x
SDN architectures

Top 5 Telecom Fiascos of 2014

3) Juniper CEO exits ignominiously
The year started well for new Juniper Networks Inc. (NYSE: JNPR) CEO Shaygan Kheradpir. Only days into his new job in January, Kheradpir announced a new direction for the company, the "Integrated Operating Plan." (See Juniper CEO Preps New Roadmap.)

Ten months later, Kheradpir was out on his keister, following a "review by the board of directors of his leadership and his conduct in connection with a particular negotiation with a customer." (See Turmoil at Juniper as CEO Quits.)

The board gave the job to Rami Rahim, a 17-year Juniper employee, previously executive vice president and general manager of Juniper Development and Innovation. Rahim will be paid up to $14.5 million for the job. Kheradpir was eligible for up to $34.8 million. (See New Juniper CEO Can Be Thankful for $14.5M.)

Hopefully, Rahim will stick around long enough to at least hang some family photos on the walls of his office.

2) Aero crashes on the runway
Aereo Inc. could've disrupted the video business in a big way with its business of delivering a personalized DVR in the cloud. But it bet everything on a single court ruling -- and lost.

This is Aereo's business arc, metaphorically:

The US Supreme Court crashed Aereo when it ruled the company's system of using dime-sized antennas to capture over-the-air (OTA) TV signals and then deliver them to consumers as individual online streams was equivalent to creating a public performance. The court said Aereo needed to pay retransmission fees to broadcasters, just like any cable TV, satellite TV or telco TV provider. (See Supreme Court Halts Aereo's Flight.)

That pretty much finished off Aereo. The company halted service to subscribers the week after the decision. (See Aereo Presses Pause… for Good?.)

In a struggle to survive, Aereo sought and was denied status as a cable operator and sought status as a pay-TV operator. (See Aereo's Cable Status Denied by Copyright Office and Aereo Seeks Pay-TV Operator Status.)

Aereo finally went into Chapter 11 in November. Unlike Family Guy and Futurama, we don't expect this canceled program to come back to life. (See Last Chapter (11) for Aereo.)

1) Cisco sues Arista
Arista Networks Inc. gets the weirdest lawsuits.

The 10-year-old company took its time filing for an IPO, building up a solid networking business among service providers, cloud providers, hyperscale data centers and the biggest of the Fortune 500. Arista built an impressive customer base -- Microsoft Corp. (Nasdaq: MSFT), Facebook , Citigroup , Comcast Corp. (Nasdaq: CMCSA, CMCSK), Equinix Inc. (Nasdaq: EQIX), ESPN Internet Ventures and Rackspace among them.

Arista's conservative approach to an IPO is refreshing in this era when kids barely old enough to shave are in a rush to cash in with silly social media apps.

But Arista's IPO filing in March revealed a legal threat from OptumSoft Inc. , which claimed "breaches of confidentiality and use restrictions" pertaining to Optumsoft products.

The weird part: Optumsoft was founded and still owned by Arista Co-Founder David Cheriton, who quit the Arista board a few weeks before Arista filed for IPO. The David R. Cheriton irrevocable trust, set up by Cheriton for his children, was still Arista's biggest stockholder at the time of the IPO.

Next Page: More Arista malarkey and dishonorable mentions

Previous Page
2 of 3
Next Page
Page 1 / 2   >   >>
briandnewby 12/27/2014 | 10:58:32 AM
Fiascos With Sprint, specifically, am I the only one who sees it crazy that the whole reason the company pushed the merger with T-Mobile because a smaller carrier couldn't compete with AT&T and Verizon on price, and them, post-merger stoppage, Sprint has gone pricing nutzo?

There were some who believe that there may be a second chance for such a merger, but the main argument for doing so seems shot.
MikeP688 12/28/2014 | 5:06:29 PM
Re: Fiascos As I saw the advertising frenzy, I admit I was tempted--but then decided against it.    On a side note, though, I am not too sure that the Feds will actually "NOT" listen especially as they noted that some 4 Million People submitted comments--and I am happy to report that I was one of them to make sure that all the little people out there were heard :-)

 
briandnewby 12/28/2014 | 8:37:22 PM
Re: Fiascos I'm not sure the feds care about the volume of comments.  I do think it's one of those things that they'll do whatever they want to do, so if the 4 million comments support an argument, they definitely will be included.
MikeP688 12/29/2014 | 2:15:58 AM
Re: Fiascos We hope that they would listen and be responsive.    Let's be hopeful as we assess what the Feds will do in 2015.    There is no other way around it.   

Happy New Year :-) 
mendyk 12/29/2014 | 10:15:20 AM
Re: Fiascos Hi, Brian -- A combined Sprint/T-Mobile would be on equal scale footing with AT&T and Verizon, which would make the lower-cost play a lot more effective. Without that scale, Sprint is embarking on a very low-margin path that probably doesn't have the volume to make it work. As far as Top 5 fiascos go, I'd say the blocking of the merger is at the top of the list.
kq4ym 12/29/2014 | 2:10:41 PM
Re: Fiascos It was interesting the Sprint's CEO admitted "When your network is behind..." as justification for the cost cutting and bargain pricing push.

And what and when the FCC acts is going to be a cliffhanger for many just waiting for the clarification to get moving again in some certainty.
briandnewby 12/29/2014 | 5:01:31 PM
Re: Fiascos I can see how blocking the merger is a miss, but coming out swinging on price does seem like a bigger fiasco.  A low price position can only be sustained with lower costs, and Sprint specifically said it needed the merger to lower costs.

Now, some of the low-price position is more sizzle than steak, so it may not be fair to label this approach (my labeling, not yours) as a fiasco, but I do think it is fair to question the current pricing approach. 
mendyk 12/30/2014 | 8:56:11 AM
Re: Fiascos Agreed -- cutting prices and margins to gain market share works only if you're massive enough to suffer the business hit for the possible long-term gain. Sprint doesn't fit that profile. Then again, it's hard to see exactly what Sprint can do if it's intent on at least putting some market-share distance between itself and T-Mobile.
briandnewby 12/31/2014 | 9:02:25 AM
Re: Fiascos mendyk, I agree, but is the objective to put market share distance between Sprint and T-Mobile?

I'm not sure what the objective for Sprint really is, other than to be a disruptor and a cowboy, and that badge is already worn by T-Mobile.  Market share doesn't swing very quickly in wireless (it can, though, particularly in the device world because devices are durable goods and there is always the chance for a shiny new object).
mendyk 12/31/2014 | 10:36:56 AM
Re: Fiascos The goal for all right-thinking corporate officers at public companies is to "maximize shareholder value" (i.e., make the stock price go up). If Legere is hacking away at margins (one way to make the stock price go up), then logic would point to market-share gain as his plan. Unless I'm missing something, which happens now and then (and then and then).
Page 1 / 2   >   >>
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE