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stephencooke
stephencooke
12/5/2012 | 4:07:41 AM
re: Nortel & Huawei: Broadband Buddies
I think this is a great idea and, if blessed with good execution, should do well for both parties.

One of the biggest difficulties that I see, that is generally not obvious to those with a purely business focus, is language. Time-to-market will be negatively affected as products are adapted for new opportunities do to the fact that the Huawei design documentation is likely in Chinese (Mandarin?) and any Nortel designers who try to make changes, unless their grasp of Mandarin is excellent, will have difficulty. This is a low-level difficlty that can have serious impact on high-level deliverables.

The point here is that this will be an interesting exercise in design politics. At a high level this looks like it makes good sense to me. I hope they can pull it together and make it work.

Steve.
futureisbright
futureisbright
12/5/2012 | 4:07:41 AM
re: Nortel & Huawei: Broadband Buddies
common set of objectives.

The issue with most JVs is that the particpants have different objectives, and asymetric power.

In this case, Nortel wants access to low cost products, Huawei to the NA market. Who is this a temporary arrangement for, Nortel or Huawei? Who will be the first out, Nortel or Huawei?

In my external view, Huawei is in the driver seat. In the process they will gain exposure for their products in the NA market. If the JV collapses, they will address the customers directly. If it does not, they will want to acquire it completely.

Nortel offers a sales infrastructure to the market. To be successful, the JV will need a dedicated sales force for the product line. If the JV collapses, how long willt he sales force stick?

Interestingly, Nortel is the majority owner of the JV, basically balancing out Huawei's leverage. Maybe they'll become a distributor of other companies' products, just like Lucent.


digits
digits
12/5/2012 | 4:07:41 AM
re: Nortel & Huawei: Broadband Buddies
Scott Clavenna at Heavy Reading has doubts whether any JV can work, so what would it take to make this partnership deliver some useful, competitive goods?
paolo.franzoi
paolo.franzoi
12/5/2012 | 4:07:41 AM
re: Nortel & Huawei: Broadband Buddies

Generally, I think either a major customer opportunity or a specific market opportunity drives that common set of objectives.

Take a look a the Access section of the Huawei website. They have:

- A BLC: Hmmmm Ciena (Catena) can't make a dent, where will that be sold? The IOCs? Nortel is going back to the DLC market in the IOCs? That will go over like a fart in church. They have to completely rework the CO Voice Interfaces before they have a product.

- An IP DSLAM: Okay, who are they displacing and in what customers? The big guys have all picked their access architecture for the some time. Anybody see any major RFPs coming?

- A BRAS: Going after whom again? The major customers have their choices.

- An IP Voice Gateway: See the MG9000. Nortel has a product in this space for sale with the CS2000.

- An Active FTTH Product: Go after the municipalities? There is an EPON variant? Again, to whom? Bell Canada and Telus?

The biggest news out of this is the death of the Calix/Nortel relationship is in the public domain.

seven
paolo.franzoi
paolo.franzoi
12/5/2012 | 4:07:40 AM
re: Nortel & Huawei: Broadband Buddies

Stephen,

Take a look around. Requirements change and the vendors stay. Take a look at Alcatel. There is simply no way that they are getting booted out of the AT&T business. They are in too deep.

The position you are taking are the way things used to work. Things are different now. The winners are in at the beginning and it is basically winner take all. There are very few times that vendors get replaced and even second sourced nowadays.

seven
paolo.franzoi
paolo.franzoi
12/5/2012 | 4:07:40 AM
re: Nortel & Huawei: Broadband Buddies

That is if the GPON product from the yet to be made from the yet to be completely formed JV is available 1st half of this year. After that, products are selected and the JV need not apply.

seven
stephencooke
stephencooke
12/5/2012 | 4:07:40 AM
re: Nortel & Huawei: Broadband Buddies
Seven,

What makes you think that all the vendor selections will be completed by the first half of this year? RFPs aren't the end of the ballgame as I am sure you know. This is not to mention that requirements change, often during the RFP and implementation process.

I wouldn't write them off so easily. On another note, the article seems to have a more international flavour as if their main targets are outside of NA.

Steve.
bw
bw
12/5/2012 | 4:07:40 AM
re: Nortel & Huawei: Broadband Buddies
All know that there are significant activities in GPON push in NA ROBCS, such as Verizon, SBC, etc., potentially worth billions of dollars in equipment deployment spending., over coming years. Neither Nortel, nor Huawei are at a short list now, not yet any way. This JV may aim to push into the short list now include Alcatel, Mot, Tellabs.. as top tier player..
ozip
ozip
12/5/2012 | 4:07:39 AM
re: Nortel & Huawei: Broadband Buddies
I have been lucky (or unlucky) to have multiple engagements with Huawei in a couple of deals. I guess I would point to the latest 3Com quartely report. In case you didnt know, 3Com breaks out the Huawei products. After almost 2 years, $20M in the switching/routing market, does that even cross the 1% share threshold?

I wish the Canadians luck but I fear they will be eaten alive.....

OZIP

------------------------------------------------
Revenue from Huawei-3Com-sourced products sold by 3Com grew by 37 percent sequentially to more than $20 million. This growth resulted from continued traction with the 5500 line of Layer 3 switches, particularly the successful introduction of the Gigabit and Power over Ethernet models. Revenue from the joint venture-sourced products quadrupled on a year-over-year basis.
paolo.franzoi
paolo.franzoi
12/5/2012 | 4:07:39 AM
re: Nortel & Huawei: Broadband Buddies

Stephen,

Actually in the RBOC world there was an RFP for all product categories every 3 years. Now basically there is an allocation at the start of the program. Then they do the next program.

Unless a startup has unique technology that is mandatory for an RBOC (read Redback and Pairgain as examples), there is no point in them showing up without "a big partner". Even then its a crapshoot.

seven
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