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Showing posts with label Predictions. Show all posts
Showing posts with label Predictions. Show all posts

Friday, 17 April 2009

Rough time for telcomm vendors but sees light ahead

There have been many reports over the past year about the recession and hence the effects on the telecomm companies.

The verdict was already out that the telecom equipment vendors are bracing for what is expected to be a fairly rough round of first-quarter earnings, with the global economic recession cutting into demand from both consumers and carriers alike, according to a report in the Wall Street Journal

The report also forecasted that some of the world's biggest European equipment vendors, found that while some would fare better than others, 2009 will generally be more difficult than 2008 for the companies.

Amid all these developments came the report yesterday when Nokia reported a worse-than-expected 90 per cent slump in first quarter profits.

This is Finnish mobile group's worst results since 2001 and rightly so, blamed on to the global economic downturn which has hit phone sales.

Mobile phone companies have been hit hard by a sharp drop in consumer spending. Nokia said it sold 93.2 million handsets during the first quarter, down 19 per cent from a year earlier and down 18 per cent from the fourth quarter.

Sony Ericsson, which has its headquarters in London, has also announced today that it’ll be slashing another 2,000 jobs around the world. The latest cost-cutting drive comes as the company posted a €293m (£258m) net loss for the first three months of the year.

However Nokia still maintained its market share which remained steady at 37 percent. The company also calmed jittery investors by reaffirming its prediction that the mobile market would shrink by 10 per cent this year, and the decline would level out in the second half of the year. It retained its operating margin forecast for its devices and services business.

Although the above news looks to be shocking but it didn’t stop the company’s shares to rise 9.5 per cent to €11.05 on the Helsinki stock exchange. The primary reason for the rise is that the investors were cheered by the company holding steady on its outlook after a grim quarter.
Similar to Nokia, Sony Ericsson too has vowed to return to profitability as quickly as possible thus calming the investors.

Like many other analysts especially in the financial world, telecom vendors like Nokia and Sony Ericsson too believe that there are nascent signs of relative stability going into the second quarter.
I still believe it’s a little bit too early to call a bottom on demand in the mobile devices business.

However most of the analysts expect that companies to return to profitability in the second half of 2010 thus showing a light at the end of the tunnel.

Monday, 26 January 2009

Reversing trend of outsourcing

For years the companies has flourished in their business where outsourcing was one of the major source of saving money and still getting good work done.

One of the main reason why India become the major hub for outsourcing was because of it’s immense pool of skilled science graduate which were far cheaper than in US and Europe.
Although in the last decade the salaries in India has risen manifolds but it still remaines the main destination for outsourcing simply because there is no shortage of the skilled techies.

But the current economic climate is changing the whole dynamics and the early signs are for what they call Outsourcing may be coming home.

With the rising unemployment in US and Europe and with so many people are desperate for the jobs all of a sudden companies see the pool of workers who are ready for work in far less then they were may be five years ago.

Remember no body wants to outsource if only they can get the work done at home.
In the current market situation there is a need to cut costs and increase productivity and for that reason some tech companies are looking for a new approach that bypasses traditional overseas locations like India.

One company who has taken a lead in this is IBM who is focussing on two U.S. communities which are East Lansing, Mich., and Dubuque, Iowa. This could be a trend setting move which other could follow very soon.

IBM believes that in these places there is access to skills also there is a willingness of local universities to cooperate with their business endeavours, and some government incentives to make it economically worthwhile. IBM hopes to create 1,500 direct and indirect jobs in five yearsin East Lansing, Mich and 1,300 jobs in Dubuque, Iowa.

Dubuque didn't just open the door and invite IBM into town but they also offered Big Blue (IBM) an enticing package of incentives worth $55 million over 10 years. These include a loan of $11.7 million that will be forgiven if IBM fulfils its hiring pledge. A local development agency also will spend $25 million to rehab an historic former department store.

Another major factor which is contributing towards bringing the jobs back to US from India is the stimulus package considered by the new president Obama. Although it has not been passed yet by the Congress, Obama has repeatedly discussed IT spending together with the rebuilding the US’s crumbling roads, bridges and schools.

I remember back in early 90’s when India opened its economy to go global one of the first companies to make use of the cheap and skilled science graduate was IBM.
For years India has been the primary location for technology outsourcing not only for IBM but other major tech companies as well.

This all seems to be changing now and the cycle seems to reversing.

It’s not only US but the Europe as well, which is going to get benefited by this reverse in trend. One of the astonishing thing which I came across just last week is that the Japanese companies who has R&D centres in UK are now considered as a cheaper options as compared to the ones in Japan. With the value of British pound fallen so much in the last six months the work force in UK all of a sudden becomes cheaper.

Could this be a new trend?

Industry analysts expect more tech services companies to establish operations in low-cost parts of the U.S and Europe.

I believe that in the coming months and years you'll see more of this although it might not be huge, but it will be a nice niche.

