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Ericsson Cutting 25K Jobs

Magnus Ericsson Svenska Dagbladet report not denied. Every large telco vendor outside of China has been suffering for several years, although Ericsson maintained an illusion until recently. Ericsson and Nokia remain remarkable companies with world-class engineers, but it's a tough business. An Ericsson exec in India estimates the world market is going down currently at ~5%/year.

Official details are limited. Ericsson claims the cuts "do not include R&D." Neither Ericsson nor Nokia can cut research. They face Huawei, with an R&D budget larger than the combined spending of Ericsson, Nokia, and whomever you place third. All three have great products, but Huawei's greater research budget is allowing them to outflank others with a wider product line.

The service division is the largest target. It's probably been losing money for several years but that's been buried in the financials. The video division, built up by spending billions, is on the block. That includes what once was Microsoft's IPTV.

Q2 U.S.: Every Telco Goes Down

Q2 U Cable up to 64% of the market. For a decade, telcos held on to 45% of the market in the U.S. But AT&T and Verizon haven't upgraded almost half their lines, planning to go wireless only to 10's of millions of homes. (One network is cheaper than two.) The other U.S telcos have done even less, keeping dividends far higher than earnings and skimping on capex.

Customers are fleeing DSL networks that often are ten and fifteen years old. The U.S. has cable to 92%, with most offering 50 megs standard. Comcast's primary offering is 100 megabits and they just extended a gig of DOCSIS 3.1 to Boston and Philadelphia. Frontier lost 101,000 subs and Century 77,000. Verizon's once world-leading fiber network wasn't to prevent a loss of 23,000 customers. The saddest story is AT&T. They have added 5M lines of fiber the last two years and spent $67B on DirecTV, seeking an expanded customer base. Despite that, they lost 9,000 customers.

Cox 40% Gigified in 2017 (Correction)

Mari Sibley headset 200 All 6M Cox customers should have a gig available by the end of 2019. Correction: I had reported that Cox had intended to offer a gig to all in 2016. I believed that was a commitment to a consumer priced DOCSIS 3.1 service. I was wrong. Cox did have a near-universal gigabit offering, but it was a business priced dedicated fiber, ($thousands, I believe.)

Todd Smith of Cox writes, "DOCSIS 3.1 is live now with employees and we will begin deploying to customers in some markets later this year. 40 percent of the households we serve nationwide will have access to Gigabit speeds by the end of 2017."

Cox Vice President Philip Nutsugah tells Mari Sibley, "The company plans to reach the rest of its customers (or at least 99% of them) with gigabit broadband by the end of 2019."

50M home giant Comcast expects, "DOCSIS 3.1 across the majority of its footprint by year-end."

Upstream Gigabit Cable as Cisco Demos Full Duplex

FDX Cisco Ready for customers 2019-2021. John Chapman made cable engineering history with the first demonstration of full duplex cable at ANGA COM in Cologne, pictured. The setup doesn't look like much until you realize this is the world's first prototype of a 10 gigabit down, 5 gigabit up, cable system. By using the same spectrum upstream and down, remarkable speeds are possible.

Chapman outlined the path to gigabit cable in 2005. Almost no one believed it possible except for a handful of innovative engineers. His ideas became central to DOCSIS 3.0 and 3.1. Comcast today is offering the gig downstream to millions of customers. If John says FDX gigabit upstream will work, I'm a true believer. (The schedule isn't guaranteed, of course.)

Full duplex communication has a long history, but not at the speeds of today's wireless and modems. Phil Levis & Sachin Katti of Stanford have spun off Kumu Networks, which has ambitious plans for wireless FDX and inspired renewed interest.

FDX for cable is a harder problem. Cable systems are "point to multipoint" - one central unit, the CMTS, attaches to many homes. The challenge with point to multipoint is that an echo canceller can only be used at the CMTS end.

Cisco: Drastic Fall in Internet Traffic Growth, Going Down to 15% in U.S.

Peak Internet growth may have been a couple of years ago. For more than a decade, Internet traffic went up ~40% every year. Cisco's VNI, the most accurate numbers available, sees growth this year down to 27% on landlines and falling to 15-20% many places over the next few years. (Chart below) (Thank you, Arielle)

The result: bandwidth cost per month per subscriber will continue flat to down. For large carriers, that's been about $1/month since ~2003. Moore's Law has been reducing equipment costs at a similar rate. This is confirmed by the global carrier spending on service provider routers, which continues about flat per customer.

Mobile growth is staying higher. 40-50% worldwide. Fortunately, mobile technology is moving even faster. With today's level of capex, LTE networks can increase capacity 10x to 15x.

Q1 U.S. Cable adds Million, Telcos Fall Further

Frontier lost 107K broadband subscribers in Q1. For years, I've been expecting the low capex at Century, Frontier and Windstream would hurt, as their offering falls further and further behind cable. In most of the United States, cable's basic offering is 50-70 megabits down, 5 up. The three mid-sized U.S. telcos offer 5-40 megabits down to most, often at the lower end. Especially at Frontier, marketing has been deceptive. They advertise "up to 100 megabits" when the strong majority of their homes can't get even half that.

The future is now, perhaps. Frontier is down 107K in Q1, while Windstream and Fairpoint also fell.

AT&T Brings Open Source Drive to DC June 27

90%+ of the people in the industry don't understand how remarkable the change has been at AT&T, including Open Source. Even fewer in DC realize how deeply they are committed. CTO Andre Fuetsch, Mobile President Glenn Lurie, and SVP Bob Quinn are coming to DC on Tuesday morning, June 27th, to let the capitol know it no longer is the company most people think it is. Randall Stephenson and

Randall Stephenson and team over the last decade probably have the best management results in the Western world. I attribute that to a CEO who encourages others to lead. Fuetsch, John Stankey, and John Donovan have positioned T as the world leader in Software Defined Networks, likely yielding a major improvement in costs.

Some things few realize about today's AT&T: They are in the middle of eliminating 70,000-80,000 jobs, one of the largest cutbacks in history at a profitable company. (NY Times, FNN) SDN is great for operations, bitter for jobs. They have 60 MHz of unused spectrum, enough to duplicate Verizon's complete network.

Ask them, and they will tell you they are “no longer a telecom and wireless company. We are a media company,"

Terabit DSL for the Interested Layman

Use the plastic sheathing around the phone wires as a waveguide. With 1,000x more spectrum, you get 1,000 more speed. Glass fiber optic waveguides can carry 250 terabits. John Cioffi wants to apply similar techniques using the air gaps between the plastic surrounding a billion phone lines.

The proposed terabit DSL can use 300 GHz+ of spectrum, "submillimeter waves." Current DSLs use 100-500 MHz. Higher frequencies just wouldn't make it through a standard copper wire. The signals get weaker (attenuate) very quickly in copper. 500 MHz can only carry about 30 meters. Gigahertz, even less.

Cioffi proposes using the tiny air spaces between the plastic insulated wires as a "waveguide." The signal would travel over the air gaps, not the copper or plastic. Fiber optic, glass or plastic, "guides" the waves; why couldn't the plastic insulation do similar? (The waves are very, very small. They can easily fit in the gaps.) The signal is carried through the air between the wires, not on the copper wires.

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