q1 2019 when compared to the corresponding three-month period in 2018, with revenue reaching USD 262 million, and EBITDA having reached USD 109 million, up 13% Y-o-Y and reflecting an EBITDA margin of 42%. The operation reported a net profit of USD 14.2 million, up 77% on the USD 8 million profit recorded in Q1 2018. The operator added 1.5 million customers (up 10% Y-o-Y) to reach 16 million and witnessed significant growth in data revenue, as well as profitable progress in the enterprise (B2B) segment. 

Sudan: In local currency (SDG) terms, the operator continues to perform well, as revenue grew by 50% Y-o-Y to reach SDG 3.1 billion (USD 66 million, down 23% in USD terms) for Q1 2019. EBITDA increased by 54% to reach SDG 1.2 billion (USD 26 million, down 21% in USD terms), reflecting an EBITDA margin of 39%, while net income increased by 67% to reach SDG 509 million (USD 11 million, down 22% in USD terms). Data revenue formed 18% of total revenue, with an impressive growth of 63% (Y-o-Y) in SDG terms. Zain Sudan now serves 15.1 million customers, reflecting a 9% growth compared to Q1 ‘18. 

Jordan: Zain Jordan serves a customer base of 3.7 million customers as at the end of Q1 2019, maintaining its market leadership. Revenue reached USD 117 million, with EBITDA increasing 18% to USD 56 million, reflecting an EBITDA margin of 48%. Net income was relatively stable increasing 1% to USD 18 million. With the continual expansion of 4G services across the country, data revenue grew by 2% Y-o-Y, and now represents 40% of total revenue. 

Bahrain: During Q1 2019, Zain Bahrain generated revenue of USD 41 million. EBITDA for the period increased 48% to USD 15 million, reflecting an EBITDA margin of 35%, while net income increased 55% to USD 5 million. The operation’s focus on new, attractive packages coupled with a totally revamped 4G network resulted in data revenue representing 47% of overall revenue.