More on the Potential Sale of Qwest Longhaul

April 3rd, 2009

Wow!  I now hereby take the possible sale of the q longhaul network seriously.  Why?  Well, unlike all other such M&A rumors over the last year, this time the buzz generated was incredible - Telecom Ramblings had its biggest traffic day ever, and the audience came largely from within the industry itself.  That doesn't mean it is true obviously, but it does mean that a heck of a lot of people who may know things are taking it seriously, so I will too.  So today let's look at a few other details. [Read more →]

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Brady Rafuse to Take Over At euNetworks

April 3rd, 2009

Level 3 alumni and blogging neighbor Brady Rafuse has a new gig lined up.  He will be taking over as CEO at euNetworks.  Brady of course headed Level 3's European operations for years, a move into a CEO position in the same market is a natural step forward.  Good luck Brady!  No word yet on whether his blog will continue in its present form, but perhaps he will take a page from former colleague Dan Caruso amongst others and make his blog into a valuable communication tool, the voice of euNetworks? [Read more →]

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Who Might Buy Qwest Longhaul?

April 2nd, 2009

According to several sources, q is actively seeking a buyer for its longhaul network.  I've lost track of how many times this has been rumored over the last 5 years, is it an even dozen yet?  But anyway, the rumored price is in the $2-3B range, and although it isn't clear just how much of Qwest would be part of such a deal it surely isn't doing over $2B in revenues, nor is that part likely to have EBITDA above the 10-20% range.  Hence, the EV/EBITDA ratio for such a sale would probably be well above current market valuations.  Let's take a look at the potential suitors in some detail: [Read more →]

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OpenRange, Level 3 Team for Rural WiMAX

April 1st, 2009

In an interesting announcement this morning, Open Range Communication will be leveraging the extended on-net services of Level 3 Communications (NYSE:LVLT, news, filings) to provide WiMAX to rural communities.  Open Range has a bundle of funding ready to go, $100M from JP Morgan and another $267M in subsidized government loans.  Level 3 will be providing the networking infrastructure for their effort to hook up 500 communities in 17 states.  WiMAX has always seemed to me to have the clearest potential where its wide range comes into play, in other words for rural areas it seems like a [Read more →]

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Internap Cuts 10%

April 1st, 2009

As almost anyone might have expected, Internap Network Services (NASDAQ:INAP, news, filings) last night announced that 10% of its workforce will be looking for work. These days, new management nearly always means layoffs, and with Eric Cooney taking over from Jim Deblasio as CEO two weeks ago it was just a matter of time. In this case, it is mainly back office staff positions and apparently several senior management positions. Those management guys were probably leaving anyway, but the positions won't be re-filled I guess. The cost savings will be approximately $5M annually, and the company will take a $1.2M charge in the 2nd quarter for severance and such. [Read more →]

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Level 3’s Crowe Achieves Enlightenment

April 1st, 2009

Kathmandu, Nepal: Sources within Level 3 indicate that CEO James Crowe has moved his office to an undisclosed monastery somewhere deep in the Himalayas, and has become a Buddhist monk.  This news finally lays to rest the simmering speculation regarding his trips to Asia over the past few years, where it is now clear he has been seeking both spiritual and technological enlightenment.  His duties at Level 3 remain unchanged and he will be melding his own new inner Qi with telepresence equipment from Cisco in order to conduct business in Broomfield remotely.  He can now walk anywhere on the Level 3 corporate campus as a fully independent and lifelike hologram. [Read more →]

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Limelight Opens a New Front Against Akamai

March 31st, 2009

Limelight Networks (NASDAQ:LLNW, news, filings) has entered the small object delivery and website acceleration market with a new product called LimelightSITE. Dan Rayburn has a great summary of the new product and where it fits.  Basically this is a well defended bastion of Akamai (NASDAQ:AKAM, news, filings) - the cash machine on which its margins really hinge.  To challenge Akamai here implies that Limelight is feeling increasingly confident, and it seems as if Akamai can do little more than play defense.  That's the price of being king of the hill, there is nowhere new to climb but there are plenty of ways to go down.  On the other hand, it's not exactly a bad problem to have. [Read more →]

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Profile: Hibernia Atlantic Comes Ashore – Part 2

March 31st, 2009

In part 1 of this profile, we looked at Hibernia Atlantic from the outside.  Here we get to hear from the company directly.  I had the opportunity to talk with Eric Gutshall, Executive Vice President of Sales and Marketing.  Eric has been with Hibernia Atlantic since its early days when it was little more than a mostly empty cable and a business plan, and has been an integral part of its development.

