Infinera, Equinix to Lead Off Earnings Season

July 20th, 2009
 

Yes, according to the event calendar it's time for another dose of financial reality in the internet infrastructure and telecom sectors.  Because earnings are a lagging indicator, actual second quarter results seem likely to remain relatively dismal and the story there will be how well the recession has been managed.  What everyone will be looking for is signs of life in guidance for the second half of the year.  Will the purse strings loosen up a bit?  With that in mind, we will hear on Tuesday from [Read more →]

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Defining Broadband

July 19th, 2009
 

A few weeks ago, the federal government chose a definition for broadband in the context of the stimulus package and the goal of extending bandwidth to all.  The bar they chose, a minimum of 768kbps down and 200kbps up, has been widely panned as a decade late.  But since then, I've been thinking that having such a 'definition' in the first place is the ludicrous part.  It just doesn't make sense to have a single threshold as our goal for every dwelling in the USA.  [Read more →]

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US Telecom Mergers: Fading Chances or Winnowing of the Field?

July 17th, 2009
 

Just a month or two ago, it seemed like every fiber network in the country was considering its options.  The second quarter began with q considering the sale of its longhaul networks, something which for a while woke up everyone from Verizon and AT&T on to Level 3 and all the way to Cogent.  Global Crossing, which has been beating the M&A drums all year, did so again bringing up the possibility of Savvis.  And then of course word leaked out that Sprint was considering contributing its wireline business toward some sort of joint venture.  Every major network was either in play or looking to buy.  But the result?  [Read more →]

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Alcatel-Lucent Introduces 100G at the Edge

July 16th, 2009
 

Telecommunications equipment giant Alcatel-Lucent (NYSE:ALU, news, filings) has taken us one more step into the world of 100G by introducing the industry’s first 100 Gigabit Ethernet service routing interface for the edge.  The new service is enabled by "unique silicon innovations" and delivers the massive bandwidth everyone is expecting from 100G.  The edge is where much of the brains of a network is located, and the introduction of 100G interfaces will help service providers [Read more →]

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German Foreign Office Chooses Orange Business

July 16th, 2009
 

Orange Business Services announced today that it has won a large contract with the German Foreign Office.   The 5 year deal involves wired connections to 180 sites worldwide, another 50 by satellite.  In addition to basic transport, other services such as VPN and Voice will be layered on top.  That's a pretty hefty deal by anyone's measure.  Orange Business had already held the precursor to this contract, which of course made it easier to keep.  But the new contract is almost double the size of the old one. [Read more →]

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AT&T, CWA Make Peace In the Midwest

July 15th, 2009
 

According to various reports, AT&T (NYSE:T, news, filings) and the Communications Workers of America (CWA) have finally broken out the peace pipes.  Not everywhere though, just in the Midwest for some 18,500 workers.  The new 3 year contract appears to be a compromise, with workers getting pay increases but also agreeing to pay more for health insurance.  It's not a done deal yet of course, union must vote on whether to accept the new contract first.  But I suspect everyone is rather tired of this by now, and if they were going to strike [Read more →]

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Internap Axes CTO Position

July 15th, 2009
 

The shakeup at Internap Network Services (NASDAQ:INAP, news, filings) continues.  From an SEC filing today:

On July 14, 2009, Internap Network Services Corporation (the "Company") announced the elimination of the Chief Technology Officer position and, as a result, that Timothy P. Sullivan's employment will terminate effective July 31, 2009. The Company anticipates entering into a separation agreement with Mr. Sullivan regarding the terms of his separation, a copy of which will be filed with the Securities and Exchange Commission following execution.

Of course, Eric Cooney just took over as the new CEO in March, and since then it apparently hasn't been a fun place to work.  The [Read more →]

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KPN Bids For the Rest of iBasis

July 14th, 2009
 

Carl Icahn isn't the only majority shareholder of a telecom looking to take advantage of the market downturn.  Dutch PTT KPN (NYSE:KPN, news) has now bid for the 44% of international VoIP wholesaler iBasis that it doesn't already own.  The proposed price of $1.55 per share was a 19% premium above Friday's close of $1.30, but since then the price has risen to $1.71 at today's close.  Apparently traders think KPN will have to raise its bid for IBasis (news) [a subsidiary of KPN (NYSE:KPN, news)] . [Read more →]

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Phoenix ONE Gains Level 3, Cox Pipes

July 14th, 2009
 

Phoenix ONE, the huge (530K square feet) new data center facility built by i/o Datacenters, continues to rack up independent fiber connections.  Yesterday both Cox Business and Level 3 announced they have brought the facility on-net. Cox and Level 3 will join Qwest and AGL Networks, and others will likely show up as well if they haven't quietly done so already.  You just can't ignore a facility of this size in an artificially constricted market for colocation space like this one.  Phoenix ONE just officially opened in late June, but the traction [Read more →]

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XO’s Minority Shareholders Gather Their Strength

July 13th, 2009
 

In response to Carl Icahn's bid for the rest of XO's common shares, shareholders have begun to organize, calling themselves the Ad Hoc XO Minority Shareholders Committee.  Their premise is that $0.55 is just too low, and that they trust neither Icahn nor the board of directors he thoroughly controls to keep their best interest at heart.  Some would put it much more colorfully, of course.  Their website is still quite minimal (heck, it's only been a couple days), but the people behind it claim to represent millions of shares already.  There are somewhere around 85 million shares not in Icahn's hands, so that is a pretty good start.    When the shareholder vote does happen, they might stand a reasonable chance [Read more →]

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Equinix Wins Another Financial Exchange

July 13th, 2009
 

There have been so many of these lately, it's as if the whole financial sector is repositioning and redesigning its IT infrastructure.  Today Equinix (NASDAQ:EQIX, news, filings) announce that the Boston Options Exchange will be locating its  primary matching engines in Equinix's NY-4 Secaucus NJ datacenter. Once there, the BOX will also participate in the Equinix Financial eXchange. This follows closely on Equinix's win at NYSE Liffe, amongst others. [Read more →]

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On The Valuation of XO

July 12th, 2009
 

In the wake of Carl Icahn's bid for the tiny piece of XO Holdings (news, filings) that he doesn't already own there has been a flurry of activity in the media and blogosphere.  Much of it centers around the amount offered versus what XO ought to be worth, and much makes no sense at all.  So I thought I'd save the rhetoric about whether Icahn's offer is good or evil or what he might do next for another post and talk about the valuation of XO itself a bit more dispassionately.  [Read more →]

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Icahn Makes His Move On XO

July 10th, 2009
 

For a long time now, many have expected the majority owner of XO Holdings (news, filings), Carl Icahn, to finally buy out the rest of the company.  Well, he's now making his move.  In a letter disclosed in an SEC filing today, it was revealed that one of his corporate entities, ACF Industries Holding Corp, has offered $0.55 per share for the rest of the common shares he doesn't already own.  And at the end of the letter, ACF made clear that they aren't interested in selling their shares to a higher bidder, meaning that this is not an auction.  This is the second red flag in the last few weeks implying that Icahn is readying XO for a sale, following the recent reabsorption of Nextlink. [Read more →]

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France Telecom Upgrades Submarine Cables

July 10th, 2009
 

According to Commsday and Telegeography, France Telecom (NYSE:FTE, news, filings) and its consortium partners have upgraded both the transatlantic TAT-14 cable and the SEA-ME-WE4 cable  which connects Europe to the Middle East and southern Asia.  TAT-14 now has doubled its lit capacity of 1.87Tbps, while SEA-ME-WE4 raised its capacity by 140%.   Both cables thus should be able to keep pace with traffic growth for another year or two. [Read more →]

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Sprint Outsources Network To Ericsson

July 9th, 2009
 

It's now official, Sprint Nextel (NYSE:S, news, filings) has signed an agreement to outsource both its wireless and wireline operations to Swedish equipment maker Ericsson (NASDAQ:ERIC, news, filings).  The seven year deal is valued at $4.5-5B and will apparently begin later this year, although it will take over a year for everything to be fully in place.  The deal is pretty much as expected based on earlier rumors, Sprint maintains ownership and control, while Ericsson does the daily monitoring and maintenance of the equipment itself.  I still don't [Read more →]

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RCN Drops Out, Zayo Still On Top For Fibernet Acquisition

July 9th, 2009
 

RCN Business (NASDAQ:RCNI, news, filings) has withdrawn its bid for ftgx, leaving Zayo with a clear path again.   Zayo and Fibernet first announced a tentative deal at the end of May for $11.45 per share, but the terms left until mid June for a better offer to appear.  RCN made what might have been such an offer at $12.50 per share just before the deadline, which seemed to indicate a bidding war might ensue. [Read more →]

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FairPoint Scrambles For Relief

July 8th, 2009
 

It is no secret that over the past year, FairPoint Communications (news, filings) has had a few integration problems.  Okay, more than a few.  Since buying Verizon (NYSE:VZ, news, filings)'s assets in northern New England, they have had all sorts of problems up there.  In the process, they have run up penalties with local phone companies of $2.8M due to subpar service and those pesky service level agreements and such.  The company has now asked the Maine Public Utilities commission to [Read more →]

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Clearwire To Turn Up Las Vegas, Looks to Chicago, Dallas

July 7th, 2009
 

WiMAX protagonist clwr is ready to turn up its fourth market.  Las Vegas will soon sit alongside Baltimore, Portland, and Atlanta.  Of course, this market has been under construction and testing for a long time, and Clearwire has been selling the service quietly since last month, but the launch won't be official until July 21 when the full sales effort kicks off. [Read more →]

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Tinet Wins at SURFnet, Eyes Growth

July 7th, 2009
 

Tinet announced today that they have been selected by SURFnet, the European research network based in the Netherlands.  The contract, which will span 5 years and cover IP transit from IPv4 to IPv6 and multicast services.  Tinet has had some traction in the educational network arena, already serving BELNET in Belgium and HEAnet in Ireland.  Tinet is of course the new incarnation of the Tiscali international network, now in the hands of private equity[Read more →]

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Justice Department to Review Verizon, AT&T

July 6th, 2009
 

The Wall Street Journal is reporting that the US Department of Justice is now looking at industry giants Verizon (NYSE:VZ, news, filings) and AT&T (NYSE:T, news, filings).  They have opened an informal inquiry into whether the two have abused their market dominance following the M&A that sailed through the previous administration's more favorable regulatory atmosphere.  They seem to be focused on: [Read more →]

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Fiber M&A, Who’s Next?

July 6th, 2009
 

I asked this question last year, and the overwhelming response from readers was that XO Holdings (news, filings) would be the next target for M&A.  But it turned out, none of the companies on my list were consolidated.  I think that is largely because the bottom dropped out of the financial markets, else XO seemed right to me too.  A year later, let's try it again:

[poll id="27"]

This time you can choose more than one, which of course means that the [Read more →]

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In Other News

July 5th, 2009
 

As readers of this blog surely know, I don't cover everything that happens in the sector.  I write about what seems interesting to me each day, but lots of things slip past.  Often it's the format of the blog, I may seem like I have lots to say about everything but often it's just not enough to fill a post.  So given the holiday weekend, I thought I'd catch up on a few such items: [Read more →]

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Who’s Buying T-Mobile UK Today?

July 3rd, 2009
 

What if you had an auction and everybody showed up?  It used to be that way, but for the last year it has been quite the opposite.  Here in the US, Qwest's possible longhaul sale was met with the sound of crickets chirping - at least at the price they wanted. Tiscali practically had to beg to find a buyer for its UK unit, and it only managed to sell its international backbone (now TINet) for pocket change. But T-Mobile UK?  First it was Vodafone Group (NYSE:VOD, news, filings) planning a bid.  Then we've got Orange (France Telecom (NYSE:FTE, news, filings)) sniffing around. Soon thereafter, O2 of Telefonica (NYSE:TEF, news, filings)  wants a piece of the action. [Read more →]

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