EXFO's Mobile Fightin' Talk
EXFO announced the acquisition of Finnish wireless test system specialist NetHawk in mid-March, bolstering its mobile service assurance capabilities and giving it a solid position in the market for 2G, 3G, and Long Term Evolution (LTE) protocol analyzer and simulators, which are used by equipment vendors and carriers. (See EXFO Builds a Nest in the LTE Test Market.)
And it followed that by reporting record quarterly sales of US$54.1 million. (See EXFO Reports Q2.)
"Getting into wireless is a very important move for us," especially as the "fixed and mobile worlds become more intertwined -- the operators will see this as a single world, especially as Long Term Evolution (LTE) and WiFi-enabled devices allow a greater convergence of services," says EXFO's chairman, president, and CEO Germain Lamonde (clearly a multitasker).
He says NetHawk gives his company much greater opportunities in the mobile service assurance market, where it was already present with its Brix solutions. The acquisition will enable the development of new solutions that EXFO could not have developed by itself, says Lamonde. (See EXFO Monitors LTE and EXFO Builds With Brix.)
"This gives us a lot more to offer the mobile operators. NetHawk was more focused on the NEMs [network equipment manufacturers] and not so much on the operators, even though it had the products," says Lamonde, who's planning a big push with new products for carriers, including some aimed specifically at wireless backhaul. (See EXFO Assures Mobile Backhaul.)
"Expect us to be more aggressive with the mobile operators," he adds.
And, of course, the vendor will be as eager as ever to find ways to boost business with the equipment vendors too: Its recent partnership with Aeroflex for the LTE market is a prime example of how EXFO is pushing its name forward in the wireless space. (See Aeroflex, EXFO Test LTE.)
All of which sends a clear message to EXFO's rivals, particularly the market leader in the wireless protocol analyzer and simulator sector, Tektronix Inc. (EXFO is now the No. 2 player), and the myriad of companies in mobile service assurance, a key Service Provider Information Technology (SPIT) sector. (See The SPIT Manifesto.)
According to a new Heavy Reading Mobile Networks Insider report, "The Business Case Builds for Mobile IP Service Assurance," there are more than 15 players in that niche market, which EXFO believes is worth around $30 million to 350 million. (See It's the Quality, Stupid.)
Report author Tim Kridel identifies Accanto Systems , Agilent Technologies Inc. (NYSE: A), Anritsu Corp. , CA Technologies (Nasdaq: CA), Compuware Corp. (Nasdaq: CPWR), JDSU (Nasdaq: JDSU; Toronto: JDU), NetScout Systems Inc. (Nasdaq: NTCT), Spirent Communications plc , Telcordia Technologies Inc. , Theta Networks, and Tollgrade Communications Inc. as just some of the companies all vying to help mobile operators deliver the best possible data and video services. (See Vendors Tackle Mobile Data Management and Accanto Launches at MWC.)
But it's a growing market, because not only do the mobile operators face ever greater challenges in managing their networks as data traffic volumes grow, they are also starting to regard service assurance capabilities as key tools in delivering a differentiating customer experience.
"Carrier interest in IP service assurance is a subset of their overall interest in adding as much value as possible in the eyes of their customers and third parties... Service assurance is one of the few ways to escape the current race to the bottom in terms of data pricing," notes Kridel.
"The mobile IP service assurance market is in the midst of a boom in terms of carrier interest and spending," adds the analyst, but he warns that "success is not guaranteed for vendors in or considering entering this space... It is a highly competitive space. To succeed, vendors must demonstrate that they understand the nuances of IP and wireless."
— Ray Le Maistre, International Managing Editor, Light Reading
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