On Akamai and the Cloud

May 1st, 2009

Ryan Lawler over on Contentinople has an interesting piece on Akamai's terminology shift recently, placing its own distributed architecture under the umbrella of cloud computing.   I have talked about the relationship between the CDN and the cloud before, albeit clumsily, and what Akamai (NASDAQ:AKAM, news, filings) said parallels some of my own thoughts.  When it comes to virtualization, it's not just about the servers.  The network matters, and that Akamai has leveraged a distributed, virtualized [Read more →]

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Neutral Tandem Reports From the Twilight Zone

April 30th, 2009

tndm reported earnings this morning, offering up revenues of $38.2M, adjusted EBITDA of $19.1M and earnings per share of $0.27.  All three metrics were well above consensus estimates, and the company raised guidance for revenues to $158-165M and adjusted EBITDA to $74-78M.  I'd go on with other metrics, but it would sound the same - they had a fantastic quarter.  Yes, again.  Isn't there supposed to be [Read more →]

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TeliaSonera Selects Infinera for US Network

April 30th, 2009

The international carrier arm of Scandanavian giant TeliaSonera AB (ETR:TLS, news, filings) has chosen to deploy gear from Infinera (NASDAQ:INFN, news, filings) in its US network.  This is the second Tier-1 European carrier customer announced by Infinera, the first was Deutsche Telecom last summer.  Like all gear makers, Infinera has seen revenues recede due to carrier spending, but while existing customers may be delaying expansions they have been doing pretty well with new customers, and that will give them some extra mojo when the rebound finally arrives. [Read more →]

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Rumor Mill: China Telecom Eyeing Pacnet?

April 30th, 2009

Is China Telecom (NYSE:CHA, news, filings) about to snap up Pacnet?  According to sources familiar with the discussions, due diligence has been going on for some weeks now and China Telecom's interest seems real, although financial details of such a deal are not yet clear.  Pacnet, which operates the old Asia Global Crossing cables amongst other assets, has been making noise for the past year and there has been M&A talk around them several times.  However, while those rumors - a bid for AAPT or for a content delivery network - never made much sense to me, this one actually does both on strategic and financial grounds.  Pacnet's recent [Read more →]

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Savvis Shines in Q2

April 29th, 2009

Colocation and hosting provider Savvis (news, filings) [a subsidiary of CenturyLink (NYSE:CTL, news, filings)] reported earnings this morning (it's been a busy week) and it seems that fears of a difficult year have proven unfounded thus far.  Revenues of $221.5M were down slightly sequentially overall, yet still better than I expected.  EBITDA of $58.8M and earnings per share of $0.01 were positive surprises, and the company raised guidance for both EBITDA and free cash flow for the full year 2009. [Read more →]

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Earthlink Rides On Past the Sunset

April 29th, 2009

Remember Earthlink (NASDAQ:ELNK, news, filings)?  It was just last year that it seemed like everything was falling apart for the company, as its various efforts to leapfrog its dialup business floundered.  But not only are they still out there, they're still profitable and they actually had a very nice first quarter.   Revenues of $199.1M and earnings per share of $0.30 were some $10M and $0.05 above expectations, respectively.  Despite the recession, they raised EBITDA guidance for the year and continued to buy back stock during the quarter. [Read more →]

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Switch and Data Powers Onward

April 29th, 2009

It is quite clear by now that the colocation and datacenter sector is weathering the recession better than almost anyone in the tech space.  sdxc reported first quarter earnings today and followed the lead of Equinix (NASDAQ:EQIX, news, filings), shrugging off the majority of economic pressures.  Revenues of $47.1M were up 18% from the same quarter last year and 2.8% sequentially.  EBITDA also improved to $16.6M, up from both $15.8M last quarter and $12.6M in the same quarter last year.  The loss per share of [Read more →]

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TheJuice on Level 3’s Q1

April 29th, 2009

[TheJuice blogs about his financial models and projections for telecom companies, most frequently about Level 3 Communications. Do you want a turn at the microphone? Contact the webmaster]

Hi all. Below are my comments on Q109. [Read more →]

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The Economy Takes a Big Bite Out of Level 3

