Consolidation in the B2B CSP market with Ribbon and ECI set to merge

Two companies involved in providing communications services to other companies are merging to make a single bigger one.

Ribbon Communications focuses on cloud communications as a platform while EDI provides network solutions to companies like operators and cloud providers, so there’s a distinctly cloudy theme to this merger. Rather confusingly Ribbon says it’s acquiring ECI through a merger. Ribbon is handing over 32.5 million shares, which equates to around $130 million, as well as $324 in cash to mergaquire ECI.

“The ECI acquisition will extend Ribbon’s reach into the networking market and propel us into the global 5G market,” said Daryl Raiford, CFO of Ribbon. “ECI brings world class networking technology and a proven track record of success in winning top customers in direct competition with major industry players.

“Ribbon has long-standing, deep customer relationships in North America and Japan, which will provide immediate access to ECI solutions into these substantial markets. We believe this combination will create new revenue opportunities to drive growth, provide our customers and partners with a broader solutions portfolio, and generate significant long-term value for our stockholders.”

“We are excited to join forces with Ribbon, bringing together Ribbon’s and ECI’s rich portfolios of communications solutions,” said Darryl Edwards, CEO of ECI. Both companies enjoy a distinguished operating history and are trusted suppliers to the world’s leading telecommunication service providers and enterprises. We aim to create a powerhouse company that offers world-class products for an enhanced customer experience, benefiting our combined global customer base.”

“With ECI’s solid position and long history in the packet-optical transport markets, this acquisition makes sense for Ribbon on multiple fronts, giving Ribbon an entry into the early and growing 5G xHaul transport market while providing its combined customers with a full stack of solutions,” said Don (couldn’t they have found a Darrell?) Frey, Analyst at Ovum. “In addition to cross-selling opportunities, this proposed acquisition will give Ribbon a broad product line and enhance scale as a communications solutions vendor to service providers and enterprises.”

The market doesn’t seem to have such a rosy view of this move, however, with Ribbon’s shares down a whopping 20% at time of writing. Maybe it has something to do with Ribbon CEO Franklin Hobbs bailing on the day of the announcement. Presumably he didn’t think this was such a great idea either, so you can see why investors might be feeling a bit twitchy. They could also have tire of Ribbon’s apparent addiction to M&A in general

Telecoms.com Annual Industry Survey 2018

Welcome to the 2018 edition of the Telecoms.com Intelligence Annual Industry Survey report. The findings from our signature survey continue to provide insights and foresight into the dynamic telecoms industry.

Once again well over 1,000 industry professionals from a broad array of backgrounds responded to the survey with their first-hand experience as well as their perspective views on the current status and future trends of the industry. As our customary practice, the report started with an overall industry landscape before we delved into six key areas pertinent to today’s telecoms industry: NFV, 5G, IoT, Digital Transformation, Security, and Test & Monitoring.

A few key findings from the survey:

  • 75% felt positive about the telecoms industry’s business outlook for 2019
  • 79% believed NFV is critical to their companies overall strategy
  • 61% believed emerging technologies and services are critical to telecom’s long-term success
  • 75% saw digital transformation as very important

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Ericsson upgrades Radio System, partners with Juniper on backhaul and buys CENX

Ahead of MWC Americas Ericsson has embarked on a frenzy of announcements around its core product offering.

The headline news is a significant upgrade to the Ericsson Radio System, its signature RAN product suite that has been a major part of its apparent recovery. Specifically Ericsson is launching something called the RAN Compute portfolio, which consists of a couple of baseband processors and a couple of radio processing units designed to be positioned wherever in the network you want your processing to be done. In other words this is a mobile edge computing play.

The other big thing in new, improved ERS is some new software called Ericsson Spectrum Sharing. This is designed to help with dynamic support of both 4G and 5G on the same spectrum, so long as you’re using ERS shipped since 2015, and can be installed remotely. While some of 5G will take place on higher frequencies, the stuff currently being used by 4G has the best propagation characteristics and will therefore remain valuable. This is the kind of 5G software upgrade Ericsson has been promoting as a key feature of ERS from the start.

“The hardware and software that we are launching today continues to address the flexibility needed for the next-generation networks,” said Ericsson EVP of Networks Fredrik Jejdling. “They offer our customers an expanded and adaptable 5G platform, making it easier for them to deploy 5G.”

We had a chat with Nishant Batra, Head of Product Area Networks at Ericsson, ahead of the announcement and he stressed this is all about ramping ERS’s 5G capability. Initially the propaganda was all about it being 5G upgradable, then about being ready for the 5G launch. Now the narrative revolves around this kit being positioned for the mass deployment of 5G.

