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AT&T (T): BCE's Bell Canada to Evaluate ECOMP Platform

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U.S. telecom giant AT&T Inc.’s (T - Free Report) Enhanced Control, Orchestration, Management and Policy (ECOMP) virtualization platform has been in the news for quite some time now, courtesy of launch dates and test schedules. Toward this end, leading Canadian telecom operator BCE Inc.’s (BCE - Free Report) subsidiary Bell Canada is set to test AT&T’s ECOMP platform.

Bell Canada aims to use SDN within both its wireless and wireline networks. The service provider currently runs an LTE-Advanced wireless network and is expanding its FTTH network with 1 Gbps speeds, next-generation Fibe TV and IP-based business services. Hence, ECOMP may help Bell Canada add features and scale down operation costs on its FTTH rollout and IP-based cloud service expansion plans.

Well, Bell Canada is probably the second telecom company to join AT&T on testing ECOMP. In Sep 2016, French telecom Orange S.A. joined AT&T as its first telecom partner to test the ECOMP platform. The assessment of ECOMP was first done in a lab environment followed by a field trial as part of its On-Demand Networks program.

Meanwhile, AT&T moved ahead with the release of ECOMP as an open source software in collaboration with Linux Foundation. AT&T’s ECOMP has been credited as the most comprehensive and complete architecture for virtual network function (VNF) automation by Linux Foundation. We believe that AT&T’s ECOMP may end up with another Linux Foundation NFV project — OpenO.

ECOMP Prospects

ECOMP is a software-defined platform developed by AT&T to power its virtualized network. It allows cloud developers to create services and help service providers and businesses better control network services, add features and cut down on operational costs. Thus, ECOMP is likely to fulfill consumer interests through improved network adaptability, better scales and ability to meet diverse needs of clients.

AT&T’s ECOMP is slated to be introduced in the open source industry in the first quarter of 2017. The main purpose of these trials is to create and manage a software-defined network (SDN) and network function virtualization (NFV). Apart from this, companies aim to simplify technological integration, increase operational efficiency and bring down expenditures.

Growth Prospects

The main purpose behind open sourcing ECOMP is to operate the industry through a common approach of VNF/SDN functioning with a single SDN-based network cloud. This launch should help AT&T attain its software-centric objective to support the escalating demand for data traffic transmission on AT&T’s wireless networks, which has been exceeding 150,000% between 2007 and 2015. AT&T claims that ECOMP is best suited to deal with technological and wireless problems faced by service providers around the world. Moreover, it allows the automation of service delivery, service assurance, performance management, fault management and SDN tasks. AT&T claims that Orange and Bell Canada’s decision to dry-run ECOMP will advance its open-source expansion plans. AT&T aims to virtualize 75% of its network by 2020 through ECOMP. The company has virtualized 5.7% of its network in 2015. It further intends to transfer 30% of its applications to cloud by the end of 2016.

To Conclude

We are impressed with AT&T’s efforts to expand its ECOMP platform. Collaboration with Intel Corporation (INTC - Free Report) will also help AT&T develop new software-centric network technologies. We believe these efforts have helped the company beat the Zacks categorized U.S. Wireless National industry’s performance on a year-to-date basis. The stock has gained 22.41% and has outperformed the industry's growth of 21.55%.

In spite of the adversities, the company currently has a Zacks Rank #3 (Hold) due to the multiple headwinds. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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