Wednesday, July 17, 2019

Next Gen Central Office (NGCO) puts x86 servers at the core

In this episode of our NGCO series, Alex Quach, Vice President and General Manager of Intel's Wireline and Core Networks Division, talks about how telcos are reinventing the central office architecture to take advantage of server economics.

A "2019 Next-Generation Central Office Report" from AvidThink is available for download. It covers the evolution in NGCO, recent trends, and key projects like CORD and VCO, as well as the role of the NGCO in new applications in edge computing and SD-WAN/vCPE.

AT&T to move most non-network workloads to public cloud by 2024

Microsoft and AT&T announced an extensive, multiyear alliance under which Microsoft will be the preferred cloud provider for non-network applications. Specifically, AT&T will provide much of its workforce with Microsoft 365, and plans to migrate non-network infrastructure applications to the Microsoft Azure cloud platform.

AT&T said the alliance is part of its broader public cloud first strategy to consolidate data center infrastructure and operations. AT&T is becoming a “public cloud first” company by migrating most non-network workloads to the public cloud by 2024.

“AT&T and Microsoft are among the most committed companies to fostering technology that serves people,” said John Donovan, CEO, AT&T Communications. “By working together on common efforts around 5G, the cloud, and AI, we will accelerate the speed of innovation and impact for our customers and our communities.”

“AT&T is at the forefront of defining how advances in technology, including 5G and edge computing, will transform every aspect of work and life,” said Satya Nadella, CEO, Microsoft. “The world’s leading companies run on our cloud, and we are delighted that AT&T chose Microsoft to accelerate its innovation. Together, we will apply the power of Azure and Microsoft 365 to transform the way AT&T’s workforce collaborates and to shape the future of media and communications for people everywhere.”

In addition, Microsoft will tap into the innovation AT&T is offering on its 5G network, including to design, test, and build edge-computing capabilities. With edge computing and a lower-latency 5G connection enabled through AT&T’s geographically dispersed network infrastructure, devices can process data closer to where decisions are made. Recently, Microsoft and AT&T worked together to test an edge computing-based tracking and detection system for drones. With more connected devices and the growing demand for streaming content from movies to games, businesses and consumers require ever-increasing network capabilities.

Dell'Oro: Coherent DWDM market to hit $16B by 2023

Driven by 200+ Gbps wavelength shipments, the coherent DWDM revenue is forecast to reach $16 billion by 2023, according to Dell’Oro Group.

“The 100 Gbps growth cycle is behind us,” said Jimmy Yu, Vice President at Dell’Oro Group. “This doesn’t mean that coherent 100 Gbps wavelengths are no longer needed. It is just that with new 60 Gbaud and soon to be released 90 Gbaud based line cards, the reach of 200 Gbps and 400 Gbps coherent signals can reach much further and help service providers lower their cost-per-bit. Which we consider excellent reasons to choose 200+ Gbps wavelengths. So, we are predicting 100 Gbps wavelength shipments to decline during the next five years while 200+ Gbps wavelength shipments grow at a 50 percent compounded annual growth rate (CAGR),” continued Yu.

Additional highlights from the Optical Transport 5-Year Forecast Report:

  • The total WDM market comprising metro and long haul systems is forecast to grow at a 5 percent CAGR. WDM Metro will slightly outpace DWDM Long Haul growth during the forecast period.
  • Disaggregated WDM systems are projected to exceed $3 billion in revenue by 2023.
  • 200 Gbps wavelengths are forecast to comprise the highest share of shipments in three years.
  • 800 Gbps wavelength shipments are projected to begin ramping in 2020.

Ericsson gets a boost from 5G in North America and NE Asia

Driven by 5G growth in Networks in North America and North-East Asia, Ericsson reported Q2 sales of SEK 54.8 billion, up 10% from the same period in 2018 and up 7% YoY when adjusted for comparable units and currency.  GAAP net income for the quarter was SEK 1,705 million ($180.4 million) or SEK 0.51 (5 cents) per share against net loss of SEK 1,885 million or loss of SEK 0.58 per share in the prior-year quarter. Gross margin improved to 36.6% compared to 34.8% a year earlier.