April 28th, 2009

Internet backbone provider Level 3 Communications (NYSE:LVLT, news, filings) reported earnings this morning, checking in with a loss of $0.08 per share, largely in-line with expectations on that front.  Revenues of $980, however, were were down substantially from Q4, well below most estimates and also the projections my own model which is obviously not handling the recession well at all.  Thejuice's predictions were far closer to the mark, but even he was too high. [Read more →]

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Metro Fiber Penetration On the Rise

April 28th, 2009

According to a study by Vertical Systems Group, 19.1% of commercial buildings in the USA with 20 or more employees now have fiber.  That is up from just 10.9% just four years ago.  That's real progress of course, but the percentage is still small and it is just changing too slowly.  Looking at it from the other side, 80.9% of such buildings are served primarily by copper, down from 89.1% four years ago.  Comparing that with consumer wireline losses at AT&T (NYSE:T, news, filings), Verizon (NYSE:VZ, news, filings) and others which are more on the order of 10% in the last year alone, one can see that commercial buildings are still getting the very short end of the stick.  [Read more →]

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XO Expands to Raleigh

April 27th, 2009

Competitive telecom XO Holdings (news, filings) announced today that it has expanded its network again in North Carolina, this time with services in Raleigh. This move follows closely on last year's expansion to Charlotte, and implies that the previous expansion went well enough for an encore performance.  They seem to be fully operational in Raleigh already, offering both data and voice services to the enterprise. [Read more →]

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Level 3 Earnings Primer: Q1/2009

April 27th, 2009

On Tuesday morning, Level 3 Communications (NYSE:LVLT, news, filings) reports earnings for the first quarter of 2009.  As regular readers of this blog know, both I and thejuice follow the company closely.  As the the largest of the non-RBOC USA backbones, their earnings reports can be complex.  This primer is designed to help track and interpret the company's progress or lack thereof.  Personally, I expect no earthshattering news tomorrow.  The economic environment is horrible, but so far bandwidth itself seems [Read more →]

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Limelight Is On a Roll

April 27th, 2009

Over the weekend, CDN upstart Limelight Networks (NASDAQ:LLNW, news, filings) won another big court victory.  The ruling sets aside last year's verdict, in which Limelight was said to be infringing on Akamai's patents and was penalized some $45 with more perhaps to come.  Limelight now therefore expects to reverse expenses of $66M it has accrued for it, although I'm not sure when that actually comes into play on the balance sheet - Akamai (NASDAQ:AKAM, news, filings) will almost certainly appeal.  That's a nice sum of money to free up, but far more important is that the dark clouds of litigation that have been hanging over the company seem to be [Read more →]

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Juniper’s Q1: Hello From the Bottom?

April 24th, 2009

Router specialist Juniper Networks (NASDAQ:JNPR, news, filings) reported earnings after the bell yesterday, and met  expectations with revenues of $764M and adjusted earnings of $0.17.  Ugly?  Definitely, but ugly was entirely expected.  The question in everyone's minds is whether the telecom equipment makers have hit bottom.  The sector is famously sensitive to economic trends due to the capex intensive nature of tech businesses.  When their customers even think about sneezing, equipment vendors are already running a fever.  But it works the other way too, the rebound can be similarly powerful. [Read more →]

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Trenching Your Own Fiber

April 24th, 2009

I ran across this interesting bit over on TelephonyOnline that came out of the National Association of Broadcasters (NAB) Show this week.   Norwegian triple play provider Lyse Tele has a unique way to do FTTH. They build fiber to the curb, then usually just give the customer instructions on how to connect the house itself.  That's right, the customer gets to dig his own trench, and 80% of their 130K customers have done it this way in exchange for a discount. Given the personal stake one then puts into the build, it's understandable that churn rates are subsequently very low. [Read more →]

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IPhone Sales Beat Out Wireline Losses at AT&T

April 23rd, 2009

Telecom's 800 metric ton Gorilla AT&T (NYSE:T, news, filings) reported earnings this morning, and apparently someone forgot to tell them about this 'worst recession since Hoover' thing.  Riding the back of 1.6M iPhone activations, they earned $0.53 per share, some 5 cents higher than expected despite revenues of $30.6B checking in lighter than the expected $31.1B.  No doubt analysts and the media will consider the latter more important since it is in the 'correct' direction.  Overall, AT&T managed a nice quarter despite the economy, though I'd hate to see [Read more →]

