Telecom Ramblings

On Wednesday before the Thanksgiving break, Windstream (NYSE:WIN, news, filings) dropped another M&A bombshell on the telecom market, taking out Iowa Telecom for $1.1B including some $600M in net debt.  This follows the acquisition of D&E in May and its recently announced acquisitions of Lexcom in North Carolina and of CLEC NuVox just a few weeks ago.  Quite a roll-up being managed out of Little Rock this year, eh? [Read more →]

You know, given the prevailing gloom and doom scenarios offered by so many financial and tech analysts for Clearwire’s future, I would have expected the company to have to work their asses off to raise just $1B at a time like this.  But the same street which has so many doubts is practically throwing money at these guys.  Yesterday they just raised another $920M.  So how much does that [Read more →]

After looking at EBITDA Margin, Capex, and EBITDA-Capex across the sector, I’ll finish up this series with a look at Revenue.  Everyone wants to grow of course, but in this recession there has been a divergence in the sector’s growth profile.  Seen alongside the EBITDA and Capex trends, we get a fuller picture of what is going on in the sector.  Here is the relative revenue growth chart over the past 7 quarters: [Read more →]

Over the weekend, Renesys posted one of its infrequent but highly insightful updates on the IP transit market, I recommend a read.  On the menu besides the usual pricing pressure spearheaded by (but not limited to) Cogent Communications (NASDAQ:CCOI, news, filings) was the quickly shifting market in eastern Europe, the rising tide of paid peering between eyeball networks and content providers, strength in Asia, and of course Google. [Read more →]

American Fiber Systems has recently hooked up no less than 8 major casinos in Las Vegas, according to a press release today.  The size of those casino hotels on the strip makes them pretty good traffic generators of course, you certainly can’t feed one with a few T1 pipes.  AFS is now staking its claim to the top spot amongst alternative fiber networks in the city, and I don’t have any reason to doubt the claim.  Vegas hasn’t been a hotbed of metro build-outs.  Amongst the more national metro footprints, Level 3 has only [Read more →]

After a dispute that lasted four months, IBasis (news) [a subsidiary of KPN (NYSE:KPN, news)] has come to terms with its majority shareholder KPN (NYSE:KPN, news).  KPN will pay $3 per share to buy the rest of the company, totalling $93.3M.  The special committee of IBasis’s board has unanimously approved the new bid, and thus it appears that the soap opera will come to an end. [Read more →]

According to various reports over the weekend, Ciena (NASDAQ:CIEN, news, filings) has won the auction for Nortel’s optical networking and carrier ethernet businesses.  The company apparently raised its earlier stalking horse offer all the way to $769M, made up of $530M in cash and $239M in convertible notes, just barely edging out the team of Nokia Siemens and One Equity Partners.  Nokia of course felt its offer was fair value, but of course value is in the eye of the beholder and Ciena simply has more [Read more →]

As promised, here is the next update to my collections of links to competitive metro fiber maps.  First we have the major internet hub of Chicago, which has many providers but is not overflowing with publicly available maps.  And second, we have the entire state of Florida – which has many large cities but often with the same companies showing up in many of them which makes it convenient to group them together. [Read more →]

From Rich Miller over at DataCenterKnowledge comes this weekend’s entertainment.  How to best visualize the risk of catastrophic damage to the servers and other equipment you are colocating in a datacenter?  Hollywood has taught us so many ways to depict utter devastation, but there’s nothing quite like the do-it-yourself nature of YouTube: [Read more →]

Continuing with this week’s post-earning season analysis of competitive telecom companies, we look at EBITDA minus Capex, normalized by Revenue.  In other words, something that might be called an adjusted operating cash flow margin.  What we really want is to subtract maintenance capex, which would give us a number that the bond guys weigh heavily because it measures how much cash the business could generate if it weren’t re-investing the surplus for growth.  But that’s a number we rarely if ever have, so we will make do with what we have and see what we can see: [Read more →]

XO Holdings (news, filings) has expanded operations across the ‘Inland Empire’ region of southern California.  I must admit, being from the east coast I had to look that one up on Wikipedia.  The inland empire is the area headed by San Bernadino and Riverside, amongst others.  It’s a fast growing area of course, which is surely one reason why XO has focused resources there.  [Read more →]

We get a lot of PR about 40G and 100G developments and the other next generation technologies like packet-optical systems, but PR does tend to be rather one-sided by its very nature.  What would really help is some independent data to give us a more realistic idea of how badly the industry needs these technologies, when they expect to get it, and how they expect to deploy it.  As it happens, Infonetics is currently running a survey looking into actual carrier plans for deploying such technologies.  Qualified participants will get [Read more →]

