Light Reading
China Mobile's ongoing 100G deployment is set to boost the financial health of several optical firms.

'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
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.
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
Wagner’s Ring
Data Centers Drive Telcos Into the Future

8|28|14   |   2:20   |   (2) comments


Data centers are at the heart of key trends driving telecom -- network virtualization, the drive for increased agility, and the need to compete with OTT providers.
LRTV Custom TV
Why SPs Should Consider Cisco's EPN

8|27|14   |   5:40   |   (0) comments


Sultan Dawood from Cisco discusses Cisco's EPN, which enables SPs to build agile and programmable networks delivering new network virtualized services using Cisco's Evolved Services Platform (ESP).
LRTV Huawei Video Resource Center
Huawei’s Showcase @ Big Telecom Event 2014

8|26|14   |   2.56   |   (0) comments


SoftCOM is Huawei's framework for telecom business and network transformation. Haofei Liu, Solution Marketing Manager, Carrier Business Group, Huawei, showcases Huawei's SoftCOM architecture in this video.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of Integrated Solutions on SoftCOM & NFV Monetization

8|26|14   |   4.43   |   (0) comments


Libin Dai, Director of Integrated Solutions, Carrier Business Group, discusses Huawei's SoftCOM and NFV monetization. Huawei believes that NFV monetization should be service-driven rather than network-driven, and that operators should have network transformation, service transformation and a compatible and collaborative ecosystem in place in order to deploy NFV.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of US NFV Lab on CloudEdge & the Future of NFV

8|26|14   |   4.06   |   (0) comments


Sean Chen, Director of US NFV Lab at Huawei, discusses Huawei's new approach to NFV in open collaboration. Huawei believes that through Proof of Concept tests, it could help operators learn and communicate with the industry more effectively. Sean believes that successful implementation of NFV should have its values reaching to end users and discusses how Huawei's ...
LRTV Huawei Video Resource Center
Huawei's Highlights @ Big Telecom Event 2014

8|26|14   |   3.34   |   (0) comments


At the Big Telecom Event in Chicago Huawei showcases its high-level strategy, the SoftCOM architecture, which helps operators reduce the cost of ownership of their network infrastructure and generate additional revenue in the ICT service environment. Huawei showcases over 30 pilot programs from across the globe, focusing on the industry-leading commercial ...
LRTV Custom TV
VeEX – Live from the Show

8|21|14   |   5:58   |   (0) comments


An overview of VeEX Test and Measurement solutions including TX300S multi-service test set with VeExpress cloud-based management system, UX400 universal modular platform supporting 100G testing, and the redesigned RXT modular platform.
LRTV Custom TV
Transitioning CE 2.0 Networks Into the SDN & NFV Era With Telco Systems

8|19|14   |   5:19   |   (0) comments


Telco Systems' Ariel Efrati (CEO) and Moshe Shimon (VP of Product Management) discuss virtualization and how the company's new Open Metro Edge solution utilizes the SDN and NFV concepts to accelerate and orchestrate service delivery through its innovative product portfolio and software applications.
LRTV Custom TV
NFV Myths: Is NFV Still Several Years Away?

8|11|14   |   1:13   |   (0) comments


Some say that NFV (network functions virtualization) is still several years away from being implemented on mobile operator networks. This isn't the case. Operators can get started on their paths to NFV now, as this short video from Skyfire shows.
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
A survey conducted by Vasona Networks suggests that 72% of mobile users expect good performance all the time, and they'll blame the network operator when it's not up to par.
Today's Cartoon
Hot Topics
Rogers, Shaw Take Aim at Netflix
Mari Silbey, Independent Technology Editor, 8/26/2014
Utilities to Pump $11.2B Into Smart Grid – Study
Jason Meyers, Senior Editor, Utility Communications/IoT, 8/26/2014
Verizon Launches QR Code Security Solution
Carol Wilson, Editor-at-large, 8/26/2014
Nokia's Maps Land on Samsung Devices
Sarah Reedy, Senior Editor, 8/29/2014
Verizon to Launch HD VoLTE in 'Coming Weeks'
Sarah Reedy, Senior Editor, 8/26/2014
Like Us on Facebook
Twitter Feed