TR:
Where does Hibernia Atlantic see demand coming from in 2009? [Read more →]

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Profile: Hibernia Atlantic Comes Ashore – Part 1

March 31st, 2009

For the third profile in this series, Telecom Ramblings looks at Hibernia Atlantic.  The company opened its doors under the wing of Columbia Ventures six years ago with one asset: a shiny new transatlantic cable completed by 360Networks before its implosion.  That cable had a uniquely diverse northern route, but was still practically empty at the time and the transatlantic bandwidth market was in shambles.  For many, they fell off the radar screen or were just never on it.  Now as we close the decade, they have driven revenues toward the range of [Read more →]

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Pacific Crossing Prepares to Sell Out

March 30th, 2009

According to a report in the Financial Times, Pacific Crossing is about to be gobbled up.  The company, which runs the PC-1 cable between California and Japan, was once a part of the empire of glbc back in the bubble days.  After the crash, Pivotal Private Equity was poised to take control of the company out of BK court.  But that deal fell apart and then the assets spent an inordinate amount of time in BK court due to disputes over ownership of landing stations and compensation from its prior owners and such - it looked like they might stay in limbo for eternity.  But emerge they did, and after a few years on their own it now appears that PC-1 will now find a real home. [Read more →]

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Metro Fiber Providers: Relative Size

March 30th, 2009

Previously I looked at on-net building density as a way to classify metro fiber providers.  One of the major features that classification showed was that often smaller metro fiber providers tend to hook up more buildings per mile of fiber.  Now size isn't everything, but it does matter.  And to get a feel for the sector it is important to keep a feel for relative size of the participants.  Once again, this is not a race, just kind of a weigh-in.  I looked at two obvious metrics: [Read more →]

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The Perils of Integration Expertise

March 29th, 2009

In response to my post on the merits of a TWTC buyout of XO, reader BBS astutely commented:

"They have the integration expertise" this is a very subjective assumption. Xspedius may have gone well, but that, as they say is no indicator of future results. XO has integration experience too… remember Allegiance? How about LVLT’s integration experience, which by any measure historically has been abominably bad. Circuit Engineering, switch (hard or soft) and OSS platforms in the telecom industry are much harder to integrate than traditional operating systems such as CRM, HR, and others. As a MFSWorldCom vet, you can understand why I remain very skeptical of any claims of easy integration among telecoms/ fiber network providers.

Indeed it is a subjective assumption, and it is quite [Read more →]

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Why TW Telecom Should Buy XO Communications

March 27th, 2009

The other day I mentioned that TW Telecom (NASDAQ:TWTC, news, filings) seems like it should be ready to make a big move.  In 2009 the company became profitable at last, and entered this recession in a position of stability and with continued growth in mind.  Such difficult times as these can be opportunities for those with the means, and the lack of easy access to capital makes this a buyers market if there ever was one.  And there is one M&A possibility that stands out from the rest for TW Telecom, one that is both game-changing and entirely feasible:  XO Holdings (news, filings).  No, I have nobody whispering in my ear, in fact it is too quiet - as I have said.  I'll make the case as follows: [Read more →]

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Telefonica Selects Level 3 for National Wavelength Deal

March 26th, 2009

Level 3 Communications (NYSE:LVLT, news, filings) announced today that it has been selected to provide wavelengths on a national scale for the international wholesale arm of European telecom giant Telefonica (NYSE:TEF, news, filings).  The contract, which expands on an existing relationship, is for 10 years and represents the single largest capacity commitment in Level 3's history.  They will provide triverse routes between major PoPs, diverse routes elsewhere, and have dedicated capacity available for expansion on each route.  Essentially, Telefonica has chosen to outsource the bulk of its US transport network for the long term. [Read more →]

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On the Threat from Efficient Cloud Computing

March 26th, 2009

On Seeking Alpha yesterday, Alex Salkever posted an interesting article discussing how efficient cloud computing may change the sector.  It almost certainly will, and I'd like to add my two cents on the subject.  Specifically pertaining to datacenters, he said:

"Data center operators like Equinix (EQIX) could also feel the pinch. They all expected massive demand for custom designed homes that featured servers and other critically important hardware used to run networks and businesses. But if there is less need for servers, there is less need for data centers."

