Telecom Ramblings

A little over a week after Cisco Systems (NASDAQ:CSCO, news, filings) disappointed Wall Street by announcing that revenue growth wasn’t going to justify that family vacation this winter, the company is taking steps to make up and renew its marriage with investors and the media.  But what can make up for a 20% hit to the stock price of a tech giant?  First there was the obligatory “I’m sorry” from CEO John Chambers, who said the other day at the company’s annual meeting,  “We won’t surprise you very often, and I apologize that we did.” And just in case words weren’t enough to heal the wound, Cisco brought out the heavy guns and announced an addition of $10B to its stock buyback program.  That must be the box of [Read more →]

T-Systems, the international services arm of Deutsche Telecom AG (ETR:DTE, news, filings), is expanding its services contract with Global Crossing down in Brazil.  In addition to the private LAN, IP, and clear channel services that T-Systems has been buying from Global Crossing since 2003, they will now be leasing some 34Gbps in wavelength capacity.  It will be used to link T-Systems’ three data centers in São Bernardo do Campo, São Paulo and Barueri as part of an enhancement to [Read more →]

When one talks of a reverse split amongst competitive carriers, the subject is usually Level 3, since they have retained the explicit right to do so ‘just in case’ for many years now.  But today in S-1 and PRE-14C SEC filings, XO Holdings (news, filings) unveiled its own plans for a one for twenty reverse split aimed at getting its common stock back on the Nasdaq Global Markets by raising its price above the $4 initial listing threshold.  Such a listing has been a point of contention amongst investors ever since Icahn took the company out of bankruptcy court. So why now?   [Read more →]

The Social Security administration has selected AT&T (NYSE:T, news, filings) to develop a new contact call center solution under the Networx Universal program.  The contract, which is worth up to $286M, will power the IP based call center and interactive voice response automation underlying the SSA’s national toll free number.   [Read more →]

Let’s quickly catch up on some of the news this week:

Prospective wholesale LTE alternative network LightSquared (news) took a major step along the path toward actually having a network.  For now, it’s just a really big satellite that was launched from Kazakhstan on Sunday.  And by really big, I mean with a 22 meter L-band reflector-based antenna.  The idea, or so I gather, is that by having bigger equipment in space, [Read more →]

According to a PR yesterday, abvt is adding new express routes to its fiber network in the Chicago metro area.  The new routes will bypass more than 23 miles of the existing fiber footprint on the way to Chicago’s western suburbs, and thus will provide a lower latency route for financial customers and others seeking greater speed.  The new Chicago routes will be operational by [Read more →]

According to a release from Telegeography today, IP transit pricing continued its fall but with no real change to current trends.  The median price for a GigE port in New York fell to below $8 per Mbps by the end of the second quarter of 2010, with London following closely. In Hong Kong, pricing for the same port fell to $28, with Tokyo a bit higher now.  That pricing for a GigE port has fallen at a 15% compounded rate over the past five years should surprise [Read more →]

As they do each quarter, both XO Holdings (news, filings) and itcd have filed their 10-Q’s with the SEC for the third quarter on the last day possible, bringing earnings season to a close for the telecom and internet infrastructure sectors.  Neither company offered up any surprises bigger than the news each made in October, when Deltacom announced its expected acquisition by Earthlink and XO pre-announced guidance, some money from Icahn, and plans for a $200M rights offering.  However, let’s take a look at the details.  Here are XO’s Q3 numbers and remaining guidance in the context of the prior four quarters: [Read more →]

Competitive network operator PAETEC (news, filings) is accessing the credit markets in order to fund the acquisition of Cavalier that was announced two months ago.   The nationwide CLEC announced today that it intends to sell $420M in senior notes due 2018, and that the transaction should be completed this week.  The new funds plus some already on the balance sheet will be used to fund the $460M purchase price, including the [Read more →]

International wholesale IP and Ethernet carrier tinet and the Middle Eastern cable system Gulf Bridge International (GBI) announced a partnership this morning.  Tinet gains connectivity to the major ports in the Middle East and on to southern Asia, routes which the company has not previously had a big presence.  Meanwhile, GBI gains easier access to the rest of the world via capacity and services on Tinet’s global network, especially into Europe.  As the two are not likely to [Read more →]

Rising competitive fiber operator Zayo Group (news, filings) reported its fiscal Q1 earnings yesterday in the wake of Zayo Bandwidth COO John Scarano’s recently announced departure.  There were few surprises but a bit of more accurate information on the AFS deal.  Because of Zayo’s frequent M&A activity, it is always rather difficult to find an apples to apples comparison.  In this case though, Q1 included a full quarter from the former AGL Networks, whose acquisition closed on July 1 and whose revenues all went toward the ZFS segment along with $1.4M of dark fiber revenue transferred from Zayo Bandwidth.  With that in mind, here’s a quick table summarizing their performance alongside the prior quarter: [Read more →]

TGIF, let’s close out the week with a quick look at a few more recent items:

Emphasizing the importance of power availability nowadays, Digital Realty Trust (NYSE:DLR, news, filings) today deeded over a parcel of land in its Santa Clara Datacenter Park to Silicon Valley Power.  The utility will build a 65MW general distribution substation, apparently named [Read more →]