The company reported strong uptake for its 5G Radio and Core solutions and said it is confident in reaching its 2020 and 2022 financial projections.

Börje Ekholm, President and CEO of Ericsson, stated " 5G momentum is increasing. Initially, 5G will be a capacity enhancer in metropolitan areas. However, over time, new exciting innovations for 5G will come with IoT use cases, leveraging the speed, latency and security 5G can provide. This provides opportunities for our customers to capture new revenues as they provide additional benefits to consumers and businesses."

Some additional highlights:

  • Networks recorded organic sales growth of 11% YoY. This was driven by 4G and 5G investments in North America and North East Asia as well as increased volumes related to strategic contracts. 
  • Ericsson recently announced plans to open a 5G production site in the US to ensure that it will meet customer requirements for fast and agile deliveries.
  • In Digital Services, the company continues to execute on the plan to reach low single-digit margins for 2020. Organic sales in Digital Services were down by -3% YoY as a result of rapid decline in legacy products. Gross margin was 37.1% (42.6%). The decline in gross margin was mainly driven by a change in sales mix. The mix may vary between quarters. Our 5G and Cloud native portfolio is gaining customer traction and we are increasing related R&D investments to ensure portfolio readiness. The reshaped BSS strategy is gaining momentum and contracts were signed with several new customers in the quarter. The share of recurrent business is increasing and the company is tracking towards having 75% of the 45 critical and non-strategic contracts addressed by year-end and we have cost efficiency programs in place throughout Digital Services. 
  • In Managed Services the strategy is to enhance the customer offering by relying more on automation, machine learning and AI, which will longer-term change and improve the margin profile of the business. Near-term margins are negatively impacted by the increase in R&D investments. Organic sales declined by -6%, mainly explained by the negative effect from the customer contract reviews. Gross margin declined to 12.3% (14.0%) YoY, negatively impacted by timing of costs.

Deutsche Telekom kicks off 5G rollout

Deutsche Telekom has kicked off its 5G rollout in Germany and expects to have 300 5G antennas in more than 100 locations online by the end of the year.

The first six German cities with 5G include Berlin, Bonn, Darmstadt, Hamburg, Leipzig, and Munich. In the upcoming 18 months, the 20 largest cities in Germany will all be connected with 5G.

"We punched our ticket for a 5G future with the spectrum auction. Our goal now is to get 5G to the streets, to our customers, as quickly as possible. Nearly three-quarters of our antenna locations in Germany are connected with optical fiber – we're now building on that," says Dirk Wössner, Member of the Board of Management, Deutsche Telekom, and Managing Director, Telekom Deutschland GmbH. "Our teams are working hard in every area. Whether we're talking about the network, rate plans, or devices and applications – we're speeding up to get 5G started this year. At the same time, we need a clear regulatory framework and pragmatism from the authorities – particularly when it comes to questions regarding regional spectrum, local roaming, allocation of the auction proceeds, and the approval procedures – which takes far too long in Germany."

In parallel, Deutsche Telekom is working on 5G campus networks, together with industrial users. In this approach, the network build-out follows the specific needs of business customers. "We're already working on the 5G network with Osram and automotive supplier ZF," says Claudia Nemat, Deutsche Telekom Board Member, Technology and Innovation. "Whether mobility concepts in cities, manufacturing in the industry of tomorrow, or virtual reality in the entertainment sector is involved: 5G is the key. And the industry can count on us as a partner in the 5G rollout."

Deutsche Telekom begins pilot 5G rollout in Berlin

Deutsche Telekom has activated its first six cells with commercial 5G antennas in the heart of Berlin and thereby achieved the first 5G data connection in a live network in Europe.