Yesterday in a comment on my EBITDA Margin Trends post, Raul suggested that I also plot  EBITDA less Capital Expenditures for telecoms.  I will do so, but along the way I thought it might be interesting to look just at capex trends themselves across the sector.  Now it is no secret that fiber-heavy companies spend more capex as a percentage of revenue, but I still found it interesting to see them side by side: [Read more →]

The Danish telecommunications company TDC has bought itself some more fiber.  The company has agreed to acquire the network assembled by Dong Energy for about US$85M.  What a name this company has, I had to be rather careful writing the title to this post.  Dong was rumored to be looking for a buyer in the late Spring, looks like they finally found one. The purchase will go nicely with TDC’s combined wireless and wireline networks, and brings them [Read more →]

Telecommunications companies are definitely pushing deeper into the nascent cloud computing market.  Today it was NTT Communications (NYSE:NTT, news, filings) and AT&T (NYSE:T, news, filings) who added new cloud-derived products for the enterprise.  As with most new technologies, the cloud is made up of 10% dynamic, revolutionary concept and 90% marketing fluff by people trying to ride the buzzwords to riches.  Nevertheless, we are now seeing real attempts to turn the cloud into actual services people buy, sell, and most of all use.   [Read more →]

Since earnings season has officially ended, it is time for my quarterly look at EBITDA margin trends across the whole range of fiber networking companies.  I don’t use the word CLECs because some of these companies don’t like to think of themselves that way, and frankly the term means less to me than it once did.  The range is all the way from the pure fiber players, to the nearly fiberless – but all of whom specialize in connectivity and compete against the ILECs.  With no further ado, here is [Read more →]

For many in the industry commercial 100Gbps can’t get here fast enough, but it is coming!  Today at the SC09 conference in Seattle, a coalition of made up of Juniper Networks (NASDAQ:JNPR, news, filings), Infinera (NASDAQ:INFN, news, filings), Level 3 Communications (NYSE:LVLT, news, filings), Internet2, and ESNet demonstrated a multivendor 100Gbps routing and optical network.  This group has been working steadily together since last November.  In this case of course, we are talking about the 10x10Gb version of 100G, which requires fewer technical advances and will probably come first. [Read more →]

After making dismissive noises for a while in response to videoconferencing provider Tandberg shareholders’ resistance to its initial bid, Cisco Systems (NASDAQ:CSCO, news, filings) has come back with a new offer.  The new price of $3.41B is a 13.7% increase over its initial bid of $3B.  This time, Cisco seems to have a good number of votes in hand.  Shareholders representing some [Read more →]

Here’s a quick summary of news items that caught my eye this week but for one reason or another I didn’t comment on at the time.

Level 3 Communications (NYSE:LVLT, news, filings) unveiled substantial upgrades to its customer portal.  The new portal offers greater visibility into order placement and review, service and network management, invoice management, and reporting and analysis.  It’s one more step [Read more →]

Zayo Bandwidth has further expanded its fiber to the tower offensive in eastern Pennsylvania.  The company announced today that it will bring another 300 towers on-net in Philadelphia and the Lehigh Valley.   It was a little over a year ago that Zayo won a contract with TMobile for tower backhaul in Philadelphia and Memphis, apparently that effort has been going well enough to justify further investment. [Read more →]

Terremark (news, filings) [a subsidiary of Verizon (NYSE:VZ, news, filings)] has acquired DS3 DataVaulting, a Virginia based company that as the name suggests specializes in managed off-site backup and restore services.  DS3 will contribute about $6M in annual revenues and $1.5M in EBITDA before synergies.  The $11.5M purchase will further add to the company’s expanding managed IT services suite and enhance the company’s presence in the federal market.   That’s a market the company has been focusing a great deal of resources on, and they seem to have been making some [Read more →]

Continuing its push to decentralize its business markets group and take fuller advantage of its metro fiber assets, Level 3 Communications (NYSE:LVLT, news, filings) has turned its attention to Atlanta.    The company will add capacity throughout the reason and start bringing on net more of the 15,000 businesses its fiber already passes.  Level 3 has long had a major presence in Atlanta, but mainly at the wholesale and network operations level.  However, their metro assets in the area are quite extensive, having been assembled from their own original metro build and additonal assets acquired with Telcove, Progress Telecom, and Looking Glass Networks.  On the other hand, Atlanta has one of the more competitive [Read more →]

As soon as WiMAX upstart clwr announced its new funding package this week, you could hear the mumbling.  Google didn’t pitch in!  Google must not believe in the company any more.  Now, I can’t speak for Google directly, but the market consistently misunderstands the companies intentions.  Google didn’t invest in Clearwire in order to take over telecom, or even to make a start at it.  They did it because it’s worth far more to them to have another last mile alternative in the system than it costs them to help get one started.  If they’re not needed to keep it going, then they will [Read more →]