Two companies that haven’t really been on my radar made M&A news yesterday.  pmug will be buying arbx in an all stock transaction valued at about $28M.  The purchase will add some $300M+ in annual revenues to Primus’s $800M, bringing their total annual revenues to above $1B and that of their wholesale division to more than [Read more →]

Not willing to be forgotten the Netflix/Level 3/Akamai story, Limelight Networks (NASDAQ:LLNW, news, filings) has also spoken up today.  In a post on their corporate blog, the company noted that there also “a primary CDN provider” for Netflix (NASDAQ:NFLX, news, filings), the deal is also a multi-year one that expands in 2011, and they are already storing all 20,000 titles.  Thus, while the information we have is surely incomplete, it does seem to suggest parity between the Level 3 and Limelight contributions toward Netflix’s streaming services in 2011.  Of course, Limelight and Level 3 are very different [Read more →]

It’s a bit anti-climactic now of course, since the news came out on Tuesday already and caused quite a ruckus for the stock prices of the three content delivery networks involved.  But this morning Level 3 Communications (NYSE:LVLT, news, filings) and Netflix (NASDAQ:NFLX, news, filings) made it official, and offered a few more details on the multi-year contract.  One thing to note is that the PR names Level 3 as ‘primary’ CDN provider for Netflix, which suggests that they may get a bigger share of this than Limelight Networks (NASDAQ:LLNW, news, filings) does and certainly have displaced [Read more →]

While still small in the grand scheme of things, European metro specialist euNetworks turned in another strong quarter of growth – further suggesting that independent metro fiber in Europe is finally coming of age.  Revenues of €10.3M were up 40% from the same quarter last year, and up almost 10% sequentially as well.  Adjusted EBITDA, which reached break-even just last quarter, rose to €0.8M.  During the quarter, they unveiled new low latency routes between London, Slough and Frankfurt, and have apparently signed [Read more →]

Telecommunications giant Verizon (NYSE:VZ, news, filings) is planning to take another step down the 100G path.  Last year the company deployed a 100G optical transmission system in Europe on the 893km route between Paris and Frankfurt.  Now, by the end of 2010, they will deploy a standards-based 100 Gigabit Ethernet link on that same route for its IP network.  The solution will use Juniper’s routers and Ciena’s coherent optical transport solution, allowing them to establish [Read more →]

Carrying the tech world on its shoulders must be tiring for Cisco Systems (NASDAQ:CSCO, news, filings), given the thanklessness of the task.  In their fiscal Q1 earnings report today, the equipment giant reported revenues of $10.75B and non-GAAP earnings per share of $0.42, both of which exceeded analyst forecasts.   That happy news was greeted by a 13% decline in the stock price after hours, which when you’re as big as Cisco is a $15B haircut in marketcap.  [Read more →]

Not a lot of big news today, which offers us a chance to catch up on some items I didn’t follow up on yet:

Up in Canada, upstart metro equipment provider BTI Systems raised new funds and reworked their balance sheet for the next phase of their growth.  The arrangement includes $11M in new financing from existing investors as well as increases in credit facilities and reduction in long term liabilities.  BTI expects to top [Read more →]

Hmmm, perhaps I’ll have to expand my definition of on-net buildings even further.  Yesterday, Alcatel-Lucent (NYSE:ALU, news, filings) announced that it will be working with Stratus Global to improve offshore communications for the oil and gas industry.  Offshore as in oil rigs, platforms, and vessels in the Gulf of Mexico.  The two year agreement is for $5.2M, and will bring reliable voice service, corporate VPNs, high-speed Internet connectivity, and wi-fi hotspots. [Read more →]

Competitive fiber operator Zayo Group (news, filings) is planning a major initiative up north in Minnesota, according to a new PR today.  With the acquisition of American Fiber Systems, the stimulus award they picked up for the area earlier this year, and the regional fiber that came along with the Onvoy assets a couple of years ago, Zayo now has a very solid footprint in and around the Minneapolis/St.Paul metropolitan area.  The new build plans will extend the company’s total Minnesota mileage to 1700 and add service to some 350 wireless towers.  Along with the twin cities, coverage will be added or increased in [Read more →]

There have been several items over the past day or two from fiber operators worth a quick take:

XO Holdings (news, filings) continued its recent series of expansions with another such effort in Phoenix.  The company has added some 130 miles to its metro network on the east side into Chandler, Gilbert and Mesa offering potential access to some 200 more buildings.  They have also deployed Ethernet over copper more broadly in Phoenix as well.  Hanging overhead of course is [Read more →]

That’s the word according to Dan Rayburn, and it matches what I’ve been hearing since my post last week about Level 3’s CDN push.  Multiple sources that are almost certainly independent of Dan’s have now told me that the new content customer won in October for whom Level 3 Communications (NYSE:LVLT, news, filings) is spending $15M in capex is in fact Netflix (NASDAQ:NFLX, news, filings).  But that Akamai (NASDAQ:AKAM, news, filings) may be the one taking it on the chin is a new one on me, though I doubt we will hear for sure until it’s time for Q4 earnings and 2011 projections.  I somehow doubt that [Read more →]