While there is certainly a kernel of truth in that, there are several misconceptions [Read more →]

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Verizon Pushes Its Longhaul Vision

March 25th, 2009

Telecommunications giant Verizon (NYSE:VZ, news, filings) has been making the rounds lately with equipment makers, trying to convince them of its vision.  Verizon apparently likes the packet-optical transport system it uses in the metro so much that it wants something just like it in the longhaul too.  Their dream gear would combine optical switching, Sonet, and especially MPLS-TP rather than Ethernet.  If they can convince anyone to develop such gear, they hope to deploy it in the 2011-2012 time frame.  [Read more →]

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TW Telecom Expands in Portland

March 25th, 2009

Not to be outdone by the little guys, national metro fiber and services provider TW Telecom (NASDAQ:TWTC, news, filings) announced an expansion of its own today.  They have constructed a new fiber loop connecting Tualatin and Lake Oswego, including the Kruse Way business district, to the company's already extensive metro network.  They have long been active in Portland, even buying some of Enron's old fiber at one point.  This expansion follows a substantial expansion in Tulsa late last year, and TW Telecom is clearly not afraid to put capital to work despite the economy. [Read more →]

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Dutch FTTH Effort Finding Banks Unwilling

March 24th, 2009

According to Rudolf van der Berg over on Internet Thought, the FTTH effort in the Netherlands has run into a little snag.  What snag? Oh just that little thing called money.  The buildout is supposed to cost some $4B, however the partners KPN (NYSE:KPN, news) and Reggefiber were supposed to contribute only 25% each.  The rest was to come from the banks, and of course we know that banks all over the world have amazingly re-learned the word 'no' (or in this case perhaps  'nee') with a vengeance.  [Read more →]

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Fiberlight and Southern Light Advance

March 24th, 2009

As if we needed more evidence that the metro fiber sector remains strong despite the economic disaster that continues to unfold, in the last few days two of the companies I have tracked have found avenues for spending and growing their businesses.  Late last week, FiberLight (news) purchased a 20 mile, 96 count fiber network serving downtown Waco Texas from independent telephone company Consolidated Communications.  The new fiber joins other Fiberlight's Texas metro assets in Dallas, Fort Worth, Houston, and San Antonio.  While it is a small purchase, it continues the trend [Read more →]

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Vodafone and Telefonica Dance the Infrastructure Tango

March 23rd, 2009

Two European telecom powers, Vodafone Group (NYSE:VOD, news, filings) and Telefonica (NYSE:TEF, news, filings), announced today that they will share mobile network infrastructure in four countries:  Spain, Germany, Ireland, and the UK.  They will be sharing sites, masts, and power supplies, while each will use its own radios and vendors.  They will therefore be able to more quickly meet the needs of European consumers, who may be buying less phones due to the recession but are nevertheless [Read more →]

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Netflix Congestion: You Ain't Seen Nothing Yet

March 23rd, 2009

There has been substantial buzz over the last week or so about Netflix (NASDAQ:NFLX, news, filings) and complaints from users about streaming difficulties.  As one might expect, some of the difficulties are simple confusion, but the phenomenon has been enough to prompt Netflix to respond on its blog.  Essentially, he blamed the ISPs for congestion problems in their networks.  That much should be obvious, it's rather hard to see Netflix deliberately slowing down its own service on some clients and not on others.  But this relatively minor flurry of criticism may foreshadow something Netflix's growing service is going to be facing all year.  Put together these pieces: [Read more →]

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Profile: RCN Metro Accelerates Into 2009 – Part II

March 20th, 2009

In Part I of this article, I gave my own impressions of RCN Metro's position in the sector and where they are heading.  In this part, Telecom Ramblings interviews Felipe Alvarez, President of RCN Metro.  Mr. Alvarez has been in the telecommunications sector for 20 years, and he came to RCN Metro via the acquisition of ConEd Communications in 2006 where he had been Chief Operating Officer.

TR: What effect has RCN Metro seen [Read more →]

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Profile: RCN Metro Accelerates Into 2009 – Part I

March 20th, 2009

Within the universe of metro fiber providers, the howling winds of the recession seem far away.  The services sold are rarely discretionary, the competition is light, and demand remains strong.  Against this backdrop, Telecom Ramblings takes a deeper look at one participant in this market: RCN Metro Optical Networks.  RCN Metro is a subsidiary of cable provider RCN Corp (NASDAQ:RCNI, news, filings), but is run as an independent entity.  They generated [Read more →]

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