Telecom Ramblings

As soon as WiMAX upstart clwr announced its new funding package this week, you could hear the mumbling.  Google didn’t pitch in!  Google must not believe in the company any more.  Now, I can’t speak for Google directly, but the market consistently misunderstands the companies intentions.  Google didn’t invest in Clearwire in order to take over telecom, or even to make a start at it.  They did it because it’s worth far more to them to have another last mile alternative in the system than it costs them to help get one started.  If they’re not needed to keep it going, then they will [Read more →]

With Carl Icahn’s withdrawal of his bid for the 10% of CLEC XO Holdings (news, filings) he doesn’t already own, the company and its shareholders have entered into a new stage, but one that is clearly temporary and somewhat contradictory.  I frankly didn’t think we would wind up in this position, but when it comes to letting his opponents twist in the wind Carl Icahn is an international grandmaster.  I see his plan more clearly now in hindsight.  Consider the following factors together: [Read more →]

Following up on this weekend’s addition of metro fiber map resources to the website, I have added pages for the Atlanta Metro Area and for California.  Now one might think that perhaps the largest state in the country might merit more than one page, but for now it seems to work best this way as there actually aren’t all that many public maps available for metro fiber in California – that I know of anyway.  I’m sure I have forgotten [Read more →]

Hibernia Atlantic has extended its Global Financial Network into the NY-2 and NY-4 facilities of Equinix (NASDAQ:EQIX, news, filings) in Secaucus NJ, hooking into the Equinix Financial eXchange.  The Hibernia hybrid longhaul/metro footprint can now connect Secaucus, Chicago, and London without passing through NYC itself.  The more direct routes have the benefit of lower latency, which is all the rage in the financial world right now. [Read more →]

Sprint Nextel (NYSE:S, news, filings) has announced more layoffs to the tune of 2000-2500 by the end of the year, which includes some reductions mentioned last week or so in the wholesale group and will be from across the company.  They will also be cutting back on outside contractors and other labor costs.  The company is looking to find annual savings of some $350M annually and will take a charge of $60-80M in the fourth quarter for severance and such. [Read more →]

Carl Icahn has withdrawn his bid for XO Holdings (news, filings), according to an SEC filing.  A week and a half ago, ACF Holdings bid $0.80 for the company and gave the XO’s independent Special Committee the weekend to decide.  Apparently negotiations went beyond the deadline, but ACF didn’t raise its bid and XO didn’t make a counter proposal.   I can’t see this little drama as independent of the XO/R2 litigation, in which a ruling is due soon on Icahn’s motion to dismiss.  Depending on your point of view, this was either [Read more →]

Cogent Communications (NASDAQ:CCOI, news, filings) followed up on its great second quarter with a very respectable third quarter earnings report.  Revenues of $60.2M were up 3.9% sequentially – they were up 5% last quarter.  EBITDA was $17.0M, up 2% from the prior quarter, and the loss per share was $0.07.  Analysts were expecting a bit better on the revenue side, and a bit worse on the earnings side.   Last quarter Cogent stopped giving forward guidance, so this was the first quarter the street had to make their guesses blind.  The company was one of the first in the sector to feel the effects of the economic downturn, although some of their issues at the time were self [Read more →]

What’s that old saying?  In for a penny, in for a pound…  Apparently it scales all the way up to the billions.  According to the Wall Street Journal over the weekend, the backers of clwr are preparing another $1.5B to fund its network buildout.  Sprint Nextel (NYSE:S, news, filings) is supposedly putting up about $1B, while a supporting cast of Intel, Comcast, TW Cable, and Bright House would be putting up another $500M.  Is this a real rumor?  It likely is.  While Clearwire could slow their buildout they clearly don’t want to.  Strategically it’s a no-brainer for both themselves and their backers, if they weren’t willing to take this step then they should never have taken the first one.  The future is no sure thing, but failing to feed [Read more →]

One of the more frequent requests I get is for metro fiber map resources along the lines of the various longhaul maps I have already been collecting and updating.  With the holidays fast approaching and the news soon to become almost as sparse as August, I am making this one of my winter projects.  I have decided this must be approached on a flexible  geographical basis.  Specifically, I will try to answer the question ‘Where is there metro fiber in the XYZ area?’ where XYZ is a) generally thought of as a region somehow, and b) has enough metro fiber assets to make a list worth collecting, but not so many to make it confusing.  That means some areas I select will be [Read more →]

Further ratcheting up the rhetoric in the latency war over in the financial vertical, New York City area metro specialist Lexent Metro Connect has built an ultra-low latency network for neutral datacenter heavyweight Equinix (NASDAQ:EQIX, news, filings).  The new fiber path connects two of Equinix’s datacenters in Secaucus with several of the usual carrier hotel suspects in NYC:  60 Hudson Street, 32 Avenue of the America, 75 Broad Street and 111 Eighth Avenue.  No big deal there, the special part according to Lexent and Equinix is that it takes the “shortest path across the Hudson” and manages a route latency of just 100µs. [Read more →]

Continuing its surge out of obscurity, abvt reported an excellent Q3.  Revenues of $92.4M were up a full 5% over the prior quarter’s $88.0M, and were substantially above the market’s expectations of about $88.8M as collected by Yahoo Finance.  Adjusted EBITDA of $40.7M and adjusted EBITDA margin of 44.0% were similarly powerful.  Earlier in the year, when the company reached 44% ebitda margins, it seemed as if they couldn’t possibly keep it up.  But now it looks more and more sustainable.  With growth and scale could they start to edge toward [Read more →]

