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ZTE, Huawei Convicted in Absentia of Algerian Bribes
Tuesday, 12 June 2012 03:11

quigley$12M laundered through Luxembourg, British Virgin Islands. Dong Tao, Chen Zhibo and Xiao Chuhfa face ten years in jail in the unlikely event they are extradited to Algeria. ZTE and Huawei have been banned for two years from Algerian government contracts. Mohamed Bukhari, once an aide to the CEO of Algerian Telecom, has been sentenced to 18 years. The charges date back a decade, to a period when Alcatel, Siemens and Lucent were massively bribing officials and executives around the world. The Chinese presumably believed they had no choice if they wanted to compete and did what so many Western businessmen do.

  El Watan adds that Algerian customs authorities are seeking almost $50M from ZTE. Reporters across Africa are retelling stories of Huawei difficulties from Uganda to Angola, some undoubtedly inspired by a backlash against Chinese success in Africa. The news stories also highlight how Huawei was blocked from Australia’s NBN. NBN is led by Mike Quigley, who once led a division of Alcatel that paid tens of millions of bribes.

   Hard to believe Quigley, a hands-on manager, never know where so much money was going.

 
Australia's Turnbull wants fiber/DSL to reduce national broadband cost
Friday, 11 May 2012 02:55

Turnbull"The betting markets in Australia have the Opposition at a 5 in 6 chance of winning the next election," Commsday's Grahame Lynch writes me. That would make Malcolm Turnbull Communications Minister. Turnbull "has said he will send the NBN off for a Cost Benefit Analysis. That would almost certainly recommend the cheaper option," Lynch adds. Noted Australian analyst Shara Evans agrees, "If Labour loses the next election (2013), Turnbull's policy will most likely be implemented.  Turnbull would use a combination of technologies: FTTN, wireless, HFC (existing networks), DSL (primarily existing networks)."
     Turnbull wants to cut spending by running fiber only to the neighborhood node, then VDSL over existing copper to the home. With vectored and bonded DSL, that would provide speeds of 50-100 megabits down to most homes rather than the gigabits possible with fiber. It would save $billions out of the preposterous $43B NBN budget. Current NBN Minister Conroy acknowledges the savings on ABC Radio. “It would be quicker and will cost less to build a fibre-to-the-node network.  That is just an unambiguous fact.” Conroy thinks the more expensive fiber home is worth the extra cost, however. 
     Turnbull disagrees, looking to save money on NBN but every practical means: VDSL, using the existing HFC for cable modems, renegotiating Telstra's contract and re-examining the purchasing. Is Alcatel charging Mike Quigley prices as low as they give to China Telecom for similar equipment. These are all appropriate questions.  He's an interesting character: a centimillionaire ex-Goldman Sachs banker who made a fortune in an email company he sold during the boom. 

Here's his complete speech to the Commsday Summit
Sydney, 18 April 2012

Last Updated on Thursday, 24 May 2012 23:30
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Australia NBN: Fiber home or fiber DSL
Thursday, 10 May 2012 15:31

boxing kangaroos by+aaardvaark smMalcolm Turnbull, likely soon Communications Minister, wants to bring down cost
Julia Gillard’s Labour government is only a vote or three from falling and far beyond in the polls for an election next year. If the opposition Coalition takes over, Shadow Minister Malcolm Turnbull will likely be in charge. He’s serious about a “Cioffi flip,” canceling the fiber home build and using VDSL over copper for the home connection.
     Turnbull made a forceful speech to the CommsDay event, asserting NBN as currently planned is “on the path to price gouging” due to heavy capex running fiber to 93% of Australian homes. They also are launching a satellite and building wireless networks for the remaining 7%. The budget is over $40B - $5,000/home for 8 million homes.    
    Turnbull is on target on one crucial point: $5,000/home is off the wall, given that the extremely remote will be served by satellite. Other large carriers are fibering for far less, even adjusting for the NBN goal of reaching 100%. Something is profoundly wrong with the NBN budget. The $11B+ being paid to Telstra to not compete is part of the problem. Turnbull wants that renegotiated; NBN is paying too much, apparently a bribe to Telstra not to fight the network.
    A second cost escalator is a schedule that goes too fast at the beginning, before the field installers develop the skills they need. Verizon deliberately went slowly the first two-three years, developing systems and crew experience. They easily met every schedule milestone after that and constitently lowered costs. At Qwest, the more experienced teams could connect a home in half the time of those with less experience.
    Much of the budget problem is clearly political choices made by a management unwilling to be tough to bring down the price. The Australian taxpayer deserves better.
    Turnbull is also right that the NBN pricing is distorted for political reasons. NBN artificially is pricing moderate speeds low and the higher speeds much higher. The price on minimum service was deliberately set at about the price of current Australian broadband. The price for the higher speeds - which cost very little more to deliver - will be much more. That misses the whole point of the NBN, which is a faster Internet for all Australians.

