Telecom Ramblings

Hybrid wireless/fiber backhaul provider ftwr has finally put forth a restructuring plan, but it wasn't perhaps quite the one shareholders were hoping for.  The recession and frozen credit markets left the company high and dry, with insufficient scale to support its debt load and not enough cash to build the rest of the way there.  So they froze capex in a clearly untenable situation, began buying back debt at 30 cents on the dollar, and negotiating with large debt holders.  The general outlines of their solution will not be surprising to survivors of the last bubble - massive dilution to avoid a worse fate.  The company's stock price had more than doubled since August in anticipation of a more favorable outcome, hence [Read more →]

In a filing this morning with the SEC, it emerged that Carl Icahn raised its bid for XO Holdings (news, filings) on Friday.  However, the offer expires today at 6pm Eastern. Yes, that's right - he gave them a whole weekend to think about it, and the company itself hasn't even issued a PR or made a filing on the subject.  Here is the text: [Read more →]

Ever since it purchased the northern New England wireline assets of Verizon, FairPoint Communications (news, filings) has had a cloud of doom hanging over it.  The combination of service issues and financial weakness just never looked good, and the company's travails have been painful to watch.  Even lately as some of the service issues have improved, it has been clear that shareholders were probably toast.  And so it shall be, today Fairpoint formally filed for Chapter 11 in [Read more →]

Telecommunications giant Verizon (NYSE:VZ, news, filings) reported earnings this morning, and like AT&T last week there weren't many surprises.  Total revenues of $27.3B were slightly above expectations, as were adjusted earnings per share of $0.60.  There was no iPhone of course, but the net increase of 1.2M wireless subscribers was a bit higher than expected.  Verizon is gearing up to challenge the iPhone with phones based on Google's Android in the fourth quarter, but even with a big launch it will be a while before that could be relevant.  I doubt very much if Verizon's Droid series will do the iPhone [Read more →]

Or more likely it was just an obvious target.  In late June, when Julius Genachowski was finally confirmed as the new FCC chairman, I posted a simple challenge for him - somewhat tongue in cheek.    Basically, it revolved around the agency's website, which at the time ranked amongst the world's worst.  If you started from www.fcc.gov without knowing the layout or cryptic ID numbers, finding any particular document was nigh impossible.  But whether it was me he listened to (highly doubtful) or not, I have to say that they are making some strides.  On Friday the electronic comment filing systems were upgraded.  [Read more →]

In my poll of a few days ago regarding what map links I ought to collect next, readers wanted three things:  metro fiber maps, Latin American maps, and more European maps.  For metro maps, I am going to have to think about the best way to do it, as there are too many to organize simply so I would have to group them intelligently.  My thought right now is that I make a page for each major metro area or for groups of adjacent or nearby metro areas.  For example:  [Read more →]

I can't bring myself to add more repetition on network neutrality today - suffice to say the FCC did what it said it would do and everyone else said what they said they would say.  So instead let's take a look elsewhere in the world for interesting news.

Pacnet has announced plans to accelerate its upgrade of EAC/C2C, planning to add another 3.6TGbps to current inventories with completion in 2011.  This comes on top of [Read more →]

Like all telecommunications equipment providers, router specialist Juniper Networks (NASDAQ:JNPR, news, filings) has had a rough year.  While the weather stopped getting worse during Q2, there has been apprehension that it might not get better quickly enough.  Hopefully today's third quarter results will not be an isolated case of unexpectedly swift recovery.  Third quarter revenues were $824M, up almost full 5% from $786M last quarter.  Earnings per share of $0.23 was also up from $0.19 sequentially.  Both numbers were beyond [Read more →]

Telecommunications goliath AT&T (NYSE:T, news, filings) gave us our weekly peek into its finances with its Q3 earnings report this morning.  The verdict:  unsurprising unless you were silly enough to think that the iPhone wasn't selling well.  Revenues of $30.86B were precisely on target, at least according to the analysts compiled by Yahoo finance, and earnings per share of $0.54 were even a bit higher than expected.  The highlights of course were the 3.2M iPhones activated during the quarter and the net gain of 2M wireless subscribers, now totalling 81.6M subscribers.  Those additions were huge [Read more →]

In a PR today, Level 3 Communications (NYSE:LVLT, news, filings) announced a new service for wireless tower access.  Now, that doesn't mean what I first thought it did, which was that the company was preparing to enter the fiber-to-the-tower market in force.  They still might do that I guess but this offering seems to be more about bringing the tower to the fiber.  That is of course much less capex intensive for Level 3, and allows it to squeeze a bit more revenue out of existing facilities.   [Read more →]

Not only did they announce a blockbuster acquisition, Equinix (NASDAQ:EQIX, news, filings) reported outstanding Q3 earnings after the bell.  Revenue guidance was raised last quarter and had already seemed high, but they beat it nonetheless.  Earnings per share continued to outperform the expectations of the street.  No wonder their stock has been pushing $100 again, although naturally news of the M&A is driving it down a bit initially.  Here is a quick table summarizing their third quarter: [Read more →]

