Telecom Ramblings

There are some balance sheet moves that don’t cost anything but which hint at M&A activity, and therefore can be used to feint.  Others have a price tag, and generally mean there is fire under the smoke.  Level 3 Communications (LVLT: chart, news) today announced a consent solicitation for its 12.25% bonds due 2013, seeking to change its terms slightly in exchange for a one time payment of 0.75%.  Essentially, in the event of an acquisition they want to be able to use the cash flows of acquired assets on a pro forma basis to justify additional debt.  In layman’s terms, [Read more →]

ImClone Systems has expanded its relationship with Level 3 Communications (LVLT: chart, news), moving from a few transport links to a package including colocation, IP transit, and IPVPN as well.  The network will hook up datacenters in Newark and Frankfurt to ImClone’s two locations in New Jersey, one in New York City, and one in Heidelberg, Germany.  One of the drivers behind the deal is apparently the need to transfer large files between Germany and the NY Metro area, presumably large amounts of medical research data.   [Read more →]

The summer season officially started this week, and along with it has come the announcements of several expansions that span the internet infrastructure sector.

In the metro fiber space, Zayo is expanding deep into Youngstown, Ohio. They will be lighting 60 miles in order to reach key locations such as mobile switching centers, central offices and data centers in the metro area.  The first customer apparently will be [Read more →]

European alternative backbone Colt Telecom (news) announced today the selection and deployment of DWDM  gear from Infinera (INFN: chart, news) on its intercity network.  The gear is already live in eight countries:  Belgium, France, Germany,  Italy, The Netherlands, Spain, Switzerland, and the UK.  The speed of that roll out parallels others who have chosen Infinera gear.  Actually, it seems like it gets faster every year as the industry gets more and more comfortable with PICs.  [Read more →]

In an SEC filing today, Level 3 Communications (LVLT: chart, news) 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 →]

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 →]

Last week, comments by CEO John Legere of Global Crossing (GLBC: chart, news)  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 (SVVS: chart, news).  [Read more →]

Limelight Networks (LLNW: chart, news) 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 (NTT: chart, news) and Global Crossing (GLBC: chart, news) 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 →]

With the new M&A buzz being the possible JV between Level 3 Communications (LVLT: chart, news) and Sprint Nextel (S: chart, news), 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 (S: chart, news) and Level 3 Communications (LVLT: chart, news) 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 →]

Not content with sending extra personnel and equipment into the wilds of upstate New York and southern Texas, Level 3 Communications (LVLT: chart, news) 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 →]