Ciscosson Looks to WiFi for 2017 Boost
Network equipment makers Cisco and Ericsson say they have extended their strategic partnership into the WiFi arena, today unveiling a new WiFi offering under the brand name of Evolved WiFi Networks (or EWN).
The apparent aim is to address the growing demand for connectivity at venues such as sports stadiums and shopping malls amid rising interest in the potential of the unlicensed-spectrum technology.
As cellular networks become increasingly congested, Cisco Systems Inc. (Nasdaq: CSCO) is predicting that as much as half of all IP traffic will be carried over WiFi networks by 2020.
Both vendors are looking for a boost from new technologies and market opportunities as some of their traditional customers reduce spending on network gear and services.
Earlier today, analyst firm MKM Partners predicted that spending on wireless equipment would decline in 2017 compared with 2016, although many operators have yet to provide details of capital expenditure plans this year. (See Welcome, Capex Disclosure Season.)
Notwithstanding those concerns, the EWN product could appeal to mobile and cable operators keen to add new WiFi capabilities to their offerings. But Cisco and Ericsson AB (Nasdaq: ERIC) also see an opportunity to attract new customers from other vertical markets -- such as retail outlets and the owners of public venues.
The companies say EWN will allow their customers to deploy both WiFi and cellular technologies when rolling out indoor small cells. And operators that already rely on Ericsson's access network expertise will be able to offer WiFi services to customers based on Cisco's WLAN (wireless local area network) technology.
In addition, the latest joint offering is designed to let customers "steer" traffic between mobile and WiFi networks to improve the user experience.
Ericsson says it is integrating Cisco's WLAN technology into its packet core, which means that service provider customers will be able to offer all core network services over WiFi for multimode devices.
Today's news is the first major product update in several months from the "Ciscosson" partnership -- which took shape in late 2015 -- and comes amid concern about the outlook for Ericsson this year. (See Beginning of the End for Ericsson? and Cisco + Ericsson: From Soup to Nuts.)
The Swedish vendor parted company with erstwhile CEO Hans Vestberg last July, following a sequence of disappointing earning results, and incoming replacement Börje Ekholm, who takes charge later this month, has so far revealed few details of his plans. (See Ericsson Appoints Investor AB's Ekholm as New CEO and Ericsson Ejects CEO Vestberg.)
Further cost cutting looks set to be a priority, however, raising speculation that Ekholm may be preparing Ericsson -- or parts of it -- for an eventual sale, with Cisco an obvious candidate to acquire assets. (See Cost Cutting Must Continue, Says Ericsson's New CEO and Is Ekholm Ericsson's Savior or Seller?)
Among other things, Cisco and Ericsson appear to be on opposite sides of the fence when it comes to intellectual property for so-called standards-essential patents. According to Heavy Reading, the market research arm of Light Reading, Cisco is a member of an organization called the FairStandards Alliance, which is pushing for a reduction in royalty rates, while Ericsson is a part of another group -- the IP Alliance -- that is fighting to protect them. (See Patents Prizefight Pending: Clash of the Tech Titans.)
Whatever happens regarding their partnership in future, Cisco and Ericsson are likely to encounter fierce competition when promoting EWN.
Rival Nokia is similarly targeting opportunities in new vertical markets and eager to expand sales of equipment to companies making use of unlicensed spectrum. (See Nokia: A Global Network Operator for the Enterprise? and Nokia's Leprince Wants to Be King of Enterprise.)
Facing tough competition from China's Huawei Technologies Co. Ltd. , along with a cyclical and economic slump, both Ericsson and Nokia are forecasting a contraction in addressable market revenues this year. (See Is Huawei in for a Bumpy 2017?)
— Iain Morris, , News Editor, Light Reading