Telecom Ramblings

The rumor returns every few months in some form, so today’s upwelling over on Seeking Alpha isn’t a shocker.  Someone hears that Google wants a fiber backbone, then obviously that must be Level 3 Communications (NYSE:LVLT, news, filings)!  And it makes so much sense on the surface.  Where else can Google expand to other than into the fiber itself?  How else to counter the anger of unwilling future dumb pipes?  With Google even in the phone/voice business now with Google Voice and its Android platform for mobile devices, it is even easier to make the case.  It rolls off the tongue so easily, that the rumor itself seems immortal.  Now as readers of this site know, I love a good M&A rumor, but this one has always been a dream of traders and media outlets and nobody else’s.   [Read more →]

Fiber and data provider TW Telecom (NASDAQ:TWTC, news, filings) has been selected to provide voice and data services to Peterson Air Force Base in Colorado Springs, which is the home to NORAD, the 21st Space Wing, Air Force Space Command, and the United States Space Command.  The company will supply both voice and data services over 5 years to the tune of $1.4M, hooking up the base to its extensive metro network in the region.   [Read more →]

In one of the better stunts I have seen to bring attention to poor download speeds at an ISP,  a South African company called Unlimited IT staged a race.  They would take a nice chunk of data and send it 50 miles away via the internet and also via carrier pigeon – in a data card strapped to its leg.  Any guesses who won?  Well, it wasn’t the South African giant Telekom. [Read more →]

Upstart fiber network operator Zayo Group (news, filings) has closed its acquisition of ftgx, bringing the latter’s colocation and interconnection services underneath Zayo’s growing umbrella.  Soon after the acquisition was announced in May, a rival bid by RCN Business (NASDAQ:RCNI, news, filings) threatened to knock Zayo’s acquisition train off the tracks.  However, after a couple weeks of negotiations RCN dropped out of the bidding and now it’s all done.  So what will Zayo do with the Fibernet assets? [Read more →]

Datacenter operator Equinix (NASDAQ:EQIX, news, filings) announced another stage in its expansion program, planning two new data centers.  In the Washington DC area (Ashburn) they will add a 152,000 square foot facility that they will be referring to as DC6.  The new facility will cost around $100M overall, $30M in capex during 2009.  In Silicon Valley, they will add a 170,000 square foot facility that will go by the name SV5.  That one will cost $145M overall, with the first stage being $100M and of that $30M in capex during 2009. [Read more →]

Datacenter specialist sdxc has tapped the credit markets, reeling in $100M in senior secured financing from a syndicate of banks arranged by RBC Capital Markets.  The interest rate is variable but seems quite low at first glance, and financing will be in the form of delayed draw term loans.  It’s not particularly long term debt, they will start repaying principle in 2011 and finish in 2014. [Read more →]

There’s a thoughtful article over on allafrica.com regarding what Africa can and cannot do with all the undersea bandwidth that has come ashore already or is coming soon.  This summer SEACOM finally went online along the east coast, and WACS is due along the west coast in the next couple of years, which will add to the other 5 cables to provide an aggregate capacity of over 10Tbps to the continent.  That’s not much compared to what feeds Europe and North America, but for Africa it’s huge.  However, few telecommunications companies on the continent are at a stage where they can actually use it, and even those who are generally still [Read more →]

Everyone knew that Deutsche Telecom AG (ETR:DTE, news, filings) was looking at alternatives for its TMobile UK operations, but I guess I didn’t actually believe they would manage to make a deal.  So yesterday’s announcement of their intention to form a 50/50 joint venture with France Telecom (NYSE:FTE, news, filings) did manage to surprise me slightly.  The new company, assuming it all happens as tentatively proposed, will have around 37% of the UK mobile market, leapfrogging both Telefonica’s O2 and Vodafone in scale.   [Read more →]

International IP services provider glbc is hoping to tap the credit markets to the tune of $650M of senior secured notes due 2015.  That’s a pretty hefty pile of cash of course, but most of it is aimed at refinancing existing debt.  We knew they were going to make some kind of move in the credit markets since they have already tendered for the $225M of GC Impsat notes and consents.  Apparently lots of those notes are being tendered although the deadline isn’t until Sept 21.   [Read more →]

Spanish based international telecommunications giant Telefonica (NYSE:TEF, news, filings) and Chinese based fixed and mobile provider China Unicom (NYSE:CHU, news, filings) have deepened their relationship.  In a large stock swap, each will buy $1B in stock in the other.  That will bring Telefonica’s stake in China Unicom to some 8%, and give China Unicom its first stake in Telefonica of just under 1%.  The two intend to cooperate on developing mobile phone technology, servicing multinational corporations, and even in exchanging managers.  I think they like each other… [Read more →]

If there was any doubt about the level of commitment of Level 3 Communications (NYSE:LVLT, news, filings) to the CDN sector, last week’s news should help clear it up.  On Thursday, Level 3 enhanced its content delivery capabilities with a new offering called Content Analytics.  Customers can use the new capabilities to gain insight into the traffic patterns of their audience, and is capable of supporting over 100,000 URLs per CDN caching property.  Others have detailed the service itself, I’ll simply say that with the economic pressure the company is under it is telling that [Read more →]

There has been an explosion of rumors and stories regarding former VoIP child star Vonage (NYSE:VG, news, filings) lately.  The only one that was true turned out to be that Vonage is working on an iPhone app, the rest have been inventions of the street.  As rumors go, they have generally been transparently silly, such as the AT&T buyout rumor over the last few days.  Where is the imagination?  Put some effort into it!  You want a better buyer for Vonage? I’ll give you one… [Read more →]