The Deutsche Telekom 5G cluster covers an area of up to five kilometers wide in Berlin's Mitte and Schöneberg districts for test operations. The antennas, in three cells located in Leipziger Straße and three in Winterfeldtstraße, are based on the 5G New Radio (5G NR) specs. The antennas are using frequencies in the 3.7 GHz spectrum band under a testing license. The 5G equipment is integrated into the live network infrastructure, meaning it is interacting with Deutsche Telekom's 4G spectrum in Germany.

DT's plan is to install an additional 70 cells by the summer across a total of more than 20 sites.

DT is using commercial 5G equipment from Huawei, as well as software and terminals, based on the 3rd-Generation Partnership Project (3GPP) standard for 5G New Radio (in the non-standalone version).

"We're continuing on our strong preparation course for the rollout of 5G in 2020," noted Claudia Nemat, Deutsche Telekom Board member for Technology and Innovation. "Today, right in the heart of Berlin, we're taking the next decisive step – with the successful integration of commercial 5G technology into our network. We want to ensure that 5G is going to deliver on its promise of enhanced mobility, high speed and low latency."

Crown Castle raises its financial outlook

Crown Castle reported Q2 site rental revenues of $1,238 billion, up 6% from $1,169 billion for the same period a year earlier.

Crown Castle owns, operates and leases more than 40,000 cell towers and approximately 75,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market.

"We delivered terrific results in the second quarter that exceeded our expectations and reflect the strong demand for our unmatched portfolio of towers, small cells and fiber assets," stated Jay Brown, Crown Castle’s Chief Executive Officer.  "We believe our ability to offer towers, small cells and fiber solutions, which are all integral components of communications networks and are shared among multiple tenants, provides us the best opportunity to generate significant growth while delivering high returns for our shareholders.  We remain excited about our ability to continue to generate attractive growth and returns for our shareholders as we remain focused on delivering dividend per share growth of 7% to 8% per year.

"We entered 2019 with momentum building on the tower side of the business, and I am excited that we are experiencing even higher levels of tower activity than we expected, which is driving an increase to our full year 2019 Outlook.  Our current tower leasing activity is our highest in more than a decade, and we believe this level of activity will carry into next year.  Additionally, we are constructing small cells for our customers as they invest in their current networks while beginning 5G deployments.  The significant increase in small cell deployments is straining the response time of municipalities and utilities, resulting in longer construction timelines than we previously experienced.  These pressures are most acute in several top markets where we are seeing the highest volume of activity.  Due to the elongated construction timelines, we now expect to deploy approximately 10,000 small cells in 2019, which is at the low end of our prior expected range of 10,000 to 15,000, but approximately 30% more than what we delivered last year.  We expect the increase in tower activity, offset by longer small cell timelines, to generate higher expected AFFO per share growth of 8% for 2019, up from our prior Outlook of 7% growth and at the high end of our long-term growth target."

ADTRAN reports Q2 sales of $156.4 million, up 22% yoy

ADTRAN reported preliminary revenue of $156.4 million for Q2 2019, compared to $128.0 million for the second quarter of 2018. Net income is estimated to be $5.1 million compared to a net loss of $7.7 million for the second quarter of 2018. Earnings per share, assuming dilution, is estimated to be $0.11 compared to a loss per share of $0.16 for the second quarter of 2018. Non-GAAP net income is estimated to be $6.9 million compared to a net loss of $4.6 million for the second quarter of 2018. Non-GAAP earnings per share, assuming dilution, is estimated to be $0.14 compared to a loss per share of $0.10 for the second quarter of 2018.

ADTRAN Chairman and Chief Executive Officer Tom Stanton stated, “We are pleased with our continued progress and solid performance for the second quarter of 2019. Revenue for the quarter grew 22% year-over-year and 9% over the previous quarter. Our execution continues to be strong across North America, LATAM, EMEA, and the Pacific Rim with diverse and well-balanced material revenue contributions from each of these regions. This sustained progress underscores the Company’s global impact as we help our customers build their best networks.”