In the latest sign that the telecom space has turned a corner, national CLEC PAETEC (news, filings) grew sequentially in the third quarter.  In its earnings report this morning, revenues of $395.7M were up from the second quarter, albeit only by $500K.  Nevertheless, this reverses the trend consisting of three consecutive sequential revenue declines amidst revenue pressure, and it beat analyst projections of $392.6 as assembled by Yahoo Finance.  Despite the economy, Paetec has maintained its EBITDA and positive cash flow all year through cost savings, and this quarter’s EBITDA of $64.2M and free cash flow of $36.5M did not disappoint.  Guidance [Read more →]

Lots of earnings reports today, more coming tomorrow.  Here are quick snapshots of companies in three very different sectors of the telecom and internet infrastructure space: Cisco, CBeyond, and Limelight.

Cisco Systems (NASDAQ:CSCO, news, filings) made all the pundits happy by beating expectations handily.  Revenues of $9.0B and adjusted earnings per share of $0.36 were very strong, as were the company’s comments about the improving economic conditions.  The company also announced [Read more →]

Yesterday, the head of the Metro Ethernet Forum, Nan Chen, unveiled the Carrier Ethernet Neutral Exchange (CENX).  The startup, which has been under development for 5 years, aims to do the same thing as what Equinix is trying to do, i.e. serve as a neutral point of contact between the Ethernet services of multiple carriers.  Unlike that of Equinix, CENX’s service is already up and running in New York, Los Angeles, and Chicago.  One day it’s a vacant lot, the next day there’s a party going on. [Read more →]

Rural ILEC operator Windstream (NYSE:WIN, news, filings) has signed an agreement to purchase NuVox, a privately held CLEC serving the southeast and midwest, for $643M.  They will issue $183M of stock, pay $280M in cash, and assume $180M in net debt, an arrangement that will allow the deal to happen without accessing the credit markets.  The deal, which will bring about 90,000 new enterprise customers to Windstream, is one I hadn’t thought of specifically.  However, I had heard that NuVox was on the market [Read more →]

When it comes to fiber-based telecom, there are ups and there are downs – and then there is TW Telecom (NASDAQ:TWTC, news, filings).  In their earnings report after the bell, the company reported revenues of $304.8M, EBITDA of $109.6M, and earnings per share of $0.05.  Those results are essentially in-line with expectations, except perhaps the earnings per share which beat by $0.01.  Additionally, TW Telecom doesn’t offer much in the way of guidance but who needs it?  You could set your watch by these numbers, here is a summary table of the last 4 quarters ($ in millions): [Read more →]

Last month, Equinix (NASDAQ:EQIX, news, filings) announced its plans to design and build a carrier neutral ethernet exchange service.  The biggest question was, what will the carriers think of it?   Well, the initial response from next generation carriers has been quite positive.  Today, the company announced that AboveNet, Exponential-e, Hibernia Atlantic, Level 3, PCCW Global, Reliance Globalcom and Tinet have signed up to participate in its development.  And that’s where we are right now, in development – there is no product here yet.  But this is a nice selection [Read more →]

RCN Business (NASDAQ:RCNI, news, filings) reported earnings this morning, checking in with revenues of $192M and EBITDA of $56M for the overall business.  While others will probably dissect their main consumer/SME cable business, it is the RCN Metro segment that I generally follow and this quarter these are the first pure public numbers from the metro fiber segment.   [Read more →]

In a bid to cut costs, q announced today that it will freeze salaries and suspend future pension benefit accruals for active management employees for 2010.  Combined with a few other changes to its benefit plans, the company hopes to save $100M over the full year.  The new plan goes into effect with with the new year, but at least they didn’t wait until everyone had finished their Christmas shopping already.  The plan does not affect retirees, former employees and employees covered by collective bargaining agreements with CWA and IBEW.  However, you can call me a cynic if you like, but [Read more →]

The Unity trans-Pacific cable took another step toward completion today.  The cable ship KDDI Pacific Link has brought the Japanese leg ashore at Chikura.   The full system, slated at 4.8Tbps and costing some $300M to build, is still scheduled to be ready for traffic in the first quarter of 2010 – that’s just a few months away!  As recently as last year there were rumbles that this cable wouldn’t get all the way off the ground, but here we are nevertheless.   [Read more →]

Cisco and TMobile Czech Republic today announced the mobile operators new IP backbone, based on Cisco’s CRS-1 router platform.  Cisco is also helping out with gateways and other gear.  The new backbone will support current plans for 3PPP Release 4 and eventual HSPA and LTE deployments for their 5.4M subscribers.  They are clearly preparing for a data explosion, eh? [Read more →]

As often happens during the height of earnings season, a fair amount of non-financial news got drowned out, slipped past my nets, or just left me briefly speechless.  Here are a few of the tidbits I didn’t mean to bypass this week: [Read more →]

The market for metro fiber continues to blaze forward, expanding as if there is no recession.  Today’s new build comes from Lightower Fiber Networks, which operates a dense regional and metro network between and within the Boston and New York metro areas.  The company is now substantially expanding its New Jersey coverage.  It’s more the simply new loop or a few on-net buildings, the expansion covers a range of builds across the region.   [Read more →]