& cplSiteName &

'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.
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
What WTTX Can Deliver

2|23|17   |     |   (0) comments


Mohamed Madkour explains the benefits of WTTX while Dimitris Mavrakis discusses the challenges of delivering home broadband access.
LRTV Custom TV
Huawei on Mobile Broadband

2|23|17   |     |   (0) comments


Mohamed Madkour shares his vision on MBB for the next three years.
LRTV Custom TV
Analysys Mason Talks About the Future of Digital Operations

2|23|17   |     |   (0) comments


The future of digital operations has three key aspects: 1. Highly automated operations for both service and network; 2. Highly converged BSS/OSS for business and resources; 3. Highly merged management and control for real-time cloud native operations.
LRTV Interviews
Software Trends in the Telecom Sector

2|23|17   |   03:40   |   (0) comments


Heavy Reading senior analyst James Crawshaw talks with Telecoms.com Editorial Director Scott Bicheno about trends and developments in the telecoms software sector and what to expect at MWC 2017.
LRTV Custom TV
Huawei's Pre-MWC Analyst Briefing 2017 Highlights

2|22|17   |     |   (0) comments


Huawei shares its vision for this year's MWC.
LRTV Interviews
MWC17: 5G, Cloud RAN & More

2|21|17   |   04:35   |   (0) comments


Ovum Senior Analyst Julian Bright talks to Scott Bicheno from Telecoms.com about all things MWC, including Cloud RAN, Huawei's pitch to the industry and the road to 5G.
LRTV Interviews
MWC 2017's Key 2-Letter Terms

2|20|17   |   08:29   |   (1) comment


5G, AI, VR... these are just some of the two-letter terms that will dominate show-floor chat at MWC 2017 in Barcelona, according to these two blow-hards (a.k.a. Scott Bicheno of Telecoms.com and Light Reading's Ray Le Maistre). And then there's PB...
LRTV Interviews
Key Trends for Mobile Operators in Developing Markets

2|20|17   |   06:37   |   (0) comments


Ovum's Matthew Reed talks to Scott Bicheno from Telecoms.com about the challenges and opportunities facing mobile operators in the developing markets of Africa and the Middle East.
LRTV Documentaries
YouTube Takes on Facebook Live-Streaming

2|17|17   |     |   (0) comments


Popular 'YouTubers' will be the first to get the new service on their smartphones. You have been warned.
LRTV Custom TV
Open Source NFV/SDN Automation

2|17|17   |   05:54   |   (0) comments


AT&T ECOMP (Enhanced Control, Orchestration, Management and Policy) code is transitioning into the Linux Foundation for placement into open source. In this video, Carol Wilson provides an update on the maturation of open source ECOMP and meets with industry leaders from AT&T, Bell Canada, Orange, Linux Foundation and Amdocs to discuss what this means for the ...
LRTV Documentaries
Uber & NASA Collaborate on Flying Car Project

2|16|17   |     |   (0) comments


Is Uber for real? Well, it's hired NASA engineer Mark Moore to lead the project, and he wouldn't come cheap.
LRTV Documentaries
Zuckerberg Tries Out the Oculus Rift VR Glove

2|15|17   |     |   (0) comments


Facebook CEO shows off a new way to interact with the Oculus Rift virtual reality headset: an Oculus glove.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Broadband Has a Problem on the Pole
Mari Silbey, Senior Editor, Cable/Video, 2/21/2017
Is the Time Right for a Cisco/Ericsson Wedding?
Ray Le Maistre, Editor-in-chief, 2/17/2017
Uber's HR Nightmare: Company Investigates Sexual Harassment Claims
Sarah Thomas, Director, Women in Comms, 2/21/2017
Verizon to Start Fixed 5G Customer Trials in April
Dan Jones, Mobile Editor, 2/22/2017
Nice to See at Least One CSP Taking My Advice
Mitch Wagner, Editor, Enterprise Cloud, 2/17/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
No One Likes This Click Here
Take a hint!
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.