Telecom Ramblings

Hewlett Packard and Alcatel-Lucent (NYSE:ALU, news, filings) announced today that they have formed a ten year global alliance.  They hope to offer coordinated solutions that incorporate both IT and communications components to corporate customers and services providers alike.  The general idea here is not particularly new.  Networks and connectivity are as critical to the infrastructure of most companies today as the various IT hardware they use, and all are increasingly interrelated.  [Read more →]

In an SEC filing today, Level 3 Communications (NYSE:LVLT, news, filings) announced a major new contract with a ‘major multinational customer’ whose name they can’t tell us.  The contract, apparently signed June 4, has a 20 year term and a minimum commitment of $140M in the first four years – that’s pretty substantial as contracts go.  In the hours since the filing, I have been peppered with emails asking for comment on a) who it might be, and b) what it might be for.  Now, I have no inside information on the subject, but since I’ve never let that slow me down before here are some brief thoughts: [Read more →]

Two months ago, Credit Suisse came out with analysis claiming that YouTube was losing some $470M annually.  This led to headlines that YouTube was doomed, that all user-produced video sites were doomed, etc.  Some in the IP/Data community objected to the assumptions, including myself in this post.  But now in a new whitepaper, RampRate has taken those objections and put them into a more realistic model for YouTube’s cost structure.  [Read more →]

Competitive telecommunications provider XO Communications today announced it has made Laura Thomas its new Chief Financial Officer.    This is an internal promotion, Ms. Thomas has been a VP of Finance for many years, stretching back into the pre-bankruptcy days.  She replaces Gregory Freiberg, who left the company in April to take up the CFO role at Savvis.  XO acted quickly and did not bother with much of a search for outside talent, but that isn’t really a big surprise.  Given the current strategic environment, one has to wonder how long XO will remain independent and outside talent would probably require a rather golden parachute.  Besides, being CFO at XO isn’t exactly [Read more →]

Today PAETEC (news, filings) announced plans to sell some $350M in senior secured notes, and will use it to pay off part of its credit facility.  They are looking to take advantage of the window in the credit markets this summer, an opening that haw been widening by the week.  Two weeks ago, PAETEC negotiated a change to its credit agreement allowing it to buy back up to $100M in the market below par and loosened the covenants such that they could sell senior secured notes.  Apparently they meant business!  I don’t know how many of the notes they managed to buy back below par, but with an additional $350M they should be able to [Read more →]

Last week, comments by CEO John Legere of glbc  about M&A in the telecom sector were all but drowned out by the Sprint/Level3 joint venture rumor.  Certainly I let them pass at first, if only because they echoed earlier comments of his from several months ago.  It certainly does seem that the whole sector is available to talk consolidation right now, if unable to actually do anything about it.  But Legere did mention one rather intriguing option for his own company that I hadn’t put any thought into:  Savvis (news, filings) [a subsidiary of CenturyLink (NYSE:CTL, news, filings)] .  [Read more →]

Limelight Networks (NASDAQ:LLNW, news, filings) today unveiled IPv6 support for its CDN. Moves toward IPv6 have been gaining momentum lately, especially for those providing substantial services in markets outside North America.  NTT Communications (NYSE:NTT, news, filings) and glbc are particularly fierce about it.  Given that Global Crossing is reselling Limelight and also supplying it with underlying transport and transit, it is likely that they are involved [Read more →]

As promised, over the past two weeks I have updated my metro fiber provider list.  In my earlier note, I mentioned trying to get some European data.  I’m still trying, but haven’t managed to add anything at this time.  As usual, the latest list is here, which you can get to via the Resources item in the menu bar above.  Several new providers have been added to the list – new to the list of course, each has been around longer than this site has. [Read more →]

There has been something of a large network M&A rumorfest in the markets this week, but in the background everyone else just kept on going with normal business.  And metro fiber had a pretty good week, especially considering the relative paucity of PRs this quarter with actual contract wins.

TW Telecom (NASDAQ:TWTC, news, filings) announced an Ethernet-based voice and data network deal at the Kansas City Star covering 10 sites.  The key to winning the deal was [Read more →]

If you want a preview of what battles over net neutrality in the USA may evolve into, you need only look at the UK.  In a Financial Times article, British Telecom (NYSE:BT, news, filings) complains loudly about the demands caused by rising video usage.  As usual, thinkbroadband has good material on the subject.  While the BBC’s iPlayer is the primary ‘culprit’, pretty much all sites specializing in video are now being deemed freeloaders.  BT wants them to pay for the extra costs, assessing some sort of licensing fee to deliver content to its customers.  What a mess that would be. [Read more →]

With the new M&A buzz being the possible JV between Level 3 Communications (NYSE:LVLT, news, filings) and Sprint Nextel (NYSE:S, news, filings), there will come a whole lot of articles which spread the rumor but don’t delve into the nitty gritty.  In fact, some will surely compare apples to oranges, and not realize it.  Therefore, I thought it might be useful to take both companies’ operational performance and put them side by side in as close to an apples to apples comparison we can manage.  It cannot be perfect of course, but we can get pretty close just by following the following guidelines: [Read more →]

According to the Wall Street Journal, Sprint Nextel (NYSE:S, news, filings) and Level 3 Communications (NYSE:LVLT, news, filings) are in early stage talks about a joint venture.  The WSJ has been rather noisy in the telecom merger area lately, most of the main ‘Qwest is selling its longhaul network’ stories originated there as well.  The Sprint/Level3 talks are supposedly at a very early stage, but Sprint’s idea here is obviously to pull a Clearwire.  They want to take a division they are not willing to keep investing in, and fold it into part ownership of a new company that can and will invest in it.  [Read more →]

