Thursday, July 21, 2022

Ericsson aims for 5G monetization with $6 billion acquisition of Vonage

Ericsson completed its previously-announced acquisition of Vonage Holdings Corp.  

The deal provides Ericsson with a platform for offering a full suite of communications solutions including, Communications Platform as a Service (CPaaS), UCaaS and CCaaS.

Ericsson said it aims to transform the way advanced 5G network capabilities are exposed, consumed and paid for. This will provide the global developer community, including Vonage’s more than one million registered developers, with easy access to 4G and 5G network capabilities via open Application Program Interfaces (APIs).

For communications service providers (CSPs), global network APIs - such as location and quality of service APIs - provide new opportunities to expand their profit pools to monetize 5G network capabilities. For Ericsson, global APIs provide a new material growth opportunity. The existing market for communications APIs – such as video, voice and SMS – is currently growing at 30 percent annually and projected to reach USD 22 billion by 2025.

Ericsson intends to increase R&D investments and offer these solutions to CSPs.

Börje Ekholm, President and CEO, says: “We are excited to welcome Vonage as part of Ericsson. With Vonage’s suite of communications solutions – UCaaS, CCaaS and Communications APIs – Ericsson will further expand its offerings into the enterprise space. In the future, network capabilities will be consumed and paid for through open network APIs, creating the opportunity for unparalleled innovation. We have already launched the first network API, Dynamic End-user Boost, based on existing 4G infrastructure. With Vonage, we will now develop and commercialize these new APIs.  We are already seeing great progress with frontrunner CSPs, and we aim to launch the first 5G network APIs in the coming year. We will continue to create new, enhanced applications and services for enterprises, while driving continued innovation on Vonage’s UCaaS and CCaaS applications, helping businesses create new digital experiences for better communications, connections and engagement.

Rory Read, Vonage CEO, says: “Vonage was born out of innovation and is today a global leader in business cloud communications. This partnership will strengthen our offerings to businesses across the globe by leveraging Ericsson’s leadership in 5G, global market presence and strong R&D capabilities. With the demand for UCaaS, CCaaS and Communications APIs growing rapidly, the combined expertise, talent and innovation is good news for our customers and partners.”

Some additional notes:

  • Ericsson paid for the acquisition with cash on hand.
  • The transaction is expected to be accretive to Ericsson’s EPS (excluding non-cash amortization impacts) and free cash flow before Mergers & Acquisitions (M&As) from 2024 onwards.
  • Vonage will become a separate business area within the Ericsson Group - called Business Area Global Communications Platform (BGCP). Rory Read, current CEO of Vonage, is appointed Senior Vice President and Head of Business Area Global Communications Platform and a member of Ericsson’s Executive Team.
  • Vonage will continue to operate under its existing name and brand being part of the Ericsson Group.

Ericsson to acquire Vonage for its cloud communications platform

Ericsson agreed to acquire Vonage, one of the earliest developers of a commercial VoIP service, for US$6.2 billion in cash.

Vonage traces its roots to 1998 when Jeff Pulver established as a VoIP exchange. In 2001, the company changed its name to Vonage and launched a commercial VoIP services aimed at consumers. Vonage went public in 2006. Vonage is headquartered in Holmdel, New Jersey and has 2,200 employees throughout the United States, EMEA and APAC.

Currently, the cloud-based Vonage Communications Platform (VCP) serves over 120,000 customers and more than one million registered developers globally. The API platform within VCP allows developers to embed high quality communications - including messaging, voice and video - into applications and products, without back-end infrastructure or interfaces. Vonage also provides Unified Communications as a Service (UCaaS) and Contact Center as a Service (CCaaS) solutions as part of the Vonage Communications Platform.

Sales were US$1.4 billion in the 12-month period to 30 September 2021, and over the same period, Vonage delivered an adjusted EBITDA margin of 14% and free cash flow of US$109 million.

VCP accounts for approximately 80% of Vonage’s current revenues and delivered revenue growth in excess of 20% in the three-year period to 2020, with adjusted EBITDA margins moving from -19% in 2018 to break-even in the 12-month period to 30 September 2021. Vonage’s management team projects annual growth of over 20% for VCP in the coming years.

