Telecom Ramblings

Level 3 (LVLT) registered a shelf in an SEC filing today that allows them, basically, to sell indeterminate amounts of anything they want to anyone with a pulse.  Ok, it’s not that wide open, but it does position them to offer any of the following: [Read more →]

Now, I’m used to weak telecom reporting from some parts of the media, but this one really takes the cake.  The Washington Post, that bastion of newsworthiness, managed to write this wowser: [Read more →]

Again.  The FCC continues to rewrite the definition of the word ‘deadline’, canceling its planned vote tomorrow on an overhaul of intercarrier compensation.  Today four commissioners rebelled against Chairman Kevin Martin’s proposal.  Precisely why is hard to say, because apparently it has not been made available for public view. [Read more →]

Today Sprint turned its peering connection with Cogent back on, as you can see here.  So is the war over?  It doesn’t look like it, it’s more of a unilateral ceasefire by Sprint, to let the women and children clear out. Sprint has explicitly stated that the reconnection is temporary.  In their own words: [Read more →]

In a filing last week, internet solutions provider Internap (INAP) finally admitted what everyone already knew, that it paid too much for Vitalstream, and said they would write off some $99.7M in goodwill.  That their entry into the CDN business via M&A and subsequent integration fiasco have done serious damage to shareholder value really can’t be questioned.  The exact number to write off, of course, is more about art [Read more →]

The severing of peering connections between Cogent and Sprint the other day sent shock waves throughout the sector even as everyone tried to figure out just what had happened and what the extent of the damage was.  There wasn’t ever much hope that this would be a short interruption, and in fact everyone seems to be settling in for a long one.  The disagreement between the two, at least in public, seems to be [Read more →]

A border war has broken out between tier-1 providers Cogent Communications (CCOI) and Sprint Nextel (S), they are no longer exchanging traffic.  That means that single homed clients of Cogent cannot access data on Sprint’s network, and vice versa.  The internet is, for the time being, partitioned, as one can see here.  Cogent issued its usual PR within hours of the interruption blaming everything on Sprint.  But of course, this is not Cogent’s first peering war, or even its second, or third. [Read more →]

Both CBeyond and 8×8, two rather different providers of VoIP services to small business customers, reported their quarterly earnings today, and in both cases results were steady though not spectacular.  But then, expecting spectacular results in this environment would be a bit loony.  What matters is the implication that while churn is surely rising somewhat, SME telecom purchases are not suffering all that much. [Read more →]

Content Delivery heavyweight Akamai reports Q3 earnings today after the market close.  The CDN market has been quite an interesting place this year, with literally dozens of upstarts raising money and building out competing products, lawsuits clouding the skies, P2P going in and out of fashion, and a half dozen network operators jockeying for pole position.  Through it all, the only company that really matters [Read more →]

Ok, here’s the model with Q3 results and Q4/YE estimates.  As I indicated on the IV board, generally speaking the numbers were real, no gimmicks, but they were a bit light in terms new growth in CSR’s as well as improvement in working capital.  Neither of these should be a surprise considering the current environment; I just was a wee bit too [Read more →]

Colocation and hosting provider Savvis (SVVS) reported earnings today, with some rare good news.  Revenues of $218.4M were up 3% sequentially as expected, adjusted EBITDA of $47.7M was likewise solid, and the loss per share of 0.01 was better than anticipated.  Current 2008 guidance was reaffirmed despite the economic climate, and overall the results were perhaps Savvis’s best quarter in some time.  But more important in the near term was what the company said about its financial vertical. [Read more →]

As with Equinix last week, datacenter specialist Switch & Data reported earnings Tuesday and didn’t even blink in these difficult times.  Revenues of $44.1M and EBITDA of $14.0M were in-line with guidance, and EPS of $0.00 was lower because costs were a bit higher than in past quarters as expected due to the rollout of new datacenters in advance of revenue derived from them. [Read more →]