Lightwave has a nice article on recent comments by Verizon (NYSE:VZ, news, filings) and AT&T (NYSE:T, news, filings) to the FCC about what should make up our national broadband plan, i.e. how to spend the stimulus and promote broadband penetration.  I recommend a read.  However, it can be hard to read such policy statements without having an allergic response to the extremely high levels of buzzword density.  Therefore, I’m going to offer a bit of, err, translation.  Here the 8 elements AT&T offers as central to the right plan: [Read more →]

Ten years from now, will former Ed Whitacre have a resume that includes the reconstruction of the power and prestige an American icon, and also briefly ran a doomed car company in Detroit?  Or will he be two for two?  Readers of Telecom Ramblings know him as well as any group, so what do you think:

[poll id=”25″]

As a fan of competitive telecom I wish Whitacre hadn’t done [Read more →]

Apparently the thawing in the credit markets has now calved an iceberg or two.  Yesterday, Equinix (NASDAQ:EQIX, news, filings) announced they would sell $250M in convertible debt, and just twenty four hours later have raised that to $325M at 4.75% at a strike price of $84.32.  I wouldn’t call it cheap money, at least not relative to a few years ago, but it isn’t bad.  Equinix will use the cash to expand its footprint to meet demand, but didn’t give any details yet.  Interestingly, they also entered into a capped call arrangement designed to reduce dilution, something vaguely similar to the bond hedge Level 3 had with Merril Lynch.  [Read more →]

Not content with sending extra personnel and equipment into the wilds of upstate New York and southern Texas, Level 3 Communications (NYSE:LVLT, news, filings) announced today that it is lighting fiber in Poland on a new route From Berlin, to Poznan, and on through to Warsaw.  Level 3 has had a PoP in Warsaw for a couple years now.  But while they lit fiber to Vienna, Bratislava, Budapest, and Prague, the route to Warsaw they continued to serve via wavelengths.  With the new fiber route comes a larger relationship with Polish cable provider Vectra, and it gets them closer to Russia where a whole lot of its IP transit growth has been coming from lately. [Read more →]

In the effort to reach 100Gps speeds, the lions share of the media coverage goes to the DWDM systems with companies like Ciena (NASDAQ:CIEN, news, filings) and Infinera (NASDAQ:INFN, news, filings) demonstrating 100G transmissions over a few hundred miles, etc.  However, that’s really only going to be useful if you have something to plug it into on each end.  Therefore, today’s announcement by Juniper Networks (NASDAQ:JNPR, news, filings) is of equivalent importance.  Juniper introduced a 100GE interface to its T1600 router, becoming the first to commercially offer such a product.  [Read more →]

Apparently, the bids really were too low, because today q publicly announced that it has decided not to sell its longhaul network.  They acknowledged there was an auction going on, but said that they did not get bids sufficiently high to make them want to do a deal.  The price tag of $2-3B that was unofficially placed on the asset was just not realistic at the current time.  Is it really worth that much to Qwest and not to Verizon or Level 3 or whomever?  Who knows…  All we can say is that this is a really bad time to sell stuff, and it was always rather odd [Read more →]

Late last week, the Wall Street Journal reported yet again that bids for Qwest’s longhaul network have been coming in rather light to say the least.  To readers of Telecom Ramblings, that probably came as no surprise given my earlier opinions on the subject.  But what intrigued me about the report was the inclusion of XO Holdings (news, filings) amongst those still interested according to many articles, because on their own that makes no sense at all.  Therefore, I really wonder if there could be something else going on here. [Read more →]

Optimum Lightpath, the metro fiber and business services division of Cablevision, began offering HD Voice to its customers last week.  Lately, I have found myself wondering, just what the heck is HD Voice?  Not at a definitional level, that part is easy – HD Voice uses a wider channel and therefore just sounds so much better than a traditional phone call.  I mean, as a phenomenon does HD Voice really have legs? And if so, what kind of legs are they? Lately, VoIP bloggers have been making an increasingly loud roar on the subject, much of which seems to have come out of Jeff Pulver’s recent conference.  Today Andy Abramson gave his endorsement to the idea it can re-invigorate the VoIP segment.    Those are certainly the right names in the VoIP blogging community to have behind you. [Read more →]

Last fall I introduced a Forum on Telecom Ramblings in response to a multi-day outage on another site.  It was hurriedly done and not really up to the task at hand, and quite frankly the readership just wasn’t wide enough yet to support it anyway.  But the dream did not die, and since then I have experimented with various forum software in preparation for another try.  The time has come, and you can find the new forums in the top menu bar under the name ‘Community’.  You will also see the latest posts in the forum alongside the comment form beneath every post, and I may find other places to splice it in. 

The general idea behind my forums is [Read more →]

Colocation and interconnection specialist Telx raised a tidy sum of $43.5M this week.  The new financing is being provided by CIT Communications, Media & Entertainment and RBC Capital Markets and both replaces an existing loan and adds new capital for expansion.  This seems like a further indication that the credit markets continue to thaw.  Money is available, though I’m sure it’s still not cheap. [Read more →]

Network equipment provider Ciena (NASDAQ:CIEN, news, filings) reported earnings today, and while the forecast is for improving weather their results show that it is definitely still raining outside.  Fiscal Q2 revenues of $144.2M were down almost 14% sequentially and 40% over the same quarter last year.  That’s definitely nothing to write home about, almost everyone expected a decline but not that big.  The company reported a loss of $503M, but most of that was on a $456M goodwill charge which doesn’t really mean very much at the moment.  However, adjusted net loss of $0.25/share was still not a happy number. [Read more →]