Ericsson wants the world to see a picture of growing positive momentum and trying to be the perceived leader in 5G kit is a key part of that. “The momentum has never been better and we want to keep accelerating,” said Batra.

All this RAN shininess isn’t much good without some top-notch backhaul, however, and nobody is claiming that as an Ericsson strength. 5G is set to massively increase the volume of data passing across networks so, which being sure to big-up its own Router 6000 backhaul product and microwave tech, Ericsson has announced the extension of its partnership with Juniper to augment its transport efforts, as well as a new partnership with ECI on the optical side. So much for the big Ericsson Cisco partnership eh?

“Our radio expertise and knowledge in network architecture, end-user applications and standardization work put us in an excellent position to understand the requirements 5G places on transport,” said Jejdling. “By combining our leading transport portfolio with best-in-class partners, we will boost our transport offering and create the critical building blocks of next-generation transport networks that benefit our customers.”

“Commercial 5G is expected to represent close to a quarter of all global network traffic in the next five years,” said Manoj Leelanivas, Chief Product Officer at Juniper Networks. “With both companies bringing together industry-leading network technology, Juniper and Ericsson will be able to more effectively capitalize on the immense global market opportunity in front of us and help our customers simplify their journey to fully operational 5G networks.”

In other Ericsson news it has indulged in a rare bit of M&A via the acquisition of US service assurance vendor CENX. This move is designed to augment Ericsson’s OSS and managed services offerings and CENX is all about cloud-native automation, so its technology and 185 staff should be especially helpful in the area of virtualization. They haven’t said what it cost.

“Dynamic orchestration is crucial in 5G-ready virtualized networks,” said Mats Karlsson, Head of Solution Area OSS at Ericsson. “By bringing CENX into Ericsson, we can continue to build upon the strong competitive advantage we have started as partners. I look forward to meeting and welcoming our new colleagues into Ericsson.”

“Ericsson has been a great partner and for us to take the step to fully join Ericsson gives us the best possible worldwide platform to realize CENX’s ultimate goal – autonomous networking for all,” said Ed Kennedy CEO of CENX. “Our closed-loop service assurance automation capability complements Ericsson’s existing portfolio very well.”

Lastly Ericsson has announced a new partnership with US operator Sprint to build a new virtualized core and operating system dedicated just to IoT. Network slicing will be a major feature of the 5G era and IoT has network requirements quite distinct from other usage models, so it makes sense to not just apportion a piece of the network to it, but customise all the other tech too.

“We are combining our IoT strategy with Ericsson’s expertise to build a platform primed for the most demanding applications like artificial intelligence, edge computing, robotics, autonomous vehicles and more with ultra-low-latency, the highest availability and an unmatched level of security at the chip level,” said Ivo Rook, SVP of IoT for Sprint. “This is a network built for software and it’s ready for 5G. Our IoT platform is for those companies, large and small, that are creating the immediate economy.”

“Sprint will be one of the first to market with a distributed core network and operating system built especially for IoT and powered by Ericsson’s IoT Accelerator platform,” said Asa Tamsons, Head of Business Area Technology & Emerging Business at Ericsson. “Our goal is to make it easy for Sprint and their customers to access and use connected intelligence, enabling instant and actionable insights for a better customer experience and maximum value.”

That Ericsson is making so many announcements ahead of MWC Americas would appear to be a major endorsement of the event and of the GSMA’s regional expansion of the MWC brand. The timing might also have been influenced by the staging of Huawei’s Operations Transformation Forum event and even IFA, and it’s clear there is room in the telecoms calendar for big Autumn trade fests.

Telecoms.com Annual Industry Survey 2017

The 2017 edition of the Telecoms.com Intelligence Annual Industry Survey once more raises the bar for insight into the incredibly diverse telecoms business.

This year’s survey once more gathered the thoughts and perspectives of more than 1,500 telecoms professionals with a cumulative experience of 24,000 years. As usual we begin with our comprehensive sweep of the telecoms landscape, before taking a deep dive into six specific areas affecting telecoms today. From ultra-broadband to test and measurement via IoT, NFV, SDN, video and security, we examine the principal areas affecting telecoms operators today.

More than half of the respondents to the 2017 survey originated from mobile or fixed operators, so the findings you’ll come across in this report provide a uniquely significant insight into the most common challenges and mindsets of people working on the ground in the telecoms industry today.

Some of our key findings this year are:

  • 77% feel positive about the telecoms industry’s prospects for 2018
  • 62% say emerging technologies are critical to the industry’s long-term success
  • 56% say IoT is a priority investment area for their company in 2018
  • 54% of operators say their company will increase spending on SDN in 2018

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