Wednesday, 21 January 2009

Nortel bankruptcy creates worry for 2010 and 2012 Olympics


Everybody by now knows what happened to Nortel. On 13th January Canada's Nortel Networks filed for bankruptcy in Delaware under Chapter 11 and Chapter 15 guidelines.
Nortel has been struggling financially from the past couple of years and was cutting jobs at regular intervals. Toward the end of the year, the Toronto-based company was warned of a possible de-listing from the New York Stock Exchange.

The Chapter 15 filing enables a company to seek a U.S. bankruptcy court's recognition of a foreign bankruptcy case as the main or controlling proceeding.

There might be some potential buyers for Nortel but let’s see what happens in the coming days.

Nortel Networks at the moment is of course the topic of much conversation and speculation. In my view following are the key issues which Nortel has to deal with in the immediate future:
  • It might loose some of it major partners, like Microsoft and how does the bankruptcy will affect its smaller partners, like Airvana,

  • How long it can hold onto skilled talent in places like Ottawa, Ontario, and Richardson, Tex, and,

  • Where the company should continue to focus its product energies as its fate plays out.
These events have affected many in the industry but one of them in particular is the organizers for the 2010 Vancouver Winter Olympics and the 2012 London Olympics. Remember Nortel is the official sponsor for these two Olympic events and any trouble in Nortel is to stimulate significant trouble for these events.

Although Nortel Networks says, at least for now and before the bankruptcy court gets involved, that it remains committed as a sponsor and official network infrastructure provider to the 2010 Vancouver Winter Olympics and the 2012 London Olympics.

Back in July, Nortel signed up as a Tier One Olympic sponsor, and, to support the London Olympics. In addition to million of dollars in cash, Nortel also committed to provide the network infrastructure for communications in cooperation with British Telecom for the 2012 Olympics.
At the moment Nortel is giving every signs to reassure its commitment to the games as a 'tier-one' local sponsor and official network infrastructure provider for the London games.
Under the London sponsorship deal, Nortel is to supply network infrastructure, including secure networks, local wireless networks, call center and fixed landline infrastructure to support more than 205 international sporting organizations, 20,000 members of worldwide media, 9 million spectators, and "billions" of television viewers.

This looks quite staggering so just imagine the scenario where Nortel can’t fulfill its commitment.
Just like it has done with the 2012 organizing committee, Nortel is assuring the Vancouver Olympic organizing committee that it will stand behind its commitment to the 2010 Winter Games.

It does makes sense that Nortel fulfill it’s commitment I think it would be able to do so as much of Nortel's support has already been delivered and is expected to be in place by May.

Sunday, 18 January 2009

What lies ahead in year 2009

In the year just gone i.e. 2008 we saw some unprecedented economic situations. I can clearly say that I have never seen anything like that but then I’m too young to say that anyway -:))

Talking to more experienced people in the industry I came to the conclusion that this recession indeed one of the worst one.

It's a very tough economic climate out there and there an every chance that no one will be reprieved by its effect. What I men by that and even if you haven't been touched by the downturn thus far, you will be. There is an argument that IT or technology shop has some advantage over other departments which makes sense as well as I can rarely think of a business these days which doesn’t use telecoms these days. Nevertheless, it would be unthinkable not to be wearing your flak jacket at all times.

Jos losses have started to happen in telecoms now with the likes of Motorola, Nortel already involved in this procedure. More than 50,000 tech workers lost their jobs before the financial meltdown hit, and more jobs may soon be axed.

Everyday we see ourselves into more gloom and doom with more bad news coming our way. Even India is getting affected by this and especially after what happened Satyam. The Satyam scandal had shocked India specially the IT world. This has definitely not helped to boost up the confidence with some of the IT companies shares plunging. The Satyam scandal what many has labeled as India’s Enron has put a big doubt into investor’s mind which is a very serious concern.
In way this scandal has done woken up many and will do some good in the future. Telecom companies are working feverishly to get their balance sheet right and hence already started taking drastic measures. I view it like this where everybody is anticipating a tsunami and to save themselves from high waves they are already moving onto high grounds.

I myself is involved in the situation where the salaries of the staff are frozen for at least one year. I believe any measure taken now although painful is a right thing to do. So when tsunami comes the high waves may not do the much damage and if doesn’t then it’s even better.
Companies are in the mindset of not spending in the coming months and plans to invest only in what it call key projects but with an increase of only 1 or 2 percent in the next 12 months.
LTE is considered as one of the key area of development but at the same time provide immense dilemma as well. Companies are no doubts thinking of concentrating on the current projects which guarantee a source of revenue but then want to spend in LTE product as well so that they are not behind when the good times begin.

People with high skills especially in wireless and VoIP may have got good chances of just clinging on to their jobs.

Remember everybody would need the skilled people when good times come back so it’s in companies interest to freeze the salaries instead of making make people redundant.

It's important, above all, to keep your skills at top form and be flexible with an employer going through tough times.

In the end I will mention the line from Judi’s blog which is
“Remember, don't panic. The trains cannot run without you”

Tuesday, 22 January 2008

2008: Which Technologies?