Ericsson completes Cradlepoint acquisition

Ericsson completed its previously-announced acquisition of Cradlepoint for approximately US$1 billion.Cradlepoint will operate as a stand-alone subsidiary within Ericsson and continue to build on the current market momentum as 5G is speeding up digital transformation and increasing the need for advanced connectivity services for enterprises. Cradlepoint will be part of Ericsson’s Business Area Technologies & New Businesses.Ericsson acquires Cradlepoint...

Cisco intros Webex Wholesale for Service Providers

Cisco launched a new Webex Wholesale Route-to-Market (RTM) for Service Provider. 

The new sales model includes a single commercial agreement with each partner and a self-service platform for Service Providers to deliver managed services for Webex, as well as the agility, scalability and flexibility to create their own co-branded offers.

The Wholesale partner program features consumption-based billing with fixed, predictable per-user/per-month package pricing and equips Service Providers with several invoicing options. The partner onboarding experience includes dedicated Cisco experts, paired with comprehensive online training and a robust set of migration and marketing toolkits to drive market demand and serve SMB customers.

Initial managed services packages for Webex that are available through the Wholesale RTM include:

  • Webex Calling: Enterprise-grade calling and advanced collaboration with features for 1:1 and group messaging, file-sharing, and secure basic video conferencing for up to 100 users, for a complete PBX replacement, including multi-device support, visual voicemail, intelligent call routing and more.
  • Common Area Calling: Calling built for shared use and common area locations and phones.
  • Webex Meetings: A premium meeting and messaging experience with meetings allowing up to 1000 users. Also includes AI-driven intelligence with Webex Assistant, Slido, remote desktop control, moderator controls and more.
  • Webex Suite: Encompasses all the above with premium calling, messaging and meetings, plus advanced features that are engaging and inclusive.

"By tapping into the brand power of respected Service Providers and combining it with our inclusive Webex technology, rapid innovation, and complete collaboration portfolio, we are creating winning partnerships that address the communication needs of small and medium-sized businesses and help them thrive in a hybrid work world," said Jeetu Patel, Cisco EVP and GM, Security & Collaboration.

Nokia's Q2 net sales increased 3% yoy in constant currency

Nokia reported Q2 net sales of EUR 5,873 billion, up 11% year over year in absolute terms and up 3% yoy when accounting for constant currency. Gross margin was 40.2%. EPS was 0.08.

Some highlights:

  • Network Infrastructure net sales grew 12% in constant currency, with growth across all four businesses.
  • Mobile Networks returned to growth despite ongoing supply chain constraints.
  • Cloud and Network Services net sales were flat in constant currency. 
  • Nokia Technologies declined 25% as it continued to be impacted by expired licenses that are in the process of being renewed.

Pekka Lundmark, Nokia's president and CEO, states: "While we recognize the increased global macroeconomic uncertainty and currency fluctuations impacting some emerging markets, I am confident we have the right strategy in place to navigate these challenges along with support from structural technology adoption trends in 5G and fiber. However, we will not become complacent; we remain focused on building technology leadership and improving cost-efficiency to deliver on our strategic goals for the years ahead."

"We have had a strong first half and with our renewed competitiveness, we are well placed to deliver our full year 2022 guidance. There remain risks around timing of Nokia Technologies’ contract renewals, potential COVID-19 lockdowns and the supply chain which remains challenging but is showing signs of improvement. We are currently tracking towards the higher-end of our net sales guidance and towards the mid-point of our operating margin guidance as we manage ongoing inflation and currency headwinds."

AT&T chases growth in 5G and fiber

AT&T reported Q2 revenues from continuing operations of $29.6 billion versus $35.7 billion in the year-ago quarter, down 17.1% reflecting the impact of the U.S. Video separation in Q3 2021 and certain other divested businesses. Excluding the impact of these divestitures, operating revenues for standalone AT&T were up 2.2%, from $29.0 billion in the year-ago quarter.

AT&T said its results were driven by higher Mobility revenues and, to a lesser extent, higher Mexico and Consumer Wireline revenues, partially offset by lower Business Wireline revenues.  