ADTRAN's Board of Directors also declared a cash dividend for the second quarter of 2019 of $0.09 per common share to be paid to holders of record at the close of business on August 1, 2019.

8x8 acquires Singapore's Wavecell for CPaaS

8x8, which now claims over 1 million users for its cloud-based voice, video, chat and contact center solutions, has acquired privately-held Wavecell Pte. Ltd., a Singapore-based global Communications Platform-as-a-Service (CPaaS) provider. The purchase price was approximately USD $125 million in cash and stock.

Founded in 2010, Wavecell offers a CPaaS solution including a cloud-first API platform with SMS, chat apps, video interaction and voice APIs that enable mission-critical enterprise applications such as Application-to-Person (A2P) messaging, omnichannel customer journeys and multi-factor authentication at scale.

8x8 said the acquisition provides it with an established technology platform and high-growth revenue business to pursue CPaaS globally and represents a natural expansion of 8x8’s cloud business from Unified Communications-as-a-Service (UCaaS), Contact Center-as-a-Service (CCaaS), and Video into the CPaaS market.

“We are delighted to become part of 8x8, one of the world’s leading cloud communications platforms. Now is the right time to leverage the global expansion of UCaaS, CCaaS and CPaaS services to better serve our customers’ growing demand for communication services and to continually drive greater innovation”

Now Available: 2019 Next-Gen Central Office (NGCO) Resource Site and Report

Now Available: 2019 Next-Gen Central Office Resource Site and Report

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In conjunction with our partner Converge! Network Digest, AvidThink is pleased to announce our new Next-Generation Infrastructure coverage series. To kick off this series, we’ve launched the Next-Generation Central Office (NGCO) resource site, which includes our most recent research report on this hot topic.
With the assistance of Converge!, a respected industry newsletter that has an illustrious 20-year history in technology infrastructure, we are providing technology readers with perspectives and insights from industry leaders like IntelRed HatNokiaEricssonBroadcomNTT Limited, open-source bodies such as the Cloud Native Computing Foundation (Linux Foundation) and innovative companies such as Ethernity Networks. We’ll be rotating in new content periodically from thought leaders, as well as our sponsors and partners, so keep your eye on the site as we bring you the latest insights into NGCO.
The Next-Generation Central Office is a key element of next-generation infrastructure, playing a key role in roll-outs of 5G, and hosting key virtualized resources for initiatives like SD-WAN and vCPE. These NGCOs that also include cable MSO headends, are brains of a service provider’s (SP) nervous system and they are evolving into something resembling small cloud data centers (sometimes terms as micro-data centers). In each of these NGCOs, legacy fixed-function hardware devices that previously dominated telco infrastructure are replaced by virtual servers, software-defined networks (SDN), and network function virtualization (NFV)-enabled services. As SPs prepare for an onslaught of high-speed devices and bandwidth-hogging content, they face the limits of inflexible, hardware-based centralization and the need to redistribute workloads to be near the demand. The NGCO is a unique location that paves the way.
Our new report covers the following aspects of the NGCO:
  • Market Overview: The Move to Edge Computing
  • The Edge Computing Renaissance with a Halo of Cloud Computing
  • The Changing Carrier Infrastructure Landscape
  • NGCO Characteristics and Technologies
  • Hardware Components and Design including Network Acceleration
  • NGCO Software Foundations, including OPNFV/VCO and CORD
  • Benefits of NGCOs
  • Recommendations and Next Steps for Providers and Enterprises
As well, you can expect coverage of other key trends in next-generation infrastructure over the course of the next few months. In the meantime, we invite you to download our latest report on NGCO from the site and learn about our views on NGCO.
NGCO-Next-Generation-Central-Office-2019-Download Report-Button