Network equipment provider Ciena (NASDAQ:CIEN, news, filings) reported its fiscal third quarter earnings this morning, providing the latest update on the state of the economy in telecom.  The equipment providers have taken the brunt of the recession, as carriers have cut back on the capex that has been their lifeblood.  But this quarter, Ciena finally managed to turn the tide with sequential growth with revenues of $164.8M from $144.2M last quarter.  That’s really quite decent, I think analysts were only looking (hoping) for the low 150’s.  Adjusted net loss of $0.05 was also better than anyone seems to have expected. [Read more →]

A twin pair of rumors hit the street yesterday, both of which seem to be living proof of the phrase “There’s a sucker born every minute”.  First, there was this insane notion that AT&T (NYSE:T, news, filings) might buy Vonage (NYSE:VG, news, filings).  Right, that’s why they spent years choking off their own CallVantage VoIP product – so they could attract regulatory scrutiny by buying another one, cannibalize their own revenue with it, and further piss off the rather significant percentage of [Read more →]

q has made its 100G move, they will be upgrading their network to 100G with gear from Alcatel-Lucent (NYSE:ALU, news, filings).  Of course, only bits and pieces of 100G gear are actually ready yet from any provider, but Qwest will start with the 100G ethernet router interface announced earlier this summer. The 100G portion of the ultra-longhaul DWDM gear will no doubt come online when it is ready.  This is a nice win for Alcatel-Lucent, certainly giving its 100G efforts an early boost.   [Read more →]

Yesterday, Infinera (NASDAQ:INFN, news, filings) announced its new product line for undersea cables, making formal something that had been trickling out over the past few quarters.  The new Submarine Line Modules (SLMs) incorporate silicon optical amplifiers for ultra-longhaul reach.  As with other Infinera gear, operators can expand to 160 wavelengths on a single fiber, which will help current cables in the Atlantic continue to meet capacity requirements for a few years if true under those conditions.  The public material doesn’t give details on the actual distances the new gear is capable of, it almost certainly depends on the design and age of the particular cable.  But they did give us the name of one of its customers: [Read more →]

Today Vonage (NYSE:VG, news, filings) announced that Apple has approved its iPhone application.  Last week the company’s stock surged and I thought it might be due to M&A in the air but it since has become apparent that it was just a critical mass of buzz about getting onto the iPhone.  So what does the app do?  Vonage isn’t saying, but geez how hard can this be? [Read more →]

EBay today announced the sale of a 65% stake in VoIP phenomenon Skype to private equity at a price of $1.9B.  The buyers are led by Silver Lake, Index Ventures, Andreessen Horowitz, and the Canada Pension Plan Investment Board.  Ebay will keep a 35% stake in the company, and thus keep a finger in the pie and stay in the game – just in case they were right all along about buying it, just wrong about how to leverage it.  The $1.9M pricetag values the overall company at $2.75B, just slightly up from the purchase price – so it may not have been a great deal for Ebay, but it could have [Read more →]

With telecom news in the USA at low ebb before Labor day, a bit of news from overseas is quite welcome.  Gulf Bridge International (GBI), which is planning a new cable connecting the nations of the Persian Gulf to each other and to both India and Europe, has chosen the David Ross Group (DRG) to manage the effort, according to an announcement this morning.  DRG specializes in this kind of development work for submarine cables and is a natural choice, though personally I don’t envy anyone trying to work in that part of the world. [Read more →]

Earlier this morning, datacenter and managed hosting provider Savvis (news, filings) [a subsidiary of CenturyLink (NYSE:CTL, news, filings)] unveiled its next generation cloud computing platform, dubbed Project Spirit.   The biggest feature?  Virtual Private Data Centers, or VPDC’s, with multi-tiered quality of service.   The new platform will be powered by Nexus switches from Cisco and automated by vSphere and VMsafe by VMWare.  Of course, at the moment this is just a project in development, it isn’t even going into beta until wintertime. [Read more →]

Telecom equipment supplier Calix announced today that it has raised $100M in new financing.  The total will include both $50M in equity from its current investors and another $50M in debt from Silicon Valley Bank.  It’s a substantial move for Calix amidst capital markets that are friendlier than they were 6 months ago, but are nevertheless still quite unfriendly. [Read more →]

Upstart metro and regional fiber provider Zayo Group (news, filings) has also thrown its hat into the stimulus funding ring.  That’s not a surprise, the company has been quite vocal in its efforts, and began putting together a team to pursue the opportunity back in the first quarter.  They are seeking $25M directly, which would be used to extend its network into 80 communities and 21 institutes of higher education in the Midwest.  And beyond that they have applied with partners for another $50M in other markets.  To bolster their bids, they will be committing $10-15M of their own cash to the effort.   These are rather substantial amounts for a company of Zayo’s size, and if the bids are successful [Read more →]

So did the non-participation of Verizon (NYSE:VZ, news, filings), AT&T (NYSE:T, news, filings), and q harm the industry’s ability to find projects to spend the first $4B in stimulus funds the RUS and NTIA are offering?  Are you kidding?  As the Friday deadline closed and the applications piled up, the number came to $28B requested, 7 times the amount available.  That’s a lot of projects proposed by people who aren’t troubled by the network neutrality strings that might be attached.  The breakdown: [Read more →]