Last Updated on Friday, 25 May 2012 00:53
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Middle of England: DSL live speeds of 80-120 megabits
Monday, 23 April 2012 08:57

origin turtleOrigin Broadband, in Sheffield and Doncaster, is installing their own field cabinets and published actual data from their first installs. Many customers are getting actual speeds of 80+ megabits down and 20+ megabits up, depending on how close they are to the cabinet. Origin's prices range from about $28 for 24 down, 2 up to Origin Max, as fast as they can get you, for less than $60. Install fees are a little high, $85-$120. 

   Neil Hart writes me "It's an initiative part funded by the EU and the city councils in the area. It doesn't rely on BT infrastructure (except the wire to the home) and is entirely independent. We are able to offer all of our customers a service free of any restrictions, limits, caps, contention or fair usage policies. We are a local company set up by local entrepreneurs determined to do things differently to the big players. We can offer speeds of up to (and in some cases over) 100mb."

 

Distance to Cabinet

DownstreamUpstream
147 m 106 Mbps 22 Mbps
171 m 121 Mbps 27 Mbps
183 m 98 Mbps 9 Mbps
245 m 104 Mbps 21.6 Mbps
248 m 107 Mbps 27 Mbps
269 m 98 Mbps 27 Mbps
392 m 81.5 Mbps 19.8 Mbps
416 m 96 Mbps 30 Mbps
490 m 76 Mbps 24.2 Mbps
612 m 56 Mbps 22 Mbps
857 m 32 Mbps 8.5 Mbps
1372 m 22 Mbps 1.7 Mbps

 

Last Updated on Tuesday, 08 May 2012 23:36
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Deutsche Telekom Renationalized? Union says yes
Saturday, 14 April 2012 12:08

DT logo in lightsDisguised bailout. Once mighty Deutsche Telekom is reeling after paying $27B in dividends the last six years on only $10B in profits. They’ve milked the network to pay for that, with capex more than $10B less than depreciation. Continued low capex is a plan for disaster, especailly as cable covers 65% of the country and is rapidly taking broadband customers. They killed their plans to upgrade most of the country to fiber home and fiber/DSL (FTTN). Billions have been lost in expansion into Eastern Europe, especially Greece. Billions more - possibly tens of billions - have been tossed away at T-Systems, their huge IT outsourcing subsidiary.


   They are now pleading for a state bailout of their shareholders. Vice Chairman Lothar Schroeder wants the government to reinvest in the company the $1.3B a year it collects in dividends. Germany owns 32% of the company, which has a market cap of $50B. It wouldn’t be long before the government owned virtually the majority of the company. Schreoder represents the ver.di union on DT’s board, which is concerned that DT’s massive disinvestment will force further cutbacks and wage concessions.    “Leave the money in the company and take a higher share,” Schroeder tells Cornelius Rahn of Bloomberg. http://bloom.bg/HnGd6C “If you do that for five years, Deutsche Telekom would make some progress in broadband and the government would have something to show for.”

    The union at France Telecom is going further in a battle between employees and shareholders for cash. The union fund, a minor shareholder, is proposing a dividend cut from 1,40 to 1,0 euro at the next shareholders meeting. Les Echos suggests that management is quietly backing the proposal although the CEO publicly denies that. Telefonica, KPN, TI, Frontier and British Telecom have already cut dividends.  Others - especially AT&T and Verizon - are cutting back wherever necessary in order to keep dividends and presumably share prices up.

Verizon is prettying itself for a merger with a huge DSL price increase that brings up short run profits.
Last Updated on Saturday, 14 April 2012 13:41
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CISPA - Beyond Security to allowing total corporate surveillance
Wednesday, 11 April 2012 18:29

Letting any almost company legally get all your phone and email records. CISPA would allow companies to share any information they have with government if claimed related to cyber-security. Civil libertarians hate that; others think anything done in the CISPA croppedname of security needs to be allowed. You can and should make up your own mind on what's right. The bill (below) goes much further, including allowing essentially any company to share essentially anything with other companies. They merely need to claim it's somehow related to "cyber-security."

     But it's ridiculous to allow say Microsoft to ask Verizon for all my phone call records and who I emailed because I break a story about Microsoft, say how they price Microsoft Mediaroom that disadvantages community television. They could claim that a "trade secret" and hence intellectual property. This "cyber-security" bill provides near total protection to private companies sharing information about "theft or misappropriation of private or government information, intellectual property, or personally identifiable information."  The plain language of the bill would allow Verizon to hand over my email and phone contacts if I reported, as I have, that three separate senior FCC employees thought the Spectrum Crunch report was a fiction invented for political reasons. That's government information not officially released I may have "mis-appropriated."  Cisco, I discovered, was damned mad I reported they were offering to sell AT&T femtocells (quantity 10M) for $50 and certainly both companies believed it "private information." Especially because Cisco was selling the same unit to others at $125-150. Gucci would love to get the complete list of emails from a company they think is selling counterfeits on eBay. They could follow up with (legal) questions to every customer asking about counterfeits and probably destroy the business even if they found nothing. Think of the possibilities for a lawyer chasing "pirates" of pornography if they could get someone complete email and phone records. 

