Light Reading

'China Hockey Stick' to Sweep Through Optical

Dan O'Shea
1/6/2014
50%
50%

Getting hit by the "China Hockey Stick" sounds like it would hurt, but many companies in the optical sector are hoping to land squarely in its path.

Needham & Co. analyst Alex Henderson writes in a research note this week that China Mobile Ltd. (NYSE: CHL)'s coherent 100G build-out -- the world's largest planned 100G backbone deployment -- appears set to take a big bite out of optical components supply and drive the health of optical sector stocks in the coming months.

Henderson writes, "There is growing evidence that China will actually implement the long discussed and much anticipated but yet to be seen 'China Hockey Stick'. China Mobile is expected to build out 13-14 thousand fiber lines between 400 cities across China."

This outlook comes a week after China Mobile started a new round of procurement for its 100G build, and companies such as Huawei Technologies Co. Ltd. , ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), FiberHome Technologies Group , and Alcatel Shanghai Bell Co. Ltd. are believed to be in line for more business after winning parts of two earlier procurement rounds last year. (See China Mobile Awards 100G Deals.)

At the components level, Finisar Corp. (Nasdaq: FNSR), which counts Huawei and Alcatel-Lucent (NYSE: ALU) as customers, has been cited by both Henderson and Raymond James analyst Simon Leopold as a possible major beneficiary. Also, semiconductor firm NeoPhotonics Corp. (NYSE: NPTN), which acquired Lapis Semiconductor last year to boost its 100G aspirations, will be looking to gain from Chinese market activity. (See The Week in 100G, NeoPhotonics Closes Lapis Deal, and Finisar, u²t Acquire 100G Tech.)

"We think opportunities at China Mobile could positively surprise in CY14 given that Huawei is the biggest beneficiary of the 100G backbone build, with Alcatel-Lucent also participating in the project as the only non-Chinese vendor," Leopold wrote in his own research note on Finisar late last week.

Henderson's research note actually centers on his downgrade of Riverbed's stock to "hold," but he takes it as an opportunity to offer some commentary on the China Mobile deployment, and on the broader market, adding, "It looks like a good year for networking and optical. We think the conditions are poised to show solid improvement in the US and Europe, which should pull along a rebound in emerging markets."

— Dan O'Shea, Managing Editor, Light Reading

(8)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
GmBroucek
50%
50%
GmBroucek,
User Rank: Light Beer
1/10/2014 | 12:29:25 AM
Re: Proof
Yes, again no mention of jdsu and their position as largest component player and supplier to all major carriers and oem's
GmBroucek
50%
50%
GmBroucek,
User Rank: Light Beer
1/10/2014 | 12:25:19 AM
Re: Proof
Yes, again no mention of jdsu and their position as largest component player and supplier to all major carriers and oem's
Balet
50%
50%
Balet,
User Rank: Light Beer
1/9/2014 | 1:56:58 PM
Re: Proof
Interesting...Finisar and Neo. Are there any other component companies left on the market from 1500+ companies in late 1990s?
DOShea
50%
50%
DOShea,
User Rank: Blogger
1/7/2014 | 9:27:45 PM
Timing
Henderson also mentioned possible timing for all of this to be February or later, and I don't believe it's clear yet exactly how many procurement rounds there will be. 
MarkC73
50%
50%
MarkC73,
User Rank: Light Sabre
1/7/2014 | 7:05:05 PM
Re: China Syndrome
If you can afford it, why not do it in one big bid, it will get you better prices and if necessary freebies and development cycles.
Ray@LR
50%
50%
Ray@LR,
User Rank: Blogger
1/6/2014 | 8:43:17 PM
China Syndrome
The way in China tends to be big bang -- do a lot, quickly. SO when the China Mobile transport hockey stick does actually come, the impact will likely be a positive burst over a relativelt short period of time, one would imagine.

If that does indeed come in 2014, will it just help to counter weakness elsewhere? or could there be a sustained period of growth for the optical sector? let's see how geniune and broad the smiles are at OFC in March... 
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
1/6/2014 | 4:45:52 PM
Re: Proof
Clearly not wrritten by me, as I would have worked in a reference to the Blackhawks. 

