Telecom Ramblings

This article was authored by Tony Poulos, and was originally posted on telecomasia.net.

I continue to be perturbed by headlines from the telecoms industry declaring staff cuts to reduce costs and improve profitability. Is there no other means to placate investors than to resort to such radical and life-disrupting means for people that have not necessarily failed in their jobs? [Read more →]

Cogent Communications (NASDAQ:CCOI, news, filings) has been eerily quiet this year on the press release front, with nothing other than earnings releases, event announcements, and debt sales going over the wires.  But their Q2 results filed this morning show more of the same, by which I mean steady, solid growth across the board.  Here’s a quick summary of a few relevant metrics in the context of the prior four quarters: [Read more →]

News has been thick this week, time to catch up on a few items that are worth a quick look.

MegaPath has been running a Tech Talk video contest this summer, in which IT professionals are invited to submit videos turning high tech jargon into humor.  They are taking submissions through August 12, but they have a nice crop of videos already available to peruse.  My favorite, hands down is [Read more →]

clwr today reported its usual subscriber positive and earnings negative quarterly results, and finally made a commitment toward building out LTE.  That is, when they get the financing for it of course.  The WiMAX provider demonstrated both solid revenue growth and cost savings, though how much is enough remains open to question. [Read more →]

Perseus Telecom, which specializes in ultra-low latency connectivity, has unveiled a new such route to Brazil.  Leveraging GlobeNet’s submarine cable systems, they are claiming the low latency title between Sao Paolo’s BM&F BOVESPA and New York’s NASDAQ OMX.  The sustained interest in low latency connections for the trading community is definitely spilling over from the Chicago-NYC-London-Frankfurt access and onto other continents, and the Brazilian bandwidth market is red hot these days.   [Read more →]

While its acquisition of Savvis recently has dominated its news for the past few months, it was those pesky details of the merger with Qwest that slowed down CenturyLink (NYSE:CTL, news, filings) in the second quarter.  Revenues of $4.41B were just slightly below expectations, while earnings per share took a $0.20 non-cash hit amidships as Centurylink’s fair value assessment of the Qwest assets led to an additional $200M in depreciation and amortization.  Without that contribution, earnings per share of $0.64 were within guidance but still [Read more →]

What to do to distract everyone from the pain of a giant restructuring?  Find a new way to publicly demonstrate your coolest technology of course!  Cisco Systems (NASDAQ:CSCO, news, filings) today said that its telepresence technology will be featured at the 2011 Rogers Cup.  The womens and mens tournaments will be held simultaneously in Toronto and Montreal, respectively, and Cisco’s telepresence will be there to [Read more →]

As expected, Earthlink (NASDAQ:ELNK, news, filings) is not done with its inorganic push to build itself into a comprehensive business services provider.  This time, however, they didn’t buy a CLEC, but rather a managed services provider with a data center.  Earthlink announced yesterday that it is buying Business Vitals, a Columbia, South Carolina firm specializing in managed IT, security, and professional services.   [Read more →]

European independent metro operator euNetworks (news) reported its second quarter earnings today.  The story lately has been inorganic growth, with the acquisition of Lambdanet in May and Teragate AG a week ago.  However, while these numbers include one month of Lambanet, euNetworks also saw organic growth in the period.  Here is a quick tabular review of the company’s results in the context of the prior four quarters: [Read more →]

Ok, a bit of the dust has settled on yesterday’s purchase announcement of PAETEC by Windstream, so let’s check the temperature out there:
[Read more →]

Zayo Group (news, filings) is expanding its presence in West Virginia, according to a press release this morning.    The supra-regional fiber operator is building out metro network in and around Fairmont, a city to the south of Morgantown.  The new network aims at bringing online the I-79 High Tech Corridor and I-79 Technology Park, home to many federal agency facilities such as [Read more →]

According to a report out this morning over at Telegeography, transpacific wavelength pricing pressure has been very substantial over the past twelve and twenty four months.  Between Q2 2009 and Q2 2011 the median monthly lease price for a 10G wave between LA and Tokyo has fallen from $98,500 to $36,000.  Pricing on other routes routes has fallen similarly, with twelve month declines of 33% and 39% for [Read more →]

