Telecom Ramblings

Upstart telecom equipment provider Infinera (INFN) reports earnings Tuesday after the market closes, so let's size up the situation a bit beforehand.  Back in June, Infinera pre-announced a Q2 shortfall and reduced its Q3 and FY08 guidance.  The company attributed the lowered expectations to reduced demand from carriers who were slowing buildouts, an event that now might belatedly be considered [Read more →]

Swedish network provider Ericsson reported earnings this morning, they had been expected to release earnings on Friday but apparently decided the good news just couldn't wait and checked in with revenues of SEK 49.2B.  Their earnings of SEK 2.8B included a large SEK 2B restructuring charge, but substantially [Read more →]

On Friday I speculated that Carl Icahn might be planning a 'short form merger' for network operator XO Communications (XOHO), as he increases his holdings to near 90%.  However, it turns out that this threshold is not as interesting as it might have otherwise been.  Back in late July, when Icahn refinanced XO's senior debt with all that convertible preferred and perpetual preferred stock, buried in the agreement was [Read more →]

Back in the bubble, longhaul fiber was a darling of the street.  These days, the value of metro fiber gets most of the press.  But regional fiber is a middle child that gets overlooked.  If a market isn't conveniently on the route between two NFL cities, the number of on-ramps drops amazingly quickly, the alternatives to the ILEC are generally few and come from brand names that don't get heard much.  In technological terms, this fiber is akin to longhaul fiber because it covers distances greater than a metro loop would and uses basically the same gear.  But in terms of functionality, it often acts more like [Read more →]

First we had Google (GOOG) filing a patent on datacenter barges floating 3-7 miles off shore, and now we have Morgan Stanley planning a tidal power based datacenter in the far north of Scotland.  The idea of course has a familiar ring nowadays:  instead of bringing the power to the datacenter, why not bring the datacenter to the power?  And you have to hand it to the [Read more →]

In a filing yesterday with the SEC, Carl Icahn increased his ownership of network operator XO in a private transaction, adding 3,995,000 common shares and 500,000 series A preferred shares to his holdings.  Billionaire buys a few more shares during a panic, that's not much of a headline perhaps - except that Icahn appears to be approaching the 90% threshold.  If he reaches it, it may enable him "to execute a short form merger to eliminate [Read more →]

Tata Communications announced today the first commercial rollout of Cisco's telepresence application.  They now have pay-per-use public rooms in hotels in the US and UK as well as in Mumbai, Bangalore, and Chennai over in India, and are planning to make 100 such rooms available globally by the end of 2009.  So any of us who have need of this bandwidth burning, lifelike videoconferencing app, and either the money to pay for it or an [Read more →]

Today Level 3 Communications (LVLT) filed an 8-K with the SEC detailing a series of swaps of equity for various issues of its convertible debt.  With $362M due in September of 2009 and $903M due in 2010, the worry has been that if this credit crisis continues too long they will have trouble refinancing.  The overriding question is, by doing these deals, have they improved their situation? [Read more →]

At its annual meeting this week, Internet2 and several partners will demo hi-def videoconferencing over Dynamic Circuit Networks, or DCN.  The 1080i video stream will be uncompressed and will clock in at around 1.2Gbps.   They will be connecting students in the Large Hadron Collider (LHC) in France with [Read more →]

Optimum Lightpath, the metro fiber arm of Cablevision, announced today that it has passed the 3000 lit building threshold, on 3200 route miles of metro fiber in the New York City metropolitan area.  That is far and away the most for any CLEC in any market in the USA.  This statistic is helped of course by the fact [Read more →]

When earnings season begins in earnest next week, we're going to hear CEOs and CFOs through the internet and telecom sectors expressing the same basic attitude in a myriad different ways.  That attitude is one of severe caution.  After all, we have watched a forest fire burn through [Read more →]

The Northern Tier Network Consortium has selected Infinera's PIC to light its fiber.  Who is the NTNC you ask?  Well so did I, but apparently it is a newly forming research network.  The idea it seems is to fill in the gap between Internet2, which takes the central route from Chicago to Seattle, and the non-profit CANARIE CAnet-4 network which runs east-west in Canada.  Here is their planned network map: [Read more →]

In times like these, it's easy to develop tunnel vision as we watch telecom stocks spiral downward.  So let's step back and see where valuations are now for  USA based, non-ILEC, longhaul and metro fiber providers.  I have compiled a quick list and calculated estimates of their current valuation based on Q2 cash and debt levels plus any known major changes since then (e.g. for XOHO).  Where available, I used [Read more →]

Well, if you read this blog much, you know my opinion.  What I'd like to know is yours.  Do you think the internet infrastructure sector is more resilient than Wall Street is giving them credit for?  Is there anything likely to be said during Q3 earnings calls over the next few weeks that will be as terrifying as last week's market plunge implies?  Are sales about to drop off a cliff?  Or are we just

[Read more →]

In an XCHANGE Magazine article on Thursday, Level 3's Lisa Guillaume mentioned an intriguing new aspect of its CDN business.  Here is the quote: [Read more →]

In a NY Times Bits blog post, Saul Hansell makes the case that Netflix may be in a great position as online video develops.   His point boils down to the fact that Netflix has an existing business that acts as an on-ramp to the new services.  Their DVD rental service transitions naturally to a stream-to-the-set-top-box model.  But in a blog post today on The Business of Online Video, Dan Rayburn shot some holes in this theory [Read more →]

On TechTicker yesterday, Paul Kedrosky painted an ugly picture of how the credit crisis hurts telecom infrastructure.  It goes like this:  big telecom infrastructure rollouts like 3G in China are very often financed with debt, not from cashflow.  With no access to the debt markets, the buildouts will stall and this will hurt the equipment makers.  This is a surprise? [Read more →]

In the face of a deteriorating economy, PAETEC (PAET) has scaled back plans for its new headquarters building in Rochester, NY.  Just four months ago the large CLEC's plans were for a 37 story monster of a building with luxury apartments above office space, and just two months ago they still said all systems were go.  Now they have now settled on [Read more →]

Not everyone is paralyzed by the financial crisis.  Far from Wall Street, the economy does go on.  Fiber does get installed and lit, and services get sold.  No less than three expansions of metro and regional fiber were announced in the last few days, one by Fiberlight, another by AFS, and yet another by US Carrier. [Read more →]

In July, back when the credit markets were merely horrible, Vonage announced a financing package to allow it to refinance its debt that comes due in December, and even then it was a brutal refinancing.  Well, today Vonage announced the package has been renegotiated.  Why?  Well, I'm guessing it is because the original package 'contemplated' raising $30M from other parties to make it to $220M total, and that obviously didn't happen.  Given the state of the markets, you know the new package isn't going to be much of an improvement. [Read more →]

Back in July I posted that big money might return to telecom in the form of enabling acquisitions.  Apparently I was much to early, the opportunities then seemed clear to me but they look petty and small compared to those in the current environment.  As the financial crisis deepens, it seems inevitable to me that the vultures [Read more →]

Finally, Verizon (VZ) lost a VoIP patent case yesterday.  Cox, accused of infringing on 6 patents, took the ILEC all the way through a jury trial and won on all counts.  Well, it is Cox and not Vonage (VG) this time or someone even smaller, so this isn't quite a giant killing story, yet it is satisfying anyway.  [Read more →]

I have to say, the last month has been truly surreal.  The financial disaster and the hurricane surrounding it has sent the stock of most fiber and data oriented companies into a huge tailspin.  The situation is fundamentally different than it was 7-8 years ago when the tech bubble burst, and yet when the street panics it doesn't care. [Read more →]