Archive for May, 2007
State of the Photon - Global FTTH Activity
I haven’t been shy about my prediction that GE-PON would trump GPON deployments and so far I’ve been right. The dominance of GE-PON continues, with large deployments planned or underway throughout Asia. Verizon (VZ) is the only carrier deploying BPON/GPON in size though some activity is promised in Europe. We shall see.
Let’s take a quick look at the state of the photon.
Five Misconceptions About the 10G Optical Market
I’ve noticed a common trend during conversations with investors and analysts about the state of the optics market. People seem to be staking their hopes on 10G as the growth driver for the industry. I firmly believe this is true, but people are assuming the gains will be evenly distributed among all players. Here are the common misconceptions:
Sprint: Cable vs. Private Equity
The market has allowed Comcast (CMCSA) the luxury of waiting to take out Sprint (S ). But the recent purchase of Alltel has increased outside interest in Sprint, as investors anticipate the company crossing over the event horizon of the private equity black hole. This sets up an interesting situation, as the strategic value of this asset to Cablecos could exceed the private valuations attached to it.
Cablecos need an independent wireless company to partner with as their voice deployments become commoditized. I argue that Sprint is vital to the long term survival of the Cablecos (see “Someone Tell the Cablecos Fixed Line is Dead“). Brian Roberts, CEO of Comcast, is on the record saying he has no interest in Sprint. But what the hell would you expect him to say? “Yes, we need an independent wireless carrier like Sprint to survive and hope to buy it one day!”.
Comcast or a consortium of Cablecos needs to move now in order to avoid having more bidders at the table.
Author is long Sprint and short Comcast
No president could spend money like Ronald Reagan could spend money. His greatest legacy, in fact, was spending so much on defense projects like his “Star Wars” anti-missile system that the USSR was torn apart economically by simply trying to compete, thus ending the Cold War.
Reagan could have worked at Google.
If you burn a heretic pundit, should you pay for carbon offset? Or is the hot air saving alone a net environmental benefit?
Anthony Townsend, research director at the Institute for the Future (Fox News Article) :
(Municipal WiFi Networks) are the monorails of this decade: the wrong technology, totally overpromised and completely undelivered
Looks like one of my ‘07 predictions is coming true….
Intel on AMD’s Barcelona: "Too Little Too Late"
Pat Gelsinger, Senior VP/GM of Intel’s (INTC) Digital Enterprise group (i.e. CPUs), keynoted the JPMorgan Technology Investment conference yesterday, and as ususal, the really interesting bits were in the Q&A.
I’ll be at the JPMorgan Tech Conference here in Boston on Monday and Tuesday. If you’re there too drop an email and say hello.
FTTH vs. VDSL in France
Anyone who visits France can see that the French love infrastructure. A long time reader pointed me towards an interesting presentation on the status of FTTH in France. I believe such an endeavor is well suited to the French love of building.
OECD Broadband Stats ‘Clarified’
The OECD statistics are the weapon broadband pundits cite in order to bludgeon folks into believing the USA is a broadband backwater, trailing technical powerhouse nation-states such as Iceland and Norway.
S&P500 Performance In Perspective
The NY Times ran an eye catching graphic earlier this week in honor of the S&P500 finally reaching the level set at the close of the previous decade (Dec 31, 1999, otherwise known as the beginning of the end of the bubble). It re-indexes the market by currency, and provides a good picture of the impact of dollar devaluation as well as rising commodity and housing prices.
Vitesse Q207 Conference Call Notes
Vitesse (VTSS.pk) delivered the required fiscal discipline in Q207. While running a super-tight ship does not come without downsides, at this point I believe the benefits outweigh the drawbacks.
My biggest concerns going into the call were inventory and cash management, and the company executed well in these areas in the face of declining shipments.
Nu Horizons - Follow the Herd
I am at a complete loss to explain the markets reaction to Nu Horizons’s (NUHC) most recent quarterly results. People appear content to follow the herd for now, but the problem with being surrounded by warm bodies is it makes a quick escape impossible.
Wireless Backhaul is Mostly… Wireless
T|Pack and Transwitch (TXCC) released a whitepaper (.pdf link) on the use of Ethernet over PDH for wireless backhaul. The whitepaper is good reading, and contained within was an interesting chart.
The majority of existing wireless backhaul is… Wireless. The majority of new installs are… Wireless. Ethernet is still only 15% of new installs.
I’m not super-keen on Ethernet over PDH. What is funny about the whole situation is many of the vendors who sell Ethernet over PDH solutions also sell the inverse - PDH over Ethernet (circuit emulation). Both technologies are breathtaking tour de force achievements. I don’t think either will ever be a runaway commercial success, though circuit emulation should have a good run as wireless backhaul transitions to Ethernet.
Maybe wireless backhaul is the big market for WiMAX?
AT&T Lightspeed Gets More Expensive
All is not well at the Death Star today. AT&T (T ) announced that capex for the U-Verse IPTV & Fiber to the Node initiative (known as Project Lightspeed) would increase from $4.6B to $6.5B. They also announced the scope of the project was being reduced from 19M to 18M homes.
This is a sizable increase (41%) in capex for a project that was designed to minimize cost. It is indicative that the decision AT&T made to substitute advanced technology to deliver an incremental solution in favor of laying fiber isn’t going as planned. The price of mediocrity just went up.
Any Hope for Ethernet over PDH?
One area that I strongly believe will see greater capex in 2008-2009 is Enterprise Access. (see “Enterprise Access Capex - A Ray of Hope?“)
Cable modems forced the Telcos to dig DSL technology from the closet they were hiding it in order to remain competitive. The same forces are aligning today in enterprise access - but this time it’s dark fiber, PON, and even short range wireless that are the threats. What technology represents Telcos only hope of retaining business customers?
Lightreading Gives Ma Bell Both Barrels
R. Scott Raynovich, Editor in Chief of Lightreading, unloads both barrels into retiring AT&T (T ) CEO Ed Whitacre in a Lightreading editorial outlining the massive gap between his pay and performance.
Shareholder activism along the lines of Carl Icahn’s Motorola crusade is sadly absent in the Networking component, equipment, and carrier business that I follow. Companies such as Centillium (CTLM) and Sycamore (SCMR) are allowed to drift along in a zombie-like state at the expense of investors. Even Robert Chapman has abandoned his cause at Vitesse.
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