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.

Zero-touch networks are possible today, I’ve seen them – Juniper

Zero-touch has been lauded as nirvana for the telcos, but some might longingly look at the promise as unrealistic. That shouldn’t be the case according to Juniper CTO Bikash Koley.

It might be incredibly complicated, it might be expensive to start and it might be impossible for some legacy areas, but Koley point towards his days at Google where software ruled the roost. Zero touch networks were in place there, the dream is real. Take that sceptics.

“I know it is feasible because I’ve seen it,” said Koley, who’s previous job was Head of Network Architecture, Engineering & Planning at Google.

Of course it was an easier job for the hyperscale players such as Google. They didn’t (or don’t) have to deal with legacy technologies and have a different type of workforce. The operators have to deal with old-school hardware and a different set of skillsets meaning that while they can follow the lead of the hyperscale players, there has to be a very different approach.

Automation is never going to be a one-step win, but there are areas which can be automated first. The data centre is a perfect example as it is segmented. Koley highlighted an opportunity to play around with technologies in a specific area of the asset, nailing the process before moving elsewhere. It is keeping an eye on the long-term goal and having to accept that perfection is never going to be a possibility.

A good example is with the legacy technologies which are in place. Yes, it would be nice to automate processes here, but is it worth it? What is the cost benefit of automation comparing to the time period before retiring the technology? Operators may have to wait until technologies are being retired to live the automated dream as it is simply more cost efficient to put up, shut up and pay up for new down the road.

Automation is coming. Look at the hyperscalers, they did it because of the network reliability benefits and a more robust, reliable network is something every operator would want. Most mistakes on the network are human error, so it might just have to be a case of getting rid of this risk. Conceding this round to the machines might have to be the case.

Quarterly earnings round-up – AT&T, AMD, Juniper and America Movil

AT&T misplaces quite a lot of customers, AMD warns of a poor Q4, Juniper profitability slides and America Movil feels impact of natural disasters.

AT&T needs to figure out the TV business

Looking at the positives, AT&T’s DirecTV Now proposition, its answer to the cord-cutting trend, brought in 296,000 net adds over the quarter, the most successful period to date, though this number was dwarfed by the 385,000 traditional pay-TV subs who made their way to the exit.

The team warned us in a SEC filing last week this might be the case, but it is now official. The cost of subscriptions are smaller and the number of subscribers are getting smaller as well. The TV space is not treating AT&T as nicely as it had hoped.

Over the course of the third quarter, AT&T brought in total revenues of $39.7 billion (compared to $40.9 billion in the same quarter of 2016) and net income attributable to AT&T totalled $3 billion (compared to $3.3 billion in 2016). The top-line figures are not ideal, though this has primarily been blamed on legacy voice and data services.

“We continued to operate our business efficiently in the quarter,” said CEO Randall Stephenson. “At a time of transformation in our wireless and video businesses, as well as investment in growth opportunities, we’re able to maintain our full-year guidance.”

AMD returns to profit but warns of shaky Q4

Semiconductor business AMD might have put a smile on investors faces by reporting a profit in Q3, but warnings of a weaker Q4 saw share price drop 10% in afterhours trading.

The Ryzen and Epyc series processors, which we both launched earlier this year, proved to be a strong success for the team, as operating profit was reported for the first time in three years. Bringing in $1.64 billion in total revenues, an increase of 26% from 12 months ago, is certainly a positive sign, and so is net income of $71 million. The latter figure actually compares to a loss of $406 million in Q3 2016, so this is certainly heading in the right direction.

“Strong customer adoption of our new high-performance products drove significant revenue growth and improved financial results from a year ago,” said. Lisa Su, AMD CEO. “Our third quarter new product introductions and financial execution mark another important milestone as we establish AMD as a premier growth company in the technology industry.”

Revenues for the quarter were up 34% sequentially, but it appears this isn’t going to be a lasting trend. AMD predicts a 15% decrease in revenues for the next three months, though this can be put down to some levelling off of cryptocurrency demand for GPUs, while seasonally the next quarter is the weakest for some areas of the semiconductor business. This explanation was not enough to save the AMD share price however.

Juniper slides down the profitability slide

Juniper announced a profit for the quarter, though it has lost ground on the same period in 2016. A decline in share price might indicate disappointment from the market, which has seen Juniper demonstrate year-on-year growth for the first two quarters of the year, but the team wasn’t able to repeat the performance a third time.

Net revenues were $1.257.8 billion, a decrease of 2% year-on-year, while net income stood at $174.4 million, an increase of 1%, but this wasn’t enough to save face.

“While we are disappointed in our third quarter revenue results which were impacted by timing of switching deployments, we have made significant progress on executing on our cloud strategy,” said CEO Rami Rahim.

“Despite lower than anticipated revenue growth impacting third quarter results, we have still been able to manage costs effectively,” said CFO Ken Miller.

To maintain revenues amidst a slight repositioning in the market is not a bad effort by the team, though a forecast of $1.23 billion for the final quarter of the year was seemingly not what the market wanted to hear; Juniper shares fell 6.6% during the afterhours trading period.

America Movil spreadsheet shook by natural disasters

The numbers at America Movil look relatively solid for the third quarter of 2017, but that wasn’t enough to prevent billionaire Carlos Slim’s flagship business slipping into a loss.

Postpaid wireless subscribers grew 6% year-on-year, while the broadband subscriptions increased by 5%, but total revenues declined 2.2% to roughly $12.7 billion, making a loss of roughly $500 million. During the same period of 2016, the team brought in a profit of around $110 million.

That said, it might not be the worst news. Revenues and profits were hit by numerous natural disasters in Mexico, Puerto Rico and the US, while a costly Colombian arbitration panel ruling are unlikely to feature again over the next couple of quarters. Without this legal spat, America Movil said it would have registered a profit.

A loss is never good news, but considering these are individual events, the outlook is certainly a bit more positive. The peso’s depreciation might be something to keep an eye on, but keep your hand away from the red button for the moment.