Telecom Ramblings

Optical provider Infinera (NASDAQ:INFN, news, filings) offered us a glimpse into the telecom equipment sector today as they reported Q4 2008 earnings.  Optical equipment companies get hit hard when recessions strike because they are very sensitive to carrier capex levels.  Adjusted GAAP revenues of $86.2M was far in excess of analyst estimates of $75.5M, and surprisingly up from Q3’s $80.9M.  Gross margins, however fell from 40.8% in Q3 to 34.6%, and EPS turned negative to $-0.07.  In a separate release, Infinera announced that OTEGlobe, the international arm of [Read more →]

Until now Comcast has taken the lead amongst cable companies seeking to rein in P2P and other traffic they have seen as deleterious to the health of their networks.  But now Cox Communications has announced its network management plans, and their effort seems to be more aggressive than the watered down version that Comcast retreated to in September.  What Cox wants to do is categorize traffic as time-sensitive and non-time-sensitive.  When the network is congested, they slow down the latter.  When the network is not congested, nothing happens. [Read more →]

One month after q disconnected SkyWi in a billing dispute, they seem to be at it again.  In late December, Qwest cut its connections to the fixed wireless provider claiming non-payment of some $1.7M that was tied up in a legal dispute.  The New Mexico PRC stepped into the fray within days, ordering them to reconnect within 48 hours.  Of course, it took about a week to get everything back to normal, and the PRC scolded both for letting things get this far.   Qwest said delays in reconnecting were caused by [Read more →]

Last week NTT America, the US arm of the Japanese giant NTT Communications (NYSE:NTT, news, filings), announced it had expanded its IPv6 backbone to five sdxc datacenters.  Of course IPv6 is the designated successor to IPv4, whose address space will run out completely in a few years.  What does that mean?  Just that IPv4 was designed long ago, when the internet we know today seemed unfathomably large.  [Read more →]

Following on the unspectacular yet solid performance of Verizon (NYSE:VZ, news, filings), telecommunications giant AT&T (NYSE:T, news, filings) seems to have had a similar quarter:  nothing spectacular, but the sky isn’t falling either.  Revenues of $31.1B weren’t spectacular but still respectable, and likewise EPS of $0.64 was basically inline with the street, it certainly does not appear to lend any support to the macroeconomic death spiral [Read more →]

Telecommunications goliath Verizon (NYSE:VZ, news, filings) reported Q4 earnings this morning, and at first glance things look passable.  Not blockbuster, but considering the state of the economy I don’t see any black eyes.  The spectre of increased landline losses has loomed large in this environment, but nothing really changed much in Q4.  Landlines in service declined by about 2.5% to 36.2M – a slower rate than in Q3 and pretty much in-line with what we were seeing before Wall Street collapsed. [Read more →]

Netflix (NASDAQ:NFLX, news, filings) reported fourth quarter results that beat all expectations yesterday.  Their subscriber count rose to 9.4M, a rather unexpected number since just last quarter they reduced the upper end of projections from 9.25M to 9.15M only to blow past both.  Revenue was $359.6M and from that the company managed to earn $0.38 per share.  But doesn’t Netflix sell to consumers who have spent the last three months cowering from the economy and deciding what to cut from their budgets?  [Read more →]

The international wholesale division of Deutsche Telecom AG (ETR:DTE, news, filings) entered the content delivery (CDN) business today, announcing a partnership with Edgecast.   They are the sixth carrier to enter the CDN marketplace in any substantial way, and the first based in Europe.  One wonders why they didn’t just buy Edgecast, which is about a hundredth or even a thousandth [Read more →]

In what has to be one of the more predictable job actions of this new year, Sprint Nextel (NYSE:S, news, filings) has announced the elimination of some 8000 positions as part of an effort to save some $1.2B in annual labor costs.  While this includes 850 that were going under a voluntary separation plan already, it is painfully obvious that most of the rest will be of the involuntary nature.  For all those out there who stand to be affected [Read more →]

There is a report that British Telecom (NYSE:BT, news, filings) is considering re-entering the wireless business, yet again.  It happens every now again, at one point last year they were thought to be considering a WiMax buildout.  This time, the rumor involves some sort of joint venture between T-Mobile and 3.  Of course, BT does offer mobile services, but as an MVNO.  They used to have a mobile arm, but that was split off, rename O2 and was later purchased by [Read more →]

Earnings season started last week, but for telecom and internet infrastructure the first big shoes to drop will be Verizon (NYSE:VZ, news, filings) on Tuesday and AT&T (NYSE:T, news, filings) on Wednesday.  Because they are so large, any effects from the economic downturn must show up in their results.  We can perhaps take their results as a barometer for the entire sector, upon which we can judge the smaller players and specialists.  Because they are so [Read more →]

Earlier today, the jury came back with a verdict in the CDN patent suit between Level 3 Communications (NYSE:LVLT, news, filings) and Limelight Networks (NASDAQ:LLNW, news, filings), declaring that Limelight did not infringe on either of the two patents.  The jury did not declare either patent invalid, but simply said there was no infringement.  Level 3 may still appeal the verdict and the appeals process could take a year or two, but this is a better result for Limelight than last year’s loss to Akamai (NASDAQ:AKAM, news, filings) with a $45M payout that is still under appeal.  [Read more →]