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Equinix Strides Easily Into Q2

April 23rd, 2009

Colocation specialist Equinix (NASDAQ:EQIX, news, filings) shrugged off the effects of the economy and posted some nice results.  Revenues of $199.2M met guidance and were up 4% sequentially and 26% over this quarter last year.  EBITDA of $91.4 was above guidance of $86-88M, leading to a minor raising/tightening of full year guidance from $365-385M to $370M-385M.  Revenue and EBITDA for Q2 are projected to be $206-210M and $92-94M, respectively.  Equinix had started the year somewhat cautiously due to the difficult economic conditions, but it seems to have a very good handle on things.   [Read more →]

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Conterra: A Window Into Wireless Backhaul – Part 2

April 22nd, 2009

In part 1 of this profile, I gave my own impressions of Conterra and its approach to the market.  Now let's hear from the company directly.  I had the opportunity to talk with Stephen Leeolou, CEO and Chairman of Conterra Telecom Services.  Prior to Conterra, Mr. Leeolou co-founded and acted as COO then CEO of Vanguard Cellular Systems from 1982-1999 until selling it to AT&T for almost $2B.

TR: How has the economic crisis affected Conterra's sales pipeline and the wireless backhaul industry in general?

SL: We have just [Read more →]

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Conterra: A Window Into Wireless Backhaul – Part 1

April 22nd, 2009

In this profile, Telecom Ramblings looks at the wireless backhaul provider Conterra Telecom Services.  I have traditionally been partial toward fiberoptic networks of course, but fiber does have its imitations and I am rapidly becoming interested in hybrid fiber/wireless networks.  When you get outside the main metro loops yet still need more bandwidth than copper can ever offer, that's where providers like Conterra step in to fill the gap.  They design, build, and operate the wireless middle mile and last mile links of hybrid fiber-wireless metro networks, with over 6000 [Read more →]

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Infinera Trudges Through the Storm, Reports Q1

April 22nd, 2009

Everyone has long expected an ugly first quarter from telecom equipment providers, the only question really was whether it was worse than expected.  Today we heard from DWDM specialist Infinera (NASDAQ:INFN, news, filings), which basically reported in-line with expectations.  Revenue of $66.6M were down from $86.2M in Q4, a hefty drop but one everyone knew was coming since that's what happens in the equipment space when carriers slash capex to the bone in a recession.  Adjusted gross margins fell to 31% from 36% in Q4, and the adjusted net loss was $0.19.  Some news reports call that a miss by $0.02, but predicting EPS for Q1 was always a dubious prospect at best.  Frankly I'm amazed [Read more →]

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AT&T Unveils Managed Private CDNs

April 21st, 2009

Telecommunications giant AT&T (NYSE:T, news, filings) was one of the first network providers to enter the CDN business, but it has also been one of the quietest.  That changed today with their announcement of Private Content Distribution Services, or AT&T PCDS for short.  What makes a 'Private Network' CDN different from the CDNs we usually talk about?  Apparently, it lives behind the corporate firewall.  This offering is for enterprises seeking to distribute content not to the consumer, but to its own constituent parts.  The content in question would be things like [Read more →]

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XO: A Valuation Model

April 21st, 2009

[This is an anonymous guest post by Homer. The author is a denizen of the the message boards on InvestorVillage and is long XOHO. Do you want a turn at the microphone?]

The Basic Model:

The VALUE of the common equity of a firm is the value of the residual claim on the assets. For most ongoing concerns this is equal to the present value of future cash flows minus net liabilities. Thus, we need to look at three variables: [Read more →]

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Tata Scores TV5MONDE CDN Deal

April 21st, 2009

Tata Communications (news, filings) announced today that they have been selected by TV5MONDE to stream live events via the internet.  TV5 is a global French-speaking broadcast network, that reaches 180M households from some 200 countries and has programming that originates on three continents.  The global nature of its viewership is undoubtedly the driving force behind this deal, as most content delivery networks remain heavily focused on the US.  Tata's network, which is comprised of the former Teleglobe and Tyco Global Network assets, and the CDN services they have been building on top are more geared toward wider international distribution.  No doubt the assets in and around Quebec helped some.   [Read more →]

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