Amdocs Industry Analyst Summit: Complexity Is Our Friend

Peter Jarich

Peter Jarich – VP, Consumer Services and Service Provider Infrastructure

Summary Bullets:

  • On December 5-6, Amdocs held an Industry Analyst Summit to provide an update on its product portfolio, corporate strategy, innovation efforts, and customer attraction across its business lines.
  • One constant across the product and business line updates is an expectation that telecom networks and services will continue to get increasingly complicated – and that Amdocs will benefit by addressing that complexity and educating its customers.

Amdocs is a fixture in telecom networking and service enablement. It’s not surprising, then, that across our telecom networks research, assessments on the vendor and its positioning are plentiful, including:

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After Years of Halfhearted Green Initiatives, the KPN-Led Sustainability Initiative Might be a Sign of a Real Movement Afoot

John Byrne – Service Director, Service Provider Infrastructure

Summary Bullets:

• KPN is taking a leadership position in driving its vendor community toward more sustainable practices. Other operators are likely reviewing KPN’s “Circular Manifesto” as a template for how they should revise their own sustainability initiatives.

• Telecom technology and software vendors are increasingly being pushed by their key operator customers to commit to adopt manufacturing and production practices that rely on reusable or recyclable components, as well as renewable energy sources.

Dutch network operator KPN, which provides mobile and fixed-line service to nearly 40 million customers in The Netherlands, Germany, Belgium, France and Spain, caused a stir in October, announcing an aggressive environmental initiative that could become a model for operators looking to beef up their “sustainability” credentials. Read more of this post

Looking at the Good & Bad News in Q3 2017 Telecom Vendor Financial Results

John Byrne – Service Director, Service Provider Infrastructure

Summary Bullets:

  • Revenue was down year-to-year for Ericsson, Nokia, Cisco and even ZTE, which had carried positive growth for H1 2017. But, vendors are generally doing a good job driving out costs in order to increase profitability.
  •  On their face, Ericsson’s Q3 2017 results reflected a company facing multiple challenges and a lengthy road to recovery. However, there were signs of light indicating that the fundamental business may return to solid footing once painful restructuring initiatives are completed.

The Bad News: Revenues Down

With the results now in for Q3 2017, it’s clear it was a rough quarter for many vendors. Results were perhaps most striking for ZTE (consolidated results shown), which experienced a nearly 8% decline compared to the prior year quarter. ZTE’s results were a distinct reversal from the first half of 2017, in which the company grew revenue 13% year-to-year. Read more of this post

ZTE’s European Success: What’s the Story?

Peter Jarich

Peter Jarich – VP, Consumer Services and Service Provider Infrastructure

Summary Bullets:

  • This week, ZTE announced 5G network testing trials in Europe with Wind Tre and Orange, building on previous high-profile work with Telefonica and Telenet.
  • Financial stability when compared with its European vendor counterparts could explain the success, but the story goes much deeper, including the right 5G strategy and targeted marketing.

This week, ZTE announced its Q3 2017 earnings. For the most part, the results weren’t too surprising. Revenues for the first nine months of 2017 were up (though down in Q3 2017 compared to 2016). Profits were up significantly. The company did not report on the geographic makeup of its revenues, but if they resembled the vendor’s mid-year results, it’s safe to assume that China continues to the biggest contributor to ZTE’s sales; it was ~60% of mid-year revenues and the most profitable of the reported regions. Read more of this post

CBRS: How Much Does Priority Access Matter?

Peter Jarich

Peter Jarich – VP, Consumer Services and Service Provider Infrastructure

Summary Bullets:

  • Ongoing questions around CBRS priority access license (PAL) terms suggest that licenses won’t likely be available until a year from now.
  • Without priority access, CBRS will still roll out; many use cases don’t require it. However, the sooner PAL terms are decided on and licenses auctioned, the better it will be for driving the industry forward.

Combining insatiable spectrum demands, an interest in targeting enterprises with wireless technology (from vendors and services providers), and imminent commercialization, there was little doubt that CBRS would be a hot topic at the GSMA’s inaugural Mobile World Congress Americas event. Read more of this post

“Use Case Based Marketing:” Passive Aggressive (Yet Defensive) Competitive Messaging?

Peter Jarich

Peter Jarich – VP, Consumer Services and Service Provider Infrastructure

Summary Bullets:                 

  • The concept of marketing new technologies or solutions around use cases seems like a logical way to link deployment to real world carrier requirements and opportunities.
  • Use case marketing is also a not-so-subtle way to suggest that competitor messaging is based on hype more than reality, in the process flagging areas where a vendor potentially sees itself at a perceived competitive disadvantage it needs to counter.

Last week, Nokia held an analyst summit dedicated to its Fixed Broadband business.  One of the most anticipated topics was the discussion around software-defined access.  Beyond the fact that software-defined anything is buzzworthy,  going quiet on a hot, new (or new-ish) technology is a recipe for ceding mind share and giving customers a reason to listen to your rivals. Read more of this post

A Tale of Two Stocks: Ericsson and ZTE

Peter Jarich

Peter Jarich – VP, Consumer Services and Service Provider Infrastructure

Summary Bullets:

  • Over the past year, the stock performance of ZTE and Ericsson has diverged, with ZTE’s share price up almost 60% over a year ago and Ericsson down almost 20%.
  • With Ericsson being a traditional telecom networking leader and ZTE just outside the top three players in the market, their stock performance tells a broader story about the market’s view of telecom and market concentration.

Earlier this week, Verdict posted a ‘Research Wire’ comparing the stock performance of Ericsson and ZTE over the past year. The exercise was a relatively straightforward one. Where Ericsson had traditionally been the top player in the telecom networking space for many years, ZTE has struggled to break into the top three. More recently, Ericsson has suffered from sales declines and disruptive corporate re-organizations, while ZTE has been forced to pay over $1 billion in sanctions in the U.S., as well as reportedly laying off 3,000 employees. Read more of this post