Telecom Ramblings

In the wake of Carl Icahn’s bid for the tiny piece of XO Holdings (news, filings) that he doesn’t already own there has been a flurry of activity in the media and blogosphere.  Much of it centers around the amount offered versus what XO ought to be worth, and much makes no sense at all.  So I thought I’d save the rhetoric about whether Icahn’s offer is good or evil or what he might do next for another post and talk about the valuation of XO itself a bit more dispassionately.  [Read more →]

For a long time now, many have expected the majority owner of XO Holdings (news, filings), Carl Icahn, to finally buy out the rest of the company.  Well, he’s now making his move.  In a letter disclosed in an SEC filing today, it was revealed that one of his corporate entities, ACF Industries Holding Corp, has offered $0.55 per share for the rest of the common shares he doesn’t already own.  And at the end of the letter, ACF made clear that they aren’t interested in selling their shares to a higher bidder, meaning that this is not an auction.  This is the second red flag in the last few weeks implying that Icahn is readying XO for a sale, following the recent reabsorption of Nextlink. [Read more →]

According to Commsday and Telegeography, France Telecom (NYSE:FTE, news, filings) and its consortium partners have upgraded both the transatlantic TAT-14 cable and the SEA-ME-WE4 cable  which connects Europe to the Middle East and southern Asia.  TAT-14 