There are many tecchnologies being standardised or about to be rolled out this year. A summary of these along with the predictions are available on RCR News website:
WiMAX Certifications: As promised, the WiMAX Forum opened up its labs in December for mobile WiMAX certification testing. The expectation is that 802.16e-based products will start earning the forum’s stamp of approval by mid-year with, “hundreds of devices to go through certification,” over the course of the year. The larger hope is that certification will drive operators currently testing the technology (300-plus by some estimates) into broader, commercial deployments.

In reality, certification may be little more than a formality. Why?

1) Operators wouldn’t be deploying kit that they didn’t think complied (at least somewhat) to the 802.16e standard and WiMAX Forum profiles.

2) The forum’s plugfests have helped to get vendors roughly in-line in terms standards implementations.

3) Even if you don’t agree with points one and two, consider the following: Some so-called mobile WiMAX products may never get certified. Implementations in potentially popular bands such as 5 GHz or 1.5 GHz may always remain relative niches, never garnering enough interest from vendors to warrant the creation of WiMAX profiles in these bands. And, while Taiwan is oft painted as a hotbed of WiMAX device development, vendors there are reportedly bristling at the prospect of costly certification testing, setting the stage for certification delays or two tiers of products (fully certified and compliant, but not certified). Now, that would be buzz-worthy.

Long Term Evolution: If only in trade shows, WiMAX and LTE seem inextricably linked — usually separated by the word, “versus.” And, as with WiMAX, the LTE market will steadily develop throughout 2008. Tradeshow booths will be filled with prototype LTE systems. The 3GPP should make progress on getting the standard completed. Trials (based on finalized radio interface specs) will take place. Additional operators will declare their allegiance to 4G. Yep, it will be a good year for LTE … and we’ll hear about it often. None of these trials or demos, however, will change the facts. Commercial kit won’t be available until sometime next year; until then, we won’t know how any vendor’s solutions actually perform. Broader field trials will likely be a 2010 phenomenon given the habit of device availability trailing networks by a good margin. This means that commercial service deployments might be expected in the 2011 timeframe. Considering the fact that operators will continue to ramp up 3G usage, that might even be optimistic. So, at the end of the day, enjoy the show floor demos, pick up a few flashing toys for your kids at home and know this: The LTE landscape at the end of 2008 should look a lot like it did at the end of 2007. LTE will be broadly accepted as a dominant 4G standard, but services will be years away and real-world performance will be a question mark.

Note: On referring LTE to 4G please read this and this.

700 MHz spectrum: With all due respect to my troglodytic (cave-dwelling for those didn’t get My Word Coach for your Nintendo this Christmas) friends, the FCC’s 700 MHz auction begins later this month. In the run-up, intrigue around who will bid, how much they will bid, and the bidding/service rules they will face has provided fodder for nearly daily news. Once the bidding begins, we’ll get day by day (and hour by hour) updates on the auction process and what it means for the U.S. telecom landscape. I personally plan to avoid the fray by being in the middle of the ocean when the auctions start and then retreat to the West Virginia border (true story, I go from vacation to our annual corporate retreat at The Homestead). The buzz, however, is somewhat understandable, given the propagation characteristics at 700 MHz (great for broad coverage and in-building penetration), and the fact that it could support new market entrants … not to mention the potential for 700 MHz developing into globally standardized wireless spectrum.

But, what’s going to happen this year? Auctions will take place and spectrum will be allocated. Networks, however, won’t get deployed; I’m planning to continue watching analog TV with my old rabbit ears right up until I can’t anymore. More importantly, operators looking to 700 MHz as a platform for their 4G networks may need to wait for several years before they can even get access to the equipment they need (see rant above).

And, the value of propagation and global standardization? The prospect of 700 MHz spectrum being available around the globe will doubtless bid up the value of the band here in the U.S. and price me out of winning the B-Block CMA covering my house.

Yet, it will take years, if ever, before other countries can move on the band. By that point the costs of developing multi-band devices should be lower, perhaps thanks to innovations like software-defined transceivers. At that point, any operator building out a 4G network should be building for capacity and FMC solutions leveraging Wi-Fi or femtocells (or something we haven’t yet heard of) should solve most of our in-building coverage problems (cue the anti-femtocell rhetoric).

Femtocells: Speaking of femtocells … I like femtocells. I even have one on my desk; it’s a mostly-empty mock up handed to me last year as one of the industry’s pioneers was looking to empty out their booth at the end of 3GSM (back when it was still called 3GSM). 2008 should be a banner year for the little boxes since trials will start taking place beyond the more limited moves in 2007. These trials, in turn, will be critical for providing insights into how (or if) the products work. Just as we’ve heard about most major femtocell RFPs and commitments, we’ll hear about these trials as they move forward (often thanks to tradeshow sessions). What these trials won’t do is provide any immediate answers.

Yep, 2008 will be a year of figuring out what makes sense: the best business models, the best mobile core integration options, the best device management strategies, the best interference mitigation strategies, the reality of zero-touch installations, the tradeoff between products filled with bells and/or whistles and a bill-of-materials that can support profitable services. To this end, Sprint Nextel deserves credit for getting the ball rolling early, deploying commercial services instead of waiting for others to figure it all out. Yet, for all of the femtocell buzz (some of it warranted), 2008 will be largely about setting the stage for 2009.
More of it here.