    Adding fake handbags and basic reporting makes this far more than a bill about security and totally abusive. Reasonable people may disagree about how far government should go in the name of security. But giving private companies complete access with no recourse for abuses is off the wall. So shame on Christopher Padilla of IBM, Tim McKone of AT&T, Peter Davidson of Verizon, Michael Powell of NCTA and Fred Humphries of Microsoft for their strong support of the House bill. Maybe that didn't bother to read what they were signing on to and didn't realize the bombshell built in.  At minimum, all ISPs should make clear they will not provide information outside of government unless subpoenaed. 

    Those who believe this bill is important for "security" should be the first to strip "theft or misappropriation of private or government information, intellectual property, or personally identifiable information" out so the bill isn't blocked.

Last Updated on Saturday, 14 April 2012 16:34
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Right Question for Germany's Philipp Rösler: "What about the other 30% of Germans"
Sunday, 13 May 2012 22:33

 

Rosler Kurth, HomannDr. Rosler: "How will we get high speeds for the 30% of Germans who can't get cable and Deutsche Telekom probably won't upgrade?"

Two-thirds of Germans can get cable, nearly all of them at 50-100 megabits. To compete, Deutsche Telekom has upgraded about half of the cable homes to 50 meg VDSL and is building to most of the rest. DT has no public plans to reach most of the 30% of so of homes they don't have cable competition. Without government action, about 10M German homes will be in the slow lane for a decade or more.

    Inaugurating Jochen Homann as new chief of the German Network Agency, Minister Rosler claimed the German "telecommunications market is now one of the most dynamic markets in the world." Germany's market is far more competitive than it was thanks to excellent work by the outgoing President, Matthias Kurth. Kurth resisted enormous pressure from DT to give them huge concessions because otherwise "they wouldn't build the upgraded networks." Kurth, influenced by Columbia University's Eli Noam, was confident DT would upgrade to prevent cable taking all the customers. Noam was a prophet; DT is building anyway.

    I asked Kurth a while back about what it will take to get the remaining 25-30% upgraded and he gave me a forthright answer "We still have to work on that." The obvious move is to echo what Ed Richards is doing in Britain, lowering the amount British Telecom can charge competitors for the obsolete copper while allowing them a more generous rate where upgraded. (He probably is setting the latter too high, however.) Until then, in the monopoly areas DT makes more money not investing.

     Rosler owes 25M Germans a close look at what will get them a better Internet.

Last Updated on Monday, 14 May 2012 02:21
 
VDSL/Fiber: Tens of Millions of Lines in Germany and Italy
Friday, 11 May 2012 02:44

 

50 meg target for 13M homes in Germany, expanding and 30 cities in Italy.
36% of German homes are now served by VDSL, Timotheus Höttges said in the financial call, nearly all of them in the 2/3rds of Germany served by cable. They intend to extend that across most of the footprint served by cable. They hope to bring vectoring out of the labs soon. Höttges promises to invest more, probably offering VDSL at 50 meg or more to most of the cable homes.
    In Italy, Marco Patuano promises to roll “FTTC” to thirty cities within a year. As usual, he blames the regulator for the delay, which had far more to do with TI reducing capex to support the dividend.
   Watch France. Although Xavier Niel inspired a national commitment to fiber, he’s now cut back any further extension. His Free Mobile is struggling with extraordinary growth that has produced service problems and there are rumors the install costs are going over budget. France Telecom never wanted to spend the money for fiber and is close to persuading ARCEP to let them use VDSL instead.
   From the ever-invaluable Seeking Alpha, the transcripts

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It's the Microfilter, Stupid
Tuesday, 08 May 2012 20:05

Vectoring’s cool, fiber is fast, customer support and maintenance is boring. But bringing down operating expenses may have more impact on broadband economics than exciting technology. One large European carrier is finding big savings changing the call center scripts to emphasize the most common problem. The ASSIA presentation for their new release (below) identified the microfilter problem, which they are addressing with diagnostics.
  The flashiest feature in ASSIA’s new DSL Expresse 2.7 is the ability of a field technician to use her iPhone for “real-time line optimization.” While at the customer premise, the tech can adjust the DSLAM parameters for the line and see if it resolves the problem. So can the call center operator. ASSIA’s extending that to Android phones as well.
   Expresse now can support unbundled VDSL, crucial to several European rollouts, especially of vectoring. British Telecom and Deutsche Telekom, the largest VDSL/FTTN rollouts in Europe, can’t use vectoring until they make it compatible with regulatory policy. Expresse now supports “Multi-tenancy,” allowing each ISP access to their own customer information and support. This is now supported on Alcatel DSLAMs and will soon cover Huawei as well.
   KPN confirms they will deploy vectoring by the end of the year, as reported by Telecom Paper. They join Telecom Austria, Swisscom and Belgacom in public announcements of vectoring. Vectored DSL will be common in new builds later this year or next.

