Vendor M&As: revenues seem healthy

Last week, Google announced it would buy Motorola Mobility. Will there be more big deals between troubled telecom vendors and deep-pocketed players in adjacent sectors? Probably. The ever-growing strength of Chinese vendors and weak macroeconomy have raised all sorts of M&A speculation. Telecom vendors’ 2Q11 results, though, suggest that, at the very least, the sky is not falling. Mobile device revenue growth was very strong – up well over 40% from the year-ago quarter. Network infrastructure revenues also grew, up 7% for the quarter and up 10% for the first half. That’s consistent with Ovum’s projection for 2011 capex. But M&A is in the tech sector’s DNA and will continue to change the industry. Like evolution, it is unpredictable, messy, and lumpy, but it often produces sensible results in the long term. The road to 2020 will be a hard one for many telecom vendors. In late 2009, Ovum published a series of reports mapping out a vision of telecom’s likely evolution through 2020. One of those reports focused on the supply side: “Telecoms in 2020: Network Infrastructure”. Currently, for non-Chinese vendors, we are in the first stage on the road to 2020: full-service vendors are focused on cost efficiency and continue to downsize, outsource, and integrate operations. The pressure is high on middle-tier vendors such as Tellabs and Juniper, but there is plenty of room for specialized vendors (e.g. Tekelec, ADVA, Arris, Acme Packet), even if a weak venture capital market temporarily limits the flow of new players. The competitive landscape faced by vendors is being shaped by many forces, including: the financial crisis and need for cutbacks; the further rise of the Chinese vendors; the increased reliance on chips and components for competitive, timely offerings; the urge to enter new markets and acquire intellectual property through M&A and VC investments; and the introduction of new technology and standards simultaneous with improvements in the last generation (e.g. LTE vs. HSPA+, FTTH PON vs. VDSL). In short, it’s not an easy time to be a vendor. Growth and profits are difficult to achieve.Matt Walker/Ovum | August 23, 2011 Specialize in xDSL filter/Splitter, Cables & IT relative accessories Original Article right here

New VDSL Subscribers to Quadruple by 2014

New subscribers to very-high-bitrate digital subscriber line (VDSL) service are set to nearly quadruple by 2014 as more competitors begin to ramp up their support for the technology, according to new IHS iSuppli research. The number of new annual VDSL subscriber additions will grow to 60.1 million in 2014, up from just 15.6 million in 2009. A total of 23.3 million new VDSL subscribers were added in 2010. “The telco broadband market is undergoing a seismic shift,” said Lee Ratliff, senior analyst for broadband and digital home at IHS. “Newer technologies such as VDSL and fiber-to-the-home (FTTH) have begun to emerge, while interest is waning within the industry for traditional broadband technologies like cable and asymmetric digital subscriber line (ADSL).” Meanwhile, consumers also are willing to adopt the latest technology in order to get faster access to content. “As the broadband market switches from a focus on data to stressing wideband multi-service and multimedia, fatter pipes to receive content are becoming more desired,” Ratliff said. “Broadband rates of 1 to 5 megabits per second (Mbps) were adequate when people were only surfing the Internet, but peer-to-peer file sharing, online gaming, streaming audio, voice over Internet protocol (VoIP) and Internet protocol television (IPTV) now all could be operating within one home. Such heavy activity points likely to a future in which 50 to 100Mbps will be standard—which fits exactly with VDSL’s capabilities.” Ikanos Faces Increased Competition Long dominated by Ikanos Communications Inc., the VDSL semiconductor market recently has become much more competitive. While Ikanos still leads with 55 percent market share, that figure is down from 75 percent only a year ago with the trend unlikely to stop anytime soon. Lacking in intellectual property (IP) to create a single-chip gateway solution, Ikanos instead has centered its focus on advanced VDSL technology such as vectoring and bonding. Such a strategy will continue to supply the company with the most advanced technology, but without having an integration roadmap, the door also has opened for competitors Broadcom Corp. and Lantiq to grab their fair market share. Moreover, a new competitor with a history in the ADSL market, Ralink Technology Corp.—which recently acquired ADSL maker TrendChip Technologies Corp.—will soon bring a VDSL chip to the market in the first quarter of 2011. Ralink promises to bring a new level of cost competitiveness to the VDSL market, further squeezing Ikanos.Wednesday, February 23rd, 2011 Let us know if we could assist you! Here’s original Article

An overview of VDSL2 vectoring

Vectored DSL as defined in ITU-T Recommendation G.993.5 supports line speeds of greater than 100 Mbps on loops up to 500 meters in length, enabling the most advanced application services to be carried over copper. With appropriate placement of DSLAMs, use of management tools and techniques such as bonding of vectored lines and use of DQM techniques, vectored DSL becomes an important tool for network operator to provide broadband services such as IPTV to all their customers. The emergence of vectored DSL provides the DSL based service provider with the tools that facilitate supporting the bandwidths required for higher valued premium services over their existing copper based networks and helps ensure that deployment of DSL increases as broadband services continue to evolve.Broadband Forum | July 24, 2012 Specialize in xDSL filter/Splitter, Cables & IT relative accessories Original Article right here