“We’re expanding our customer base at an accelerated pace across our twin engines of growth – 5G and fiber,” said John Stankey, AT&T CEO. “We’re rapidly building out our best-in-class networks on the heels of record-level connectivity investment. We’ve already added nearly 2 million AT&T Fiber locations this year and just reached our target of covering 70 million people with mid-band 5G spectrum two quarters early, with expectations to now approach the 100 million mark by the end of year.”

On the investor conference call, AT&T also disclosed that more customers are falling behind in monthly payments.

Some additional highlights:


  • Revenues were up 5.2% year over year, to $19.9 billion due to higher service and equipment revenues. Service revenues were $15.0 billion, up 4.6% year over year, primarily driven by subscriber growth. Equipment revenues were $4.9 billion, up 7.2% year over year, driven by increased sales of higher priced smartphones.
  • Operating expenses were $13.7 billion, up 6.1% year over year due to higher equipment costs, network costs, bad debt expense, amortization of customer acquisition costs, HBO Max content costs, FirstNet 
  • Total net adds were 6.6 million
  • Postpaid churn was 0.93% versus 0.87% in the year-ago quarter.
  • Postpaid phone churn was 0.75% versus 0.69% in the year-ago quarter.
  • Postpaid phone-only ARPU was $54.81, up 1.1% versus the year-ago quarter, due to improved international roaming and a mix shift to higher-priced unlimited plans.
  • FirstNet connections reached approximately 3.7 million across more than 21,800 agencies. 

Business Wireline

  • Revenues were $5.6 billion, down 7.6% year over year due to lower demand for legacy voice and data services, a strategic decision to deemphasize non-core services and lower revenues from the government sector. 
  • Operating expenses were $4.9 billion, down 2.0% year over year due to ongoing operational cost efficiencies and lower amortization of deferred fulfillment costs, partially offset by higher wholesale network access costs and higher depreciation expense. 

Consumer Wireline

  • Revenues were $3.2 billion, up 1.1% year over year due to gains in broadband more than offsetting declines in legacy voice and data services and other services. Broadband revenues increased 5.6% due to fiber growth of nearly 28%, partially offset by non-fiber revenue declines of 9.8%.
  • Total broadband losses, excluding DSL, were 25,000, reflecting AT&T Fiber net adds of 316,000, more than offset by losses in non-fiber services. AT&T Fiber now has the ability to serve 18 million customer locations, and offers symmetrical speeds up to 5-Gigs across parts of its entire footprint of more than 100 metro areas.

SK Telecom activates bare-metal 5G Core with Ericsson

SK Telecom has activated a bare-metal cloud-native 5G core network, using Ericsson 5G Core and Cloud Native Infrastructure (CNIS).

SKT's cloud-native 5G core is expected to improve traffic processing significantly compared to existing physical-based cores by applying packet acceleration processing, route optimization, and multi-flow control for ultra-high-speed and large-capacity 5G services.

The companies have been developing and verifying the cloud-native solution in stages since 2019, and since November of last year, they have been testing a full-scale 5G network for commercial service, where the Ericsson’s dual-mode 5G Core is deployed on the Kubernetes over bare metal infrastructure solution Ericsson Cloud Native Infrastructure (CNIS).

Park Jong-kwan, VP, Head of  Infra Tech, says, "Based on the commercialization of the cloud-native-based 5G core, we have laid the foundation to provide cutting-edge ICT services more efficiently and stably. We will continue to develop and apply the next-generation network technology that will become this”.

Monica Zethzon, Head of Solution Area Packet Core at Ericsson says, “With the bare-metal cloud-native 5G Core solution, SKT is reconfirming its ambitions to lead the way in creating a future-focused, versatile 5G network. The efficiency and performance gains to the 5G Core network that comes from this new Cloud Native Infrastructure will be a strong foundation for innovative use cases and new services for enterprises and consumers.  We are proud to continue our long-standing partnership with SKT, together supporting the innovative ecosystem of technology-driven businesses.”

Samsung's 2nd gen SmartSSD computational drive offloads CPU

Samsung Electronics introduced a second generation of its pioneering SmartSSD computational storage drive that uses a Xilinx Versal Adaptive chip to offload certain data processing functionality from the host CPU.

