Telecom Ramblings

Telecommunications equipment giant Alcatel-Lucent (NYSE:ALU, news, filings) today unveiled its Converged Backbone Transformation Solution and provided new details on its vision for networks of the future.  The key aspect of the new offering centers on IP/Optical convergence, bringing the routing layer much closer to the DWDM layer and promising higher efficiency, greater resiliency, and lower complexity.  (Still working on world peace though.  The company says studies indicate capex savings of [Read more →]

In an SEC filing on Tuesday, DWDM specialist Infinera (NASDAQ:INFN, news, filings) offered some new information on its status.  First of all, the company began shipping its new metro edge product in August with four customer wins already, and they will formally introduce the product at Supercomm in October.  Having a metro product to complement their longhaul and undersea products should open new revenue opportunities for Infinera, and the timing seems good assuming the telecommunications industry climbs out from under its rock over the next few quarters. [Read more →]

There has been a mini news blitz from telecoms accessing the credit markets in the last few days, implying that a real window has opened in the credit markets.  If so, we can expect more activity over the next few days as those who need to take advantage of the opening.  Let’s look quickly at the financial moves made by glbc, q, CenturyLink (NYSE:CTL, news, filings), and Zayo Group (news, filings) to start the week off. [Read more →]

In the spring, the Australian government announced a sweeping broadband initiative, dubbed the National Broadband Network or NBN, which would bring 100Mbps to everyone in the country and would initially cost some AU$43B.  Since then, there has been much jockeying for position by the various players to agree on precisely how to do it, with incumbent giant Telstra seeking ways to deflect the incoming attack and perhaps turn the situation to its advantage.  Well, it didn’t work, it’s hard to imagine Telstra being happy at all right now.  Today the government followed up by proposing a sweeping telecom reform bill that does the following: [Read more →]

Avaya has won the auction for Nortel’s Corporate Networking division, with a bid of some $915M.  That consists of $900M for the business and $15M for an employee retention plan.  Of course, Avaya had been the stalking horse bidder for this phase of the Nortel bankruptcy liquidation, but they had originally bid only $475M.  In other words, the bidding was apparently fierce and it could easily have not turned out this way. [Read more →]

According to research by Telegeography, internet traffic growth has remained very robust despite the global economic slowdown, tipping the odometer at 79%.  In fact, it has accelerated since the prior year’s study, which saw 61% growth internationally.  The big time growth came, as usual, from the less developed parts of the internet world.  Eastern Europe, South Asia, and the Middle East continued to grow at triple digit rates.  But even the US and Canada managed a very respectable traffic growth rate of 59%.  Which leads to an obvious question… [Read more →]

Reports over the weekend have Deutsche Telecom AG (ETR:DTE, news, filings) is thinking about purchasing Sprint Nextel (NYSE:S, news, filings), and has hired Deutsche Bank to advise it on a potential bid.  There have been lots of rumors lately, most of which have been little more than smoke and sometimes less.  But this one makes a fair amount of strategic sense, if the two can agree to terms.  The price tag would need to be somewhere in the neighborhood of $30B or more, including Sprint’s net debt, so this would be a major deal any way you slice it.  Here are some thoughts: [Read more →]

The rumor returns every few months in some form, so today’s upwelling over on Seeking Alpha isn’t a shocker.  Someone hears that Google wants a fiber backbone, then obviously that must be Level 3 Communications (NYSE:LVLT, news, filings)!  And it makes so much sense on the surface.  Where else can Google expand to other than into the fiber itself?  How else to counter the anger of unwilling future dumb pipes?  With Google even in the phone/voice business now with Google Voice and its Android platform for mobile devices, it is even easier to make the case.  It rolls off the tongue so easily, that the rumor itself seems immortal.  Now as readers of this site know, I love a good M&A rumor, but this one has always been a dream of traders and media outlets and nobody else’s.   [Read more →]

Fiber and data provider TW Telecom (NASDAQ:TWTC, news, filings) has been selected to provide voice and data services to Peterson Air Force Base in Colorado Springs, which is the home to NORAD, the 21st Space Wing, Air Force Space Command, and the United States Space Command.  The company will supply both voice and data services over 5 years to the tune of $1.4M, hooking up the base to its extensive metro network in the region.   [Read more →]

In one of the better stunts I have seen to bring attention to poor download speeds at an ISP,  a South African company called Unlimited IT staged a race.  They would take a nice chunk of data and send it 50 miles away via the internet and also via carrier pigeon – in a data card strapped to its leg.  Any guesses who won?  Well, it wasn’t the South African giant Telekom. [Read more →]

Upstart fiber network operator Zayo Group (news, filings) has closed its acquisition of ftgx, bringing the latter’s colocation and interconnection services underneath Zayo’s growing umbrella.  Soon after the acquisition was announced in May, a rival bid by RCN Business (NASDAQ:RCNI, news, filings) threatened to knock Zayo’s acquisition train off the tracks.  However, after a couple weeks of negotiations RCN dropped out of the bidding and now it’s all done.  So what will Zayo do with the Fibernet assets? [Read more →]

Datacenter operator Equinix (NASDAQ:EQIX, news, filings) announced another stage in its expansion program, planning two new data centers.  In the Washington DC area (Ashburn) they will add a 152,000 square foot facility that they will be referring to as DC6.  The new facility will cost around $100M overall, $30M in capex during 2009.  In Silicon Valley, they will add a 170,000 square foot facility that will go by the name SV5.  That one will cost $145M overall, with the first stage being $100M and of that $30M in capex during 2009. [Read more →]

