Telecom Ramblings

I have been travelling for the past 36 hours, and since that included all of a Tuesday I have some catching up to do now.  Here’s some rapidfire responses to recent news items:

Juniper Networks (NASDAQ:JNPR, news, filings) won a new customer for its Meda Flow Solution.  CDN challenger BitGravity will use it to overlay on its distributed origin architecture.  They hope to gain improved scalability, allowing them to grow quickly while adding fewer servers and thereby [Read more →]

Level 3 Communications (NYSE:LVLT, news, filings) continued its sustained PR blitz with two more contract wins so far this week.  

Yesterday it was a three year deal with transportation solutions provider CAP Logistics.  Level 3 will provide a package SIP trunking, IPVN, colo, and dedicated internet access, which will be deployed in Denver, Salt Lake City, Houston, and Illinois.  An interesting mid-market win, and they need [Read more →]

A few weeks ago, Dave Rusin over at Telecom Straight Shooter posted this article previewing some nice new work by Andrew Odlyzko from up at the University of Minnesota.  Dr. Odlyzko is of course very well known in the bandwidth world for his independent research on traffic growth rates amongst other things.  Dave included a letter from him seeking data from the movers and shakers in the industry, focusing on the telecom bubble of a decade ago.  To quote Dr. Odlyzko’s email: [Read more →]

Following up on updates to my revenue/capex and EBITDA margin/cashflow posts, we take a look at the overall relative valuations across the sector since the first quarter of 2008.  The metric here is the ratio between Enterprise Value and adjusted EBITDA, which is a common way of looking at valuations in this sector.  Missing from the comparison are Sprint Wireline and RCN Metro, simply because we can’t calculate an EV for them as they are not separately traded.  With no further ado, here is the updated chart: [Read more →]

In the previous post, we looked at relative revenue growth and capex trends, updating my competitive telecom trend charts for the second quarter.  But while revenue growth is important, profit is obviously moreso.  Comparing profit directly doesn’t tell us much because it has too many pieces, not the least of which are very different levels of debt and amortization.  In telecom, the common metric to measure the performance of the operations independent of the balance sheet is EBITDA – which has its own warts but gives us a commonality with which we can do comparisons after normalizing by revenue to get EBITDA margins.  As always, EBITDA margin varies greatly depending on business model, with fiber-heavy companies having high EBITDA margin and high capex, and fiber-light companies the opposite.  Here is the latest graph showing EBITDA margin trends across the sector since the beginning of 2008: [Read more →]

I have updated my competitive telecom trends page with the published numbers from the second quarter of 2010. This page is automatically generated from a spreadsheet I store in Google Docs and update periodically.  However, it was pointed out to me that Google’s charts lack the different symbols one can generate from Excel and therefore aren’t suitable for the color-challenged amongst us – plus they just don’t look as good.  Yet they are very convenient for sharing data and automatically posting changes.  As a compromise I decided to improve the presentation at least for my regular quarterly blog post on the subject with better charts drawn from the same data.  In this post, let’s look at two graphs:  relative revenue growth and capex as a percentage of revenue since the beginning of 2008: [Read more →]

Thanks to reader Frank Coluccio who pointed me toward a recording of the Fiber Infrastructure Panel at Oppenheimer’s Technology, Media & Telecommunications conference that can be found on the website of abvt.  The panel’s experts included Abovenet’s Bill LaPerch, Zayo’s Dan Caruso, Allied Fiber’s Hunter Newby, USMetroTel’s Frank Mambuca, and CityTel’s NiQ Lai.  That group contains some of the greatest prophets of fiber and the dumb pipe out there right now, spanning a very wide [Read more →]

In Europe this morning, Colt Group (LON:COLT, news) launched an attack on the low latency bandwith marketplace.  The trans-european fiber operator is now offering 4.22ms between London and Frankfurt as well as 2.65ms between Paris and Brussels.  The former has been a battleground for a while of course, but the latter is a new one for me.  Is the Paris-Brussels route catching the low latency financial trading bug too?  The more the merrier I guess!   It’s refreshing to get actual numbers for the latency on these routes, although it is just a snapshot since they are continually driving further [Read more →]

According to various reports originating with option trading activity, there are rumors circulating that Akamai (NASDAQ:AKAM, news, filings) could be a takeover target.  The likely buyer?  Obviously a telco or a cable company according to Silicon Alley Insider.    I know I’m something of an M&A groupie at times, but there are merger possibilities out there that just make no sense, and this is one of them.  No, it’s not that a telco or cable wouldn’t find Akamai of value, nor is it that they couldn’t find some cost savings, nor that the combined company couldn’t kick some major ass.  It’s just that pesky net neutrality thing, and the sloppiness of the conversation around it. [Read more →]

According to ArsTechnica, the Belgian ISP Telenet recently published a list of its top 25 downloaders.  At the top of the list was a customer who sometime this summer managed to burn some 2.68 Terabytes of data in a single month.  That’s an impressive number, almost a thousand times the average broadband customer and worthy of almost anyone’s definition of a ‘bandwidth hog’.  No word on precisely what data was being downloaded, but it can’t very well have been anything other than a whole lot of video.  But as Rudolf van der Berg points out over on his Internet Thought blog, it actually isn’t [Read more →]

Over on the Telecom Ramblings Jobs Board, we have a new job posting.  Zayo is looking for an Application Developer in Louisville, Colorado.  The position involves working extensively with Salesforce.com’s Force.com platform, adding new features and functionality to Zayo’s backoffice systems.  