The Windstream/PAETEC deal sort of pushed other news aside this morning, however other things did happen today that are definitely worthy of note: [Read more →]

This morning’s M&A announcement certainly caught me off guard – although perhaps it shouldn’t have -and I’m still trying to get my brain around it.  Windstream’s activity lately in targeting the business marketplace outside its ILEC territory has been very aggressive.  But until now geographically they were still very much a regional company even as a CLEC, just as the NuVox and KDL/Norlight footprints were.  Buying PAETEC takes what was already a rather radical hybrid [Read more →]

In a deal that came as a complete shock to me, Windstream (NYSE:WIN, news, filings) has agreed to purchase PAETEC (news, filings) in a deal worth $2.3B.  Windstream will assume or refinance PAETEC’s net debt of $1.4B and PAETEC shareholders will receive 0.460 shares of Windstream common stock for each PAETEC share they own.  That appears to peg the deal at about $5.61 per share based on Friday’s close, and if one guesses PAETEC’s current run-rate EBITDA at about $380M, the EV/EBITDA multiple of the deal would be in the neighborhood of [Read more →]

A short time ago, Dan Rayburn posted an article indicating that something big is about to happen over at Limelight Networks (NASDAQ:LLNW, news, filings) with the likeliest outcome being an acquisition by the likes of Verizon or perhaps MicroSoft.  Certainly such rumors have come and go regularly over the past few years, but Dan has rarely been wrong when he makes these calls.  So, let’s do a few quick takes on those potential acquirers and a few others: [Read more →]

European independent metro fiber operator euNetworks (news) isn’t messing around with its efforts to attack the German market.  Today they announced their second acquisition in three months with the purchase of TeraGate AG Storage Optical Network.  TeraGate offers nextgen corporate WAN solutions, including Ethernet products and cloud-based storage networks.  They operate both nationally and internationally, but their primary focus lies in Germany across seven [Read more →]

Zayo Group (news, filings) said yesterday that it has begun construction of a metro fiber ring in the central business district of Los Angeles that will provide data center connectivity for CoreSite (NYSE:COR, news, filings).  CoreSite has two existing data centers in Southern California totaling 600,000 square feet, with a third on the way that will add another 25,000 square feet of an eventual 145,000 when it opens later this quarter.   [Read more →]

NTT America (news) [a subsidiary of NTT Communications (NYSE:NTT, news, filings)] is taking a turn for the green at its Lundy data center in San Jose.  The international network and cloud provider is bringing in five Bloom Energy Servers as part of its overall energy conservation efforts.  The entire data center industry has been trying out all sorts of alternative energy ideas, and Bloom’s fuel cell technology is an interesting choice. [Read more →]

In their earnings report this morning, Earthlink (NASDAQ:ELNK, news, filings) said that with a full quarter of One Communications adding to their earlier purchase of Deltacom and of course their New Edge division, business services now add up to 74% of the company’s total revenue, which means we’re really going to have to start thinking of the company as a network operator and CLEC rather than an ISP.    I still don’t think their done assembling fiber and CLEC assets.  However [Read more →]

Finally ending one of the least-secret partnership negotiations of recent memory, Sprint Nextel (NYSE:S, news, filings) and upstart wholesale wireless network operator today announced a multi-billion dollar, fifteen year deal.  Sprint has been trying to put together a 4G strategy for years now, and perhaps adding this piece will finally let them finish the puzzle.  But LightSquared is still embroiled in regulatory issues surrounding its use of former satellite spectrum due to interference claims by the GPS industry, which will surely need to be resolved first. [Read more →]

The news is thick this week, let’s do a quick rundown of some items in the datacenter space both domestically and internationally: [Read more →]

The flagship of the carrier neutral colocation industry, Equinix (NASDAQ:EQIX, news, filings), posted its usual solid quarter today.  Revenues of $394.9 included $11.7M from the ALOG acquisition down in Brazil, but even excluding that still exceeded both guidance and analyst estimates.  Diluted earnings per share of $0.64 easily bested guidance of $0.48.  Here is a quick tabular summary of Equinix’s Q2 in the context of the past few quarters: [Read more →]