Datacenter specialist sdxc has tapped the credit markets, reeling in $100M in senior secured financing from a syndicate of banks arranged by RBC Capital Markets.  The interest rate is variable but seems quite low at first glance, and financing will be in the form of delayed draw term loans.  It’s not particularly long term debt, they will start repaying principle in 2011 and finish in 2014. [Read more →]

There’s a thoughtful article over on allafrica.com regarding what Africa can and cannot do with all the undersea bandwidth that has come ashore already or is coming soon.  This summer SEACOM finally went online along the east coast, and WACS is due along the west coast in the next couple of years, which will add to the other 5 cables to provide an aggregate capacity of over 10Tbps to the continent.  That’s not much compared to what feeds Europe and North America, but for Africa it’s huge.  However, few telecommunications companies on the continent are at a stage where they can actually use it, and even those who are generally still [Read more →]

Everyone knew that Deutsche Telecom AG (ETR:DTE, news, filings) was looking at alternatives for its TMobile UK operations, but I guess I didn’t actually believe they would manage to make a deal.  So yesterday’s announcement of their intention to form a 50/50 joint venture with France Telecom (NYSE:FTE, news, filings) did manage to surprise me slightly.  The new company, assuming it all happens as tentatively proposed, will have around 37% of the UK mobile market, leapfrogging both Telefonica’s O2 and Vodafone in scale.   [Read more →]

International IP services provider glbc is hoping to tap the credit markets to the tune of $650M of senior secured notes due 2015.  That’s a pretty hefty pile of cash of course, but most of it is aimed at refinancing existing debt.  We knew they were going to make some kind of move in the credit markets since they have already tendered for the $225M of GC Impsat notes and consents.  Apparently lots of those notes are being tendered although the deadline isn’t until Sept 21.   [Read more →]

Spanish based international telecommunications giant Telefonica (NYSE:TEF, news, filings) and Chinese based fixed and mobile provider China Unicom (NYSE:CHU, news, filings) have deepened their relationship.  In a large stock swap, each will buy $1B in stock in the other.  That will bring Telefonica’s stake in China Unicom to some 8%, and give China Unicom its first stake in Telefonica of just under 1%.  The two intend to cooperate on developing mobile phone technology, servicing multinational corporations, and even in exchanging managers.  I think they like each other… [Read more →]

If there was any doubt about the level of commitment of Level 3 Communications (NYSE:LVLT, news, filings) to the CDN sector, last week’s news should help clear it up.  On Thursday, Level 3 enhanced its content delivery capabilities with a new offering called Content Analytics.  Customers can use the new capabilities to gain insight into the traffic patterns of their audience, and is capable of supporting over 100,000 URLs per CDN caching property.  Others have detailed the service itself, I’ll simply say that with the economic pressure the company is under it is telling that [Read more →]

There has been an explosion of rumors and stories regarding former VoIP child star Vonage (NYSE:VG, news, filings) lately.  The only one that was true turned out to be that Vonage is working on an iPhone app, the rest have been inventions of the street.  As rumors go, they have generally been transparently silly, such as the AT&T buyout rumor over the last few days.  Where is the imagination?  Put some effort into it!  You want a better buyer for Vonage? I’ll give you one… [Read more →]

Network equipment provider Ciena (NASDAQ:CIEN, news, filings) reported its fiscal third quarter earnings this morning, providing the latest update on the state of the economy in telecom.  The equipment providers have taken the brunt of the recession, as carriers have cut back on the capex that has been their lifeblood.  But this quarter, Ciena finally managed to turn the tide with sequential growth with revenues of $164.8M from $144.2M last quarter.  That’s really quite decent, I think analysts were only looking (hoping) for the low 150’s.  Adjusted net loss of $0.05 was also better than anyone seems to have expected. [Read more →]

A twin pair of rumors hit the street yesterday, both of which seem to be living proof of the phrase “There’s a sucker born every minute”.  First, there was this insane notion that AT&T (NYSE:T, news, filings) might buy Vonage (NYSE:VG, news, filings).  Right, that’s why they spent years choking off their own CallVantage VoIP product – so they could attract regulatory scrutiny by buying another one, cannibalize their own revenue with it, and further piss off the rather significant percentage of [Read more →]

q has made its 100G move, they will be upgrading their network to 100G with gear from Alcatel-Lucent (NYSE:ALU, news, filings).  Of course, only bits and pieces of 100G gear are actually ready yet from any provider, but Qwest will start with the 100G ethernet router interface announced earlier this summer. The 100G portion of the ultra-longhaul DWDM gear will no doubt come online when it is ready.  This is a nice win for Alcatel-Lucent, certainly giving its 100G efforts an early boost.   [Read more →]

Yesterday, Infinera (NASDAQ:INFN, news, filings) announced its new product line for undersea cables, making formal something that had been trickling out over the past few quarters.  The new Submarine Line Modules (SLMs) incorporate silicon optical amplifiers for ultra-longhaul reach.  As with other Infinera gear, operators can expand to 160 wavelengths on a single fiber, which will help current cables in the Atlantic continue to meet capacity requirements for a few years if true under those conditions.  The public material doesn’t give details on the actual distances the new gear is capable of, it almost certainly depends on the design and age of the particular cable.  But they did give us the name of one of its customers: [Read more →]