Tellabs Backs Off From the Mobile Core
The mobile core was going to be a tough sell for Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA), so it's not a shock that the company is halting development on the SmartCore 9100, says Patrick Donegan, senior analyst with Heavy Reading.
It was the company's second most dramatic announcement Tuesday, after layoffs, and it was a predictable end for the platform, Donegan says. (See Tellabs to Restructure, Cut 530 Jobs.)
The problem is that the 3G Gateway GPRS Support Node (GGSN) and the LTE Evolved Packet Core (EPC) are already offered by vendors that are a bigger deal in mobile networks.
"They either had to persuade Ericsson AB (Nasdaq: ERIC) and Nokia Networks to resell the platform, making their end-to-end 3GPP roadmap heavily dependent on another company's execution. Or they had to persuade operators to buy their GGSNs and EPCs directly from them, when NSN and Ericsson could always discount their own [gear] heavily as part of an end-to-end mobile network sale," Donegan writes in an email to Light Reading.
"Not very surprisingly, they didn't get traction with either channel. Too bad; it was certainly ballsy."
So, it looks like Tellabs is stepping away from the mobile core, with the exception of the 9100's WiMax installed base, which the company will continue to support. Tellabs does have the SmartCore 9200 router in the wings, but it's not a purebred 9100 descendant, as a lot of its software was derived from Tellabs's 8600 and 8800 router families. (See Tellabs Smartens Up Its Routers.)
The 9200's big trick is to allocate processing cycles to a variety of applications, so it could run a mobile core. But the 9200 is nowhere close to market and is still taking baby steps. Tellabs shipped its first trial versions of the box last quarter, but with "very preliminary software," Tellabs CEO Rob Pullen said on Tuesday's earnings call. "I underline 'very,'" he added. (We prefer the italics, but, whatever.)
Pullen doesn't expect to get revenues from the 9200 until 2013. He said it's possible some revenues could arrive this year, but it sounded like he meant it in the same sense that it's possible for your neighbor to hand you Super Bowl tickets tomorrow.
— Craig Matsumoto, West Coast Editor, Light Reading