Here’s something new to keep you busy.  This spreadsheet tracks various valuation metrics for LVLT, CCOI and TWTC.  I get real-time bond pricing from http://cxa.marketwatch.com/finra/MarketData/Default.aspx and stock quotes from www.yahoo.com.  For each firm there are aspects of their capital structure that are not traded thus there is no market price.  Feel free to put whatever number you want in for those.  I have them at 100% because they would be first in line in case of BK.  Also note that an entire [Read more →]

Well, it had to happen sooner or later. Today DuPont Fabros (DFT) suspended construction on a new datacenter project in Santa Clara.  They had needed some $300-400M to fund the project, but were only able to raise $100M from a syndicate led by Keybank.  Instead, they will use those funds to [Read more →]

Apparently unwilling to wait for WiMAX, Cox Communications is going to build its own 3G cell network, in-region.  Out of region, they will strike a deal with Sprint-Nextel, and they are apparently planning to trial LTE.  By contrast, Comcast seems to be planning WiMAX femtocells in a partnership with Clearwire.  Cox’s move seems to put them on a quite different path. [Read more →]

Colocation provider Switch & Data (SDXC) reports earnings on Tuesday after the market closes, following on the heels of Equinix’s solid report.  Switch & Data, which went public in an IPO in the first quarter of 2007, operates some 34 carrier neutral datacenters in 23 markets in North America, and like Equinix has been investing heavily in new datacenter space.  Will they be forced to slow down their buildouts because of the economy?  Let’s [Read more →]

Verizon (VZ) reported earnings today, checking in with $24.8B in revenues and its usual billions of dollars of cashflow.  Adjusted EPS of $0.66 seems to have been what the market was expecting.  While the company didn’t discuss the effects of the overall economy directly in their press release, no doubt they will say more at their CC later this morning.  But for now, if we didn’t already know the world was ending, it sure wouldn’t be apparent from Verizon’s earnings. [Read more →]

CenturyTel (CTL) is buying Embarq (EQ).  Apparently the M&A market in telecom isn’t quite dead!  In this case though, it’s a bit odd to think about CTL as the buyer since it is the smaller of the two.  Embarq’s revenue hovers at $6.3B, whereas CenturyTel is in the $2.6B range.  Indeed, CenturyTel shareholders would own only 35% of the combined company if the merger does in fact happen. [Read more →]

Two weeks ago, I looked at the new valuations of nextgen facilities-based telecoms, and it seemed that the markets had decided on an enterprise value to EBITDA ratio of roughly 5-6.  Well, the market apparently wasn’t done.  While only LVLT has reported, the market has continued to devalue the sector indiscriminately.  So let’s take a look at [Read more →]

Hosting specialist Rackspace (RAX) made a move on the cloud space this week.  And it wasn’t a feint, it was a pretty substantial step.  Rackspace bought two cloud-based companies, Slicehost and Jungle Disk, and established partnerships with Limelight and Sonian.  There was quite a bit of talk on the subject in the blogosphere, but what [Read more →]

Level 3 Communications (LVLT) reported earnings this morning, with mixed results.  Communications EBITDA was $257M, above the expectations of many, a feat accomplished with continued impressive cost savings.  Good thing too, because revenue growth continued to lag a bit, with total revenues of $1.070B, and core revenues of $964M.  Free cash flow was $-4M, or basically neutral.  Comparing with my estimates in yesterday’s primer, I wasn’t too far off. [Read more →]

Datacenter specialist Equinix (EQIX) reported earnings today, and the results were as muscular as past quarters.  Comparing with guidance as discussed in my earnings preview post the other day, revenues were solid at $183.7M and EBITDA exceeded guidance at $77M.  Gross margins of 62% and EPS of 0.19 were both good numbers as well.  Full year projections were narrowed within the current ranges.  Capex was [Read more →]

That’s what the media is reporting this morning.  That’s what this economic crisis has done to our minds.  AT&T reported earnings this morning, and they apparently missed on the profit number because iPhone sales – which are subsidized – were substantially higher than expected, and the headlines of course focus on the miss.  Does the market really believe that [Read more →]