It's always interesting to see these bold predictions and I will be watching to see how this one plays out. 
DOShea
50%
50%
DOShea,
User Rank: Blogger
1/6/2014 | 4:37:34 PM
Proof
This story is proof that not every story at Light Reading that mentions hockey in some way is written by Carol Wilson.
Flash Poll
From The Founder
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Wagner’s Ring
Business Value Trumps Moving Bits for Virtual Networks

7|7|15   |   01:22   |   (0) comments


At the recent Open Networking Summit, carriers described how they're focused on increasing revenue rather than just improving technology. This requires cultural changes, which can be more difficult than technology changes.
LRTV Custom TV
VeEX: Live from the Big Telecom Event 2015

7|7|15   |   2:28   |   (0) comments


VeEX's Carl Goldschmidt provides new product updates, including the RXT modular test platform and TX300s. With the latest technology in pluggable physical interfaces, the RXT platform combines multiple technologies with testing range from 10 Mbit/s to 100 Gbit/s. The TX300s is an "All-in-one" advanced multi-service test platform from 64 Kbit/s to 100 Gbit/s that ...
LRTV Custom TV
Light Reading Interviews MRV: 2015 Big Telecom Event

7|7|15   |   3:45   |   (0) comments


Scott St. John, SVP of Global Sales & Service, discusses MRV's customer-centric culture, the new OptiPacket OP-X1 100G access platform, and recent customer wins with Light Reading at BTE 2015.
LRTV Custom TV
Procera: Enhancing the Subscriber Experience

7|7|15   |   4:53   |   (0) comments


Hear from Procera on the latest in Subscriber Experience solutions. Learn how Procera's RAN Perspective technology helps network operators monitor and manage network traffic, in real-time, solving congestion and other network issues.
Between the CEOs
HP's Prodip Sen: The NFV Journey

7|7|15   |   21:39   |   (1) comment


Prodip Sen, CTO of the Network Functions Virtualization (NFV) business unit at HP, talks to Light Reading founder and CEO Steve Saunders about the four stages of the NFV journey.
LRTV Documentaries
Leading Lights 2015 Winners' Video

7|7|15   |   08:34   |   (2) comments


Hear what the Leading Lights 2015 winners had to say after they picked up their awards in Chicago.
LRTV Documentaries
PSA: The Perils of a Hyper-Connected Society

7|6|15   |   1:38   |   (0) comments


A public service announcement calling attention to the perils of a hyper-connected society.
LRTV Interviews
Guavus Takes Analytics on the Road

7|6|15   |   4:09   |   (4) comments


Guavus CEO Anukool Lakhina tells Light Reading CEO and founder Steve Saunders how the analytics tools developed for telcos are applicable to the transportation industry.
Telecom Innovators Video Showcase
Mellanox's New 25/50/100Gb/s Ethernet Products

7|6|15   |   2:44   |   (0) comments


Mellanox offers a complete 10/25/40/50/56/100Gbit/s solution that delivers industry-leading performance, scalability, reliability and efficiency for optimal application performance and data center ROI.
Telecom Innovators Video Showcase
Arista's CloudVision

7|6|15   |   6:01   |   (0) comments


Anshul Sadana answers questions from Steve Saunders, Light Reading’s founder and CEO, about Arista’s CloudVision, a global cloud network controller for workload orchestration and workflow automation delivering a turnkey solution for cloud networking.
LRTV Custom TV
Red Hat Demo

7|2|15   |   10:53   |   (0) comments


Red Hat's Nicolas Lemieux demonstrates how Red Hat is driving innovation through open source communities.
LRTV Custom TV
Red Hat's Approach to OpenStack Adoption

7|2|15   |   5:17   |   (0) comments


Red Hat's Radhesh Balakrishnan outlines his company's open source strategy for both enterprises and telcos.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
All Upcoming Live Events
Infographics
Equinix walks through the past four digital economy eras from computing to network to connected to today's interconneted world.
Hot Topics
What's a Gigabit Good For?
Carol Wilson, Editor-at-large, 7/1/2015
IBM Sows Seed for New Telco Unit, Plans NFV/SDN Push
Ray Le Maistre, Editor-in-chief, 7/6/2015
What the Helio? MVNO Is Back After First Flop
Sarah Thomas, Editorial Operations Director, 7/6/2015
FCC Chairman Talks Up SDN/NFV
Mari Silbey, Senior Editor, Cable/Video, 7/2/2015
A&E Launches Lifetime OTT Service
Alan Breznick, Cable/Video Practice Leader, 7/3/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Prodip Sen, CTO of the Network Functions Virtualization (NFV) business unit at HP, talks to Light Reading founder and CEO Steve Saunders about the four stages of the NFV journey.
Casa Systems has been going from strength to strength over the last couple of years. In 2013, it became the first vendor to ship an integrated CCAP device -- the ...
Cats with Phones