I have been running this jobs board for a while now, [Read more →]

Here’s a quick summary of several news items that crossed the wires over the past day or two:

Metro Fiber operator FiberLight won a contract with the Atlanta Journal-Constitution, a member of the Cox Media Group.  The newspaper is leveraging multiple GigE connections to hook up its facilities across the Atlanta metro area in a highly redundant, secure private network.  Earlier this summer, [Read more →]

Fresh off its acquisition of all those rural lines from Verizon, Frontier Communications (NYSE:FTR, news, filings) has raised issues with the proposed purchase of FiberNet from One Communications by nTelos (NASDAQ:NTLS, news, filings).  Apparently, these guys actually enjoyed all that sharp elbow work they had to endure from the West Virginia PSC and politicians in general back in the Spring, because they’re back for more.  Well, maybe not more of the same as they are on the other side of the fence this time. [Read more →]

Here is a quick summary of several fiber contracts and expansions that have crossed the wires in the last few days:

Western regional fiber operator 360Networks finished a fiber build for Advanced Data Centers.  The build consisted of diverse laterals into the company’s McClellan Park facility, which sits on an former Air Force Base.  According to ADC, they can now offer low latency 2.3ms connectivity over to major datacenters in the SF Bay area while not having the same earthquake risks. [Read more →]

Windstream (NYSE:WIN, news, filings) is buying itself a bunch of fiber!  Today the rural ILEC announced that it has agreed to purchase Kentucky Data Link (KDL) as well as Norlight from Q-Comm.  The transaction is valued at approximately $782M, the components of which will be 20.6M shares of stock, $278M in cash, and the repayment of $267M in net debt.  From what I hear, this was not Windstream’s first offer, but rather its third.  Additionally, there were active private equity bidders in the mix, but [Read more →]

glbc offered up an interesting press release this morning.  TTX Company will be using their EtherSphere, IP VPN, and Dedicated Internet Access services to support operations across seven locations as well as backup services for their data center, displacing its previous provider.  TTX provides railcars and freight car management services in North America, which is not the kind of company one thinks of as needing bandwidth and high tech communications systems.  But I guess keeping track of 200,000 flatcars, boxcars, and gondolas in the modern age takes a modern IT infrastructure these days.  [Read more →]

Level 3 Communications (NYSE:LVLT, news, filings) chalked up two more wins over the past several days in the content delivery segment.  The company continues to prove out its return to revenue growth, which is at least giving their PR team a sustained workout.  Hopefully it will show up in their Q3 numbers when the time comes.

Today it was yet another victory in the gaming space with [Read more →]

Following three straight quarters of declines, XO Holdings (news, filings) turned around and posted some nice numbers in this afternoon’s release, which as always came on the last possible day.  The prior few quarters had featured slower growth in broadband revenues that didn’t successfully balance churn in legacy services.  Both sources showed measurable improvement, however questions over the company’s cash levels and plans to raise money remain in place.  Here is a quick table summarizing XO’s performance for Q2/2010: [Read more →]

According to the New York Times, the video site Hulu is preparing to go public.  Born as the major TV networks’ answer to YouTube, Hulu has managed not to crash and burn, which is what I thought was most likely at the time.  Reportedly the company generated $100M in revenue last year, and should be in the $200M range next year.  No word on the actual profitability of those revenues, but if they are indeed going public then soon that information will have to be filed with the FCC.   [Read more →]

Internet2 has received a donation aimed at a 100Gbps Ethernet networking project from Juniper Networks (NASDAQ:JNPR, news, filings).   The internet equipment maker has injected $2.5M that will go toward the building of the United States Unified Community Anchor Network, or US UCAN.  I like my acronyms without an apparent political slogan, but oh well.  Internet2 also won some stimulus funding for the project last month, with partners National LambdaRail, Northern Tier Network Consortium and Indiana University – $62M worth, which will be supplemented by [Read more →]

In today’s Q2 earnings report from euNetworks (news), one can see early signs of success in its drive to unlock the value in its metro assets.  The European marketplace is less mature for such assets than it is here in the USA, but that may be starting to change. Revenues rose to €9.4M, up some 18% from the first quarter alone.    There’s probably some lumpiness in that surge obviously, but they do certainly seem to be on the move.  Demand was particularly strong from the financial vertical of course, since despite its small size euNetworks is one of the major players in the low latency game between [Read more →]

This week’s big event was of course the Google/Verizon network neutrality proposal, which took heavy fire from the network neutrality camp – some seeing Google’s action as a betrayal.  Was it?  Well that depends on what one wants from the whole argument: victory, policy, or the argument itself.  Yes, there are those who would prefer (consciously or unconsciously) to leave network neutrality as a battlefield indefinitely, as it provides a useful us-versus-them division with easy access to the press.  In a very real sense, Google did turn its back on that group by attempting any sort of compromise at all.   [Read more →]

Integra Telecom is adding 121 route miles to its fiber network in Denver, looking to take advantage of growth opportunities.  The $2.1M metro expansion will allow the company to offer enterprise customers a more robust set of network offerings.  Since restructuring its debt last year, Integra has been gradually returning to a growth footing.  It has also been increasing its emphasis on its on-net footprint lately, most of which it picked up in the [Read more →]