Unlike existing SSDs, Samsung’s SmartSSD can process data directly, thereby minimizing data transfers between the CPU, GPU and RAM. This technology can avoid the bottlenecks that often occur when moving data between storage devices and CPUs, resulting in markedly improved system performance and much higher energy efficiency.

 Samsung says that compared to conventional data center solid-state drives, processing time for scan-heavy database queries can be slashed by over 50%, energy consumption by up to 70% and CPU utilization by up to 97%.

Since its development in 2020 through the joint efforts of Samsung and AMD, the first-generation SmartSSD is being supplied to global IT companies including video communications platform providers. The first-generation SmartSSD was recognized as an Innovation Awards Honoree at CES 2021 for its outstanding performance and energy efficiency.

 “Commercialization of the first-generation SmartSSD, in collaboration with AMD, established that the computational storage market has great potential,” said Jin-Hyeok Choi, Executive Vice President and Head of Memory Solution Product & Development at Samsung Electronics. “With the upgraded processing functionality of the second-generation SmartSSD, Samsung will be able to easily address increasing customer needs in the database and video transcoding sectors, as we expand the boundaries of the next-generation storage market.”

 “Powered by Xilinx Versal Adaptive SoCs from AMD, second-generation Samsung SmartSSDs enable improved CPU efficiency and greatly reduced energy consumption by efficiently integrating the computing and storage functions in data centers,” said Sina Soltani, Corporate Vice President of Sales, AECG, Data Center and Communication Group at AMD. “As data-intensive applications continue to grow, second-generation Samsung SmartSSDs will deliver the superior performance and efficiency required for this expanding market.”

ZEDEDA raises $26 million for edge orchestration

ZEDEDA, a start-up based in San Jose, California, raised $26 million in Series B funding for its edge orchestration solution.

ZEDEDA provides a unified orchestration experience across hardware, software, networks and cloud that delivers visibility, control and security. The company says revenue is up 7x year-over-year, while at the same time, its number of nodes under management has risen by 4x. 

The funding round attracted a range of new and existing investors — including Coast Range Capital, Lux Capital, Energize Ventures, Almaz Capital, Porsche Ventures, Chevron Technology Ventures, Juniper Networks, Rockwell Automation, Samsung Next and EDF North America Ventures. ZEDEDA has now raised more than $55 million since its inception in 2016.

“All aspects of our business — from a growing base of Global 500 customers to major strategic partnerships and growth in deployed edge nodes — are on a terrific path,” said Said Ouissal, founder and CEO of ZEDEDA. “This latest round of investment validates that our open framework and ecosystem approach to the distributed edge is the ideal choice for the future of connected operations.”

Quantifi Photonics raises $15M for optical test systems

Quantifi Photonics, a start-up based in Auckland, New Zealand, announced US$15 million in Series C funding for its solutions for the high-density photonic test market.

Quantifi Photonics plans to offer fully integrated test systems for optical transceivers, silicon photonics and co-packaged optical devices that are emerging from R&D labs onto high-volume production lines. At this year's OFC, the company released a 288-channel optical power meter. Quantifi Photonics plans to grow its R&D and manufacturing teams and expand its sales and customer support capabilities in the USA and Europe to capitalize on the significant growth in optical communication networks around the world.

Intel Capital, the venture capital arm of Intel Corporation, led the round which was fully supported by existing investors.

"Intel Capital's investment will help us carry out our strategy and seize the market for the high-value test instruments required to support the rapidly growing transceiver market, which is projected to exceed US $14B by the year 2026," said Dr. Andy Stevens, CEO and co-founder of Quantifi Photonics.

"Silicon photonics is a key technique in the future of the semiconductor and telecommunications industries, especially with the increasing bandwidth requirements for data center and 5G/6G applications," said Sean Doyle, Managing Director at Intel Capital. "The Quantifi Photonics team has the potential to supply critical test and measurement solutions to the market at large."

"By working extremely closely with customers such as Intel, we understand their challenges and can begin to anticipate what they might need in 6, 12 or 24 months' time. As a result, we're rapidly developing a new generation of high-density test solutions that are critical to unlocking the potential of 800G technologies," says Dr. Stevens.