Generally, the industry considers Dell'oro's numbers to be the most accurate because she does the most digging to make sure there is no double counting, incorrectly categorized sales, etc.. Having worked closely with all of these vendors I would have to concur. In any case, its better than taking any of the vendors word for it.
I certainly can't speak for the whole industry, but if I were do so, I'd choose to back the research firm giving my favorite companies the best ratings.
As far as the 7 of 7 I cited, many of the contracts you list are incumbent relationships where NN has gained an advantage through a history of service and through the switching costs of changing network management systems. This does not mean that they are not attractive contracts, just that they were not won in a technical bake off. In particular, the SBC and C&W contracts will be quite large over time I suspect.
I could be wrong, but isn't it more significant to get contracts renewed than to get them in an initial "bake off?" Accepting a first date means nothing, but if I accept a second or third time, it means the guy passed some fairly stringent tests.
I also believe that the roster of clients Ascend has signed over the past year will deliver faster growth than those that NN has retained.
Would this be percentage growth or are you referring to size of contracts? From my admittedly naive perspective, wouldn't it be better to get a contract in a $25 B company growing at 10% than a $3 B company growing at 30%?
But while I see Ascend as the best play in carrier ATM, NN is a clear number 2 with an attractive base of customers. Cisco is a distant #3.
I see NN as the best play with Ascend #2 and Cisco a distant #3. This based not simply on market share but on strength of products and total management systems. I talked to AT&Tat the show, for example, and they're extremely pleased with NN's GSM results.
LMDS. I guess I am somewhat guilty of skepticism about the near-term market opportunity in LMDS and have discounted it somewhat. While licence holders will begin deployment, the total $ spent will depend on these new carriers finding a large market, and I am not so sure. NN and Cisco have made much stronger moves toward this market than Ascend. If you see this as adding significant revenues over the next 18 months then NN would certainly look more attractive.
I wouldn't count on LMDS's "significant revenues" boosting NN's value as much as their ability to differentiate the total package by offering LMDS along with all the other services.
DWDM. Ascend was in fact the first to announce direct connectivity to DWDM and is now interoperable with Lucent, Ciena, Pirelli, NEC and Nortel, which together control over 95% of the market.
Interesting you should say this. I talked to Mory at the last general meeting and he said they did not have DWDM but would go outside the company rather than offer it themselves. I believe they have some arrangement with Pirelli. Correct me if I'm wrong.
Where NN comes out ahead is its interconnectivity with its own affiliate Cambrian, but metro area DWDM while an enormous opportunity, is a year away from major deployments. Ascend has long-haul DWDM connectivity working at Qwest, Frontier and Williams.
Having connectivity is one thing, but being able to offer DWDM as part of your standard platform is quite another. Cambrian ( 22% owned by TM and 40% by NN) is currently in trials with Bell Canada and is installing 3 more trials with major carriers. At the same time, they're receiving RFPs for shipment in January. I toured their facilities in September and saw their three-story tower that's nearly complete and the second that's already under way. This is a company outgrowing its space before it's even complete.
Cambrian's DWDM is fully interoperable with Lucent's and since it is short-haul, the margins are significantly higher than long-haul. As I understand it, long haul DWDM will become a commodity product quite rapidly whereas short-haul, because of its complexity, won't.
BTW, how can Ascend have interoperable DWDM if they don't have a product of their own? I'm not trying to be cute; I really don't know.
Regards,
Pat
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