& 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.
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, September 14, 1:00PM EDT
What Is Agile?
Kent J. McDonald, Product Owner, Agile Alliance
UPCOMING COURSE SCHEDULE
Friday, September 16, 1:00PM EDT
How to Implement Agile
Alan Bateman, Director, Agile Transformation
Wednesday, September 21, 1:00PM EDT
What Is DevOps?
Colin Kincaid, CTO, Service Provider, Cisco
Friday, September 23, 1:00PM EDT
How to Implement DevOps
,
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
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.
Between the CEOs
CEO Chat: UXP Systems' Gemini Waghmare

8|26|16   |     |   (0) comments


Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
LRTV Custom TV
F5 Virtual Network Function Integrations With Partner Orchestration Platform

8|24|16   |   6:38   |   (0) comments


F5's Kishore Patnam, product manager for F5's service provider solutions, discusses why service providers are moving towards virtualization and how his clients are utilizing F5's solutions.
Between the CEOs
CEO Chat: Intel's Alexis Black Bjorlin

8|17|16   |   06:23   |   (0) comments


Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Telecom Innovators Video Showcase
Accelerating Telecom Digital Transformation With Nominum DNS

8|1|16   |   12:04   |   (0) comments


Light Reading's Steve Saunders gets an update from Nominum CEO Gary Messiana on how his company is helping carriers on the digital transformation journey.
LRTV Custom TV
Reinventing Operations for a Virtual, Software-Defined World

7|28|16   |   5:23   |   (0) comments


Heavy Reading Senior Analyst Jim Hodges speaks with Accenture's Larry Socher and Matt Anderson about what service providers must do to transform their business to get the benefits of SDN and NFV including: leveraging DevOps, introducing real-time OSS and implementing analytics.
Women in Comms Introduction Videos
Fujitsu Sales Leader Shares Lessons Learned

7|27|16   |   5:12   |   (1) comment


As Fujitsu's only female sales leader, Annie Bogue knows the importance of asking for what you want, being flexible (she's been relocated five times), keeping a meticulous calendar, 'leaning in,' working harder than everyone else around you, being aware and more.
Telecom Innovators Video Showcase
VeEX Test & Measurement Solutions

7|25|16   |   08:57   |   (0) comments


Cyrille Morelle, president and CEO of VeEX Inc., talks test and measurement with Light Reading's Steve Saunders at BCE 2016. This includes innovative products such as VeSion Cloud-Based platform for network monitoring; MTTplus Modular Test platform for Access, Business, Carrier Ethernet, Transport and Core services; and OPX-BOX+ for Fiber Optics.
LRTV Custom TV
VeEX: Live From BCE 2016

7|25|16   |   03:20   |   (0) comments


VeEX's Senior Director of Business Development, Perry Romano, explains how VeEX provides tools to help install, maintain, monitor and manage network infrastructure efficiently and effectively. The portfolio of products on display include the RXT-6000, MTTplus and TX300s.
LRTV Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments


Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (2) comments


In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (2) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Cisco Developing 'Monica' Digital Assistant
Mitch Wagner, West Coast Bureau Chief, Light Reading, 8/22/2016
FirstNet: A Billion-Dollar Boondoggle?
Dan Jones, Mobile Editor, 8/26/2016
WiCipedia: Should Men Be Included? & Olympians Face Discrimination
Eryn Leavens, Special Features & Copy Editor, 8/26/2016
Google Fiber Can't Be Called a Failure
Carol Wilson, Editor-at-large, 8/26/2016
Google Fiber Downsizing Not Confirmed
Mari Silbey, Senior Editor, Cable/Video, 8/25/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
Live Digital Audio

Bridging the tech skills gap is a major challenge for service providers and suppliers alike today – and the challenge is two-fold when it comes to increasing the number of women in the comms space. Level 3 Communications has made it a priority to overcome both challenges by implementing several unique programs focused on building the right candidates from within – in addition to filling the funnel by supporting STEM and other education programs. During this radio show, you’ll learn about these programs from Mary Beth McGrath, SVP of Global Talent Management at Level 3, and the best ways to bridge your own skills gap so that you are motivated and equipped for change. Plus you’ll have the chance to ask Mary Beth your questions live on the air.