Competitive telecommunications carrier PAETEC (news, filings) announced its expansion to Portland, Oregon yesterday, opening a sales office and adding 15 staff in the new market.  They will be offering a full range of data and voice products to enterprises large and small.  Portland is a more traditional market for PAETEC, meaning they don’t have their own fiber but rather lease from those who do.  That does make expansion a bit easier to do in a difficult economic climate since [Read more →]

British Telecom (NYSE:BT, news, filings) pre-announced today that they will take a £340M charge ($472M) in their Global Services (BTGS) division. Often such write-offs are for things like goodwill, and while they aren’t great they are usually an acknowledgment of something the market already knows. That does not appear to be the case here. Rather, BTGS had to re-evaluate large contracts to “take into account a more cautious view of the recognition of cost efficiencies and other changes in assumptions and estimates, particularly in light of the current economic outlook.”

Translation?  The [Read more →]

We’ve been hearing of special cloaking materials for a while now, and it’s still a concept right out of science fiction.  The applications the press dreams up are generally far beyond reality, but an article over on Yahoo this morning caught my eye.  You know how hard it is to get full wireless coverage, to get every last dead spot covered?  What if you could just cloak that building, tower, or tree in the way?   Just apply a cloaking material to it, and wireless signals will just bend [Read more →]

Late yesterday, TW Telecom (NASDAQ:TWTC, news, filings) announced they have adopted a rights plan designed to protect their Net Operating Losses (NOLs).  The reason given is that unprecedented market volatility and unclear reporting requirements make it possible that a technical change of control could occur accidentally, and the company’s access to its NOLs could then be restricted.  Companies in the telecom space are no stranger to NOLs.  If they aren’t an RBOC, they probably [Read more →]

A few days ago, TelecomRamblings’s RSS feed switched from Feedburner to Google, as part of Google’s assimilation of Feedburner feeds.  Google of course, thinks everything went perfectly and the old address forwards to the new one.  However, it appears to do so very slowly, so readers subscribed via the old method don’t see new posts for a while – especially Firefox LiveBookmarks and Bloglines, but also Google Reader itself sometimes it seems.  If this is affecting you, simply resubscribe by clicking on this button:  or any other RSS button on www.telecomramblings.com, then just delete the old subscription via whatever reader you use. [Read more →]

Over the weekend, the FCC filed a letter to Comcast asking for more information about the network management plan they rolled out in September.  That plan seemed pretty bland at the time, slowing bandwidth speeds for bandwidth hogs based simply on total usage rather than targeting specific applications.  What’s the problem?  Well, it seems that Comcast’s VoIP platform doesn’t get slowed down when this happens, whereas other VoIP traffic does.  Where Comcast got the brilliant idea to advertise this as an advantage despite how it looks I’ll never know, it’s as if someone put a kick-me sign on their own butt. [Read more →]

At the Pacific Telecommunications Council (PTC), glbc announced today that they are upgrading their Atlantic Crossing 1 cable.  That’s the original cable from 1998, as opposed to the larger AC-1/Yellow which it shares with Level 3 Communications (NYSE:LVLT, news, filings).  Global Crossing is adding some 600Gbps to AC-1, which is a hefty pile that should be enough for a year or two or three. [Read more →]

XO Holdings (news, filings) has inked a deal with Pacific Crossing for capacity on the PC-1 cable, hooking up at Grover Beach with access to Japan, targeting Asian customers.  This is a new and somewhat surprising move by XO, which as recently as July had little capex to spend on expansion.  The refinancing of their debt by majority owner Carl Icahn gave them enough cash to do something, and I have been waiting to see what they might have on the drawing board.  Apparently, it was [Read more →]

Internet backbone operator Level 3 Communications (NYSE:LVLT, news, filings) today announced that they have been selected by the Blue Cross and Blue Shield Association (BCBSA) as a national provider.  Level 3 will extend a wide range of services (voice, data, video) to all 39 BCBSA companies nationwide, taking full advantage of its metro and longhaul footprint.  The exchange of medical data is sure to be one of the big growth areas in networking over the [Read more →]

Yesterday, Verizon (NYSE:VZ, news, filings) announced further developments in its Verizon Business division’s international expansion.  Their Pacific mesh network, begun in 2007, has been completed after the final extension to Singapore.  The seven way mesh across the Pacific, which uses capacity on the new Trans Pacific Express cable as well as many others, is designed to seamlessly reroute traffic on cable cuts with greater reliability than before.  In parallel, a dozen [Read more →]

On Friday, Dan Rayburn offered an update on CDN pricing trends for video delivery in the fourth quarter – as always, it’s worth a read.  Amongst the data is that CDN pricing in Q4 was basically consistent with Q3.  Could it be that the economic crisis has injected pricing rationality into the market?  Year over year pricing per GB delivered fell 30-35%.  That is still a pretty hefty pricing decline that roughly (and IMHO properly) matches what the IP transit market has done this year.  But it is of course only half the story since traffic growth over CDNs has been strong.  How much traffic growth does it take to balance a 30-35% pricing decline?  The number is 50%.  Was CDN traffic growth above 50% in 2008?  Yes I think so, and therefore the pie is still growing.  [Read more →]