Last Updated on Tuesday, 08 May 2012 23:39
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Alcatel: Vectoring in the wild
Tuesday, 17 April 2012 17:55

 3 customers, 15 trials complete. Alcatel's first to the field with announced deployments at Belgacom and Telecom Austria. Stefaan Vanhastel writes

" - we now have 3 customers: Belgacom, Telecom Austria pilot deployment in Korneuburg, + 1 other tier-1 in Europe (not yet public)

- we expect more customer announcements in the next 3-6 months

- we have 15+ trials completed, and many planned. (trials not only in Europe and NAR, but also in the Middle East, Latin America, and APAC)"

   In the lab, vectored noise cancellation (John Cioffi's DSM Level III) doubles speeds on short loops. Those results are common but not universal in the trials, with lots of issues everyone is working hard to resolve. 

   Until large carriers invest in more remote terminals and updating the networks, only a very few lucky customers will get vectored speeds.

 
Ericsson dropping the DSLAM line
Saturday, 14 April 2012 11:58
Lars Magnus Ericsson statue Telefonplan Midsomarkransen Stockholm 2005-08-13Commsday reports pulling out by end of year. Ericsson has been a leading maker of DSLAMs at least since 1998, selling about $100M/year recently. Their market share has been modest as Alcatel and Huawei fight it out for the lead.  Commsday reports Ericsson has told multiple ISPs they are phasing out the product and not seeking customers after the end of this year.

Ericsson bought Entrisphere because they were confident they would win much of the 30M line AT&T U-Verse contract from Alcatel. AT&T soon announced Ericsson-Entrisphere as a supplier but ultimately sourced most units from Alcatel. That was a surprise, because Alcatel (and Microsoft) were  two years late according to a presentation I have from Alcatel to AT&T. They also went $B over budget, including $hundreds of millions that Alcatel claimed for "changes" and AT&T believed were covered by the initial contract. Ben's new management at Alcatel patched things up somehow.

 They did sell nearly a million ports in one quarter last year but to do so had to meet extremely aggressive pricing. About a year ago, I congratulated CEO Hans Vestberg on winning a contract in China for VDSL. He replied "If you knew the price we had to offer, you wouldn't be so enthusiastic."  At the time, he was confident that the new edge routers from the old Redback division would become a hot product and pull up sales for the wireline division. It hasn't worked out that way.

  Two years ago, Ericsson and Huawei made opposite decisions. Ericsson is concentrating almost everything on wireless and LTE, where they remain at the very top tier. Huawei is branching out, investing $billions in enterprise routers, smartphones, and the cloud. Inevitably Huawei will far surpass Ericsson in sales but Ericsson expects to be more profitable being less diverse.

   LTE sales are booming, with AT&T, Vodafone, and now France Telecom building quickly. But Verizon is winding down and AT&T has guided to flat capex. LTE Advanced is a huge advance - 5 and 10 times the speed - but is already designed into most LTE gear shipping. In competitive countries, LTE Advanced will inspire a wave of network upgrades but the network requirements are relatively modest.

   Sad to see Nokia and Ericsson abandon the DSLAM business.
Last Updated on Saturday, 14 April 2012 12:06
 
DSLAM shipments up 10% Q4. VDSL + 25% Y/Y
Tuesday, 10 April 2012 12:44

Dell’oro finds VDSL now 31% of ports. Steve Nozik of Dell’oro sees a strong trend to VDSL as customers are demanding higher speeds. Years ago, I reported chipmakers expected ADSL to rapidly fade away because VDSL chips were faster for short loops while identical to ADSL for longer loops. It didn’t play out that way; the ADSL mode in VDSL chips had performance problems. Power and space requirements were much greater. VDSL DSLAMs still cost about $20 more per port.
     Nozik believes that ADSL will still lead in unit sales but VDSL in 2012 will pull ahead in revenue. With DSL coverage well over 90% of the developed world, I believe unit growth will predictably drop. Although China’s 35M ports of fiber this year is a factor,  saturation is the primary reason DSL sales will almost certainly be flat to down. DSL gear remains a multi-billion dollar per year market.
     Dell’Oro shares much of the primary data with me, allowing me to confirm, yet again, they do a superb job gathering the data. http://www.delloro.com/services_access.htm.

 
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