Telecom Ramblings

Level 3 Communications (NYSE:LVLT, news, filings) brought its local markets initiative to northern California.  They will be grouping together the markets of San Francisco, San Jose, Oakland, and Sacramento with a general manager, and will be adding both capacity and staff in the region.  This is the second such initiative on the west coast, the first being up in Seattle last summer. No doubt we will see a southern California initiative at some point as well, however [Read more →]

Competitive broadband provider RCN Business (NASDAQ:RCNI, news, filings) on Friday announced that it has agreed to a buyout offer from private equity firm ABRY Partners.  The price of $15/share represented a 22% premium to the stock price before the announcement, and along with the assumption of debt the total value of the deal is $1.2B.  It’s not a done deal yet, as RCN can still solicit competing offers for another 40 days.  In the meantime, the company has canceled its Q4 earnings call. Whether they get any depends on how prospective buyers view [Read more →]

Hybrid fiber/wireless backhaul network operator ftwr reported Q4 earnings last night.  With all the restructuring activity, it is somewhat difficult to make sense of the company’s numbers right off the bat.  However, the balance sheet now has $50.7M in unrestricted cash and $154.5M in long term debt, much easier to support but at the cost of three times as many shares outstanding.  They have bought themselves time, so where are they operationally? [Read more →]

Network equipment manufacturer Ciena (NASDAQ:CIEN, news, filings) reported its fiscal Q1 results today.  That’s for the three months ending January 31st, which means we get an early glimpse of some early first quarter effects.  Revenues of $175.9M were down slightly from the prior quarter and were below analyst expectations in the 180s.  The company blamed delays in revenue recognition associated with initial deployments for several customers for [Read more →]

Here are a few interesting datapoints that have crossed the wires this week:

Metro fiber specialist American Fiber Systems has been busy out in the Rockies.  On Tuesday they announced the completion of an upgraded intercity ring connecting its four markets in the region:  Las Vegas, Reno, Boise, and Salt Lake City.  The unique ring consists of 18,720 fiber miles in all, and enables the company to offer [Read more →]

Here is a video of the FCC Chairman discussing his national broadband policy and why we need it: [Read more →]

Competitive fiber and data provider TW Telecom (NASDAQ:TWTC, news, filings) announced today that it intends to raise $430M in senior notes due 2018 .  They intend to use the money to refinance their current 9.25% bonds due 2014, of which there is $400M currently outstanding. What’s interesting here is that the debt just became callable at just above 103% of face value on February 15, but they aren’t calling it.  They are tendering for it at 100.4% with another 3% consent payment, and are seeking [Read more →]

Competitive service provider cbey released its Q4 and full year 2009 financials today.  Q4 Revenues of $107.7 were up sequentially but somewhat weaker than expected due to lower ARPU levels of $727, down from $744 in the prior quarter.  However, revenues have never really been the company’s weak spot, and they made up for it with strong Q4 EBITDA of $19M and earnings per share of $0.03, up from $15.3M and -$0.01 in the prior quarter and ahead of expectations.  Churn [Read more →]

IP and data center specialist Internap Network Services (NASDAQ:INAP, news, filings) reported Q4 and full year earnings yesterday after the bell.    Revenues continued to see pressure, falling sequentially from the third quarter but still beating analysts estimates slightly.  However, EBITDA was moved higher to $9M for the quarter, fueled by improving gross margins.  Normalized earnings per share of $0.02 were also better than expected.  Here’s a quick table to put the numbers into the context of the full year: [Read more →]

The federal government’s broadband stimulus awards continue to roll out, albeit slowly.  Following Zayo’s success in Indiana, today it was Level 3 Communications (NYSE:LVLT, news, filings), itcd, and RCN Business (NASDAQ:RCNI, news, filings) who will be seeing funding for middle mile expansion in rural areas.

Level 3’s stimulus wins today totaled $13.7M, alongside which it will put $4.2M of matching funds.  Level 3’s strategy of offering to crack open the huts along stretches of its network that run through rural communities appears to have seen some success.  That means their awards came in small chunks [Read more →]

According to an S-1 filing with the SEC today, Force10 Networks is finally preparing to take the plunge and go public.  There was speculation for several years prior to the recession that Force10 would go public, but they never did.  Last winter the company bought fellow equipment maker Turin Networks, and has been rather quietly integrating the assets and playing defense for a year while carriers cut back on their network spending.  Now they plan to IPO, which frankly isn’t [Read more →]

According to the website Hacking Netflix, the possibility of a Netflix iPhone app has moved beyond the theoretical stage.  Apparently the company is testing the waters via an online survey to see if such a beast is viable.  That doesn’t qualify as a formal announcement of course, but the wheels do [Read more →]

Level 3 Communications (NYSE:LVLT, news, filings) added a new gaming client for its CDN business with a win at Icarus Studios.  They are providing caching and download services for the game Fallen Earth, a MMOG or massively multiplayer online game, scaling the available capacity by a factor of twenty and supporting peak usage of 4Gbps so far.  The gaming industry has long been one of the CDN sector’s best clients, and doesn’t seem to be slowing down. [Read more →]

Expansion continues to be the early theme of 2010 amongst network operators of all types, here are a few lesser known items that crossed the wires recently.

Regional network operator Pinpoint Network Solutions is apparently lighting new fiber between Chicago and Denver, using packet-optical gear from BTI Systems.  The expansion will add some 700 miles to that part of their network, along with an initial 80Gbps of capacity.  Omaha-based Pinpoint has a rather unique [Read more →]

Well, the telecom M&A season is open already, but the first target was not in the fiber business, nor was it in the CLEC, data center, VoIP, or equipment sectors.  It was an energy company.  Competitive telecommunications provider PAETEC (news, filings) announced today that they are buying US Energy Partners, which sells electricity to 3500 customers in western New York state.  PAETEC had given indications before that it was interested in the energy sector, apparently they meant it – and what better place to start than [Read more →]

We WANT it certainly, but why do we need it?  On ConnectedPlanet, Rich Karpinski makes a compelling case that 1Gbps demonstrations like the one Google is trying to put together are basically irrelevant to the development of the internet.  Amongst his points is this quote:

“Higher speeds aren’t a panacea in and of themselves. If bigger pipes just end up getting eaten up by HD, rather than regular resolution, video, have we really gained that much?”

And that, I think is a key insight to think about.  Just what is it that 1Gbps enables us to do that creates the value to society that will justify (and pay for) [Read more →]

The news this week over in Italy has been surreal to say the least.  According to papers justifying the arrest warrants, the Calabrian Mafia infiltrated or otherwise corrupted senior management figures in two of Italy’s largest telcos:  Fastweb and Telecom Italia Sparkle.  Silvio Scaglia – the founder of Fastweb, Stefano Mazzitelli – former CEO of Sparkle, and Nicola Di Girolamo – a Senator from the prime minister’s party were at the head of the list, while additional top figures currently at the company are also under scrutiny.  You can almost hear the pens in Hollywood scratching away [Read more →]

Level 3 Communications (NYSE:LVLT, news, filings) had a pair of announcements in the past few days.  Yesterday they revealed their role in delivering the Vancouver Winter Olympics for France Télévisions both to the web and to the iPhone.  Level 3’s CDN business continues to demonstrate strength in Europe where they have greater advantages – especially over the smaller providers.  The service has been managed out of the Level 3 broadcast operations center in Dublin – I didn’t know [Read more →]

Two very similar wireless operators had very different days yesterday.  MetroPCS (NYSE:PCS, news, filings) enjoyed some real sunshine, reporting revenues of $930M, adjusted EBITDA of $251M, and earnings per share of $0.09 – all three of which were above analyst estimates.  Net customer additions and ARPU were both up.   [Read more →]

In December, Genband became the stalking horse bidder for Nortel’s carrier VoIP business with a bid of $282M.  But there was still the auction yet to go, right?  It seemed quite likely, but apparently not.  Nobody else stepped forward with a better bid, and thus Genband won without a fight.  The final price was $282M, and after the obligatory regulatory and court approval process it will all be over.  Genband looks like a good fit for [Read more →]

Consumer VoIP specialist Vonage (NYSE:VG, news, filings) announced its Q4 earnings this morning, turning in earnings per share of $0.02.  That’s down a penny from the third quarter but up nine cents from last year.  Revenues of $224M were up a little less than 1% sequentially and about 0.5% above the same quarter last year.  That of course is in keeping with Vonage’s strategy lately, which has been to completely revamp its cost structure while treading [Read more →]

IP and data services specialist Cogent Communications (NASDAQ:CCOI, news, filings) reported their Q4 and full year 2009 earnings this morning, showing continued strength.  Revenue was slightly above estimates, EBITDA grew at normal rates, and earnings per share were in line after taking out a deferred tax adjustment.   Here is a quick table summarizing Q4 in the context of the rest of 2009: [Read more →]

Last week, privately held west coast CLEC TelePacific apparently raised some $395M via a new senior credit facility.  They will use the funds at least partially to refinance existing debt that is maturing over the next two years.  The new debt consists of a $370M term loan and a $25M revolving line of credit that they did not draw on initially.  Telepacific also offered some information on its financial state, pegging 2009 revenues at [Read more →]