In a surprising M&A move, Equinix (NASDAQ:EQIX, news, filings) is planning to buy its smaller rival sdxc for $689M, or $19.06 per share.  That is a solid 32% premium above today's market close of $14.40.  The acquisition will add 34 datacenters in 22 North American markets totaling more than 1 million square feet to Equinix's already huge footprint.  16 of those markets will be new, as Equinix's own footprint is focused heavily on the largest markets.  This acquisition will give them a more balanced footprint across the continent with a presence in smaller (but not small) markets, as well as eliminate one of the few competitors they face with such wide geographical [Read more →]

Having now finished its optical mesh deployments to India, Singapore, and France, Verizon (NYSE:VZ, news, filings) is now aiming at the Middle East.  Verizon Business's optical mesh efforts takes advantage of the company's tremendous inventory of undersea routes across the Atlantic and Pacific to automatically reroute traffic around trouble spots.  If you encircle the globe, you add even greater potential resiliency.  If every cable [Read more →]

Of course, no sooner did I post about the financial market contracts won by sdxc and RCN Business (NASDAQ:RCNI, news, filings) than Hibernia Atlantic issues a PR of its own.  The company announced that it has been selected by IPC Systems, which in turn provides a variety of communications solutions to financial companies.   IPC will use the company's Global Financial Network offerings as the foundation for its next generation offerings linking market participants directly to [Read more →]

Telecom equipment upstart Infinera (NASDAQ:INFN, news, filings) announced earnings after the bell, and things look pretty good.  Revenues of $83.4M were up sequentially from both $68.9M in the prior quarter and $80.9M on an adjusted GAAP basis in the third quarter of last year.  That's a bit higher than I expected, and hopefully is a good sign for the telecom equipment sector.  But does it mean that carrier spending is back to normal?  One [Read more →]

The latency war in financial networking continues, today with a couple of victories for the smaller companies involved.  RCN Metro, the metro fiber division of RCN Business (NASDAQ:RCNI, news, filings),  has won a contract with Lombardi & Co. to provide dedicated Internet service both on the exchange floor and in its headquarters.  Lombardi helps institutional investors with access and trading technologies and chose RCN for its "optimal TCO, minimal latency, as well as high throughput and availability".  Yep, there's that latency bit again, and apparently that recent upgrade to [Read more →]

A bit of a scuffle broke out over a new report from Arbor Networks concerning the state of the internet.  Wired ran an article pegging Google's bandwidth costs at zero, which was a rather poor choice of words at best.  Dan Rayburn does a good job ripping apart the article itself and Data Center Knowledge added its own two cents, suffice to say that the Wired article wasn't very well thought out.  But they are hardly alone in their superficial look at bandwidth costs.  The central fallacies here are ones that the press often gets tangled up in, i.e. that transit is always expensive while peering is always free, and that using dark fiber magically [Read more →]

Sprint Nextel (NYSE:S, news, filings) is finally buying its wireless affiliate ipcs in a deal worth a total of $831M.  That's $24/share plus the assumption of $405M in net debt.  A substantial 30+% premium above the current stock price, but at an EBITDA multiple of about 6 which is not that exorbitant.  Sprint hopes to save $30M annually in synergies on the $550M or so in acquired (but probably overlapping) revenues.  [Read more →]

According to a nice piece from TelephonyOnline, the new metro gear that Infinera (NASDAQ:INFN, news, filings) is introducing today does not use the company's flagship technology, the photonic integrated circuit or PIC.  The new metro gear is a three rack unit called an ATN, and it carries eight 10Gbps ports.  Rather than saving money when scaling to huge bandwidths, the ATN apparently serves Infinera customers by interfacing more directly with its DWDM gear, saving some transponders and hopefully [Read more →]

Earnings season for telecom and internet infrastructure rolls in this week.  Well, it started last week with a few earlybirds like Nokia but things really get going in the next few days.  What to expect?  The market has been happy lately, hopefully it is foreshadowing numbers that show us emerging from the recession.  However, Octobers with positive expectations scare me so I'm not holding my breath.  At least not for Q3 numbers, which will surely still be weak even if we are seeing some pickup in sales given the usual lag time before they show up in revenues.  As usual, it will be Q4 comments that everyone will be parsing for any signs that this winter won't be so cold.  Now for a few [Read more →]

Dan Rayburn reports that CDN challenger EdgeCast was profitable in Q2.  That's quite impressive actually, considering the relatively low $10M of capital invested and revenues in the neighborhood of $15-20M.  To reach scale so quickly when few others have done half as well with twice as much suggests that these guys aren't going away.  It also throws into a favorable light the choices by [Read more →]

This is turning into quite an interesting battle.  The special committee of the board of directors of international wholesale VoIP provider IBasis (news) [a subsidiary of KPN (NYSE:KPN, news)] has again rejected the advances of Dutch incumbent and majority shareholder KPN (NYSE:KPN, news).  The new price of $2.25 per share may have been some 40% higher than the initial bid, but the special committee still found it 'grossly inadequate'.  They cite many reasons, but it all boils down to the fact that they feel KPN is trying to [Read more →]

According to reports, Finland has made it a legal right for all citizens to be able to have a broadband connection - in this case a minimum of 1Mbps.  Not instantly, but by next summer - which is close enough to turn a few heads.  They had already planned to make a 100Mbps legal guarantee by 2015, but decided for an intermediate step.  Finland has just 5.3M people, and 1.52M households already have broadband connections.  Even if one assumes an average of 3 people per households that still leaves some work to do.  But the law just says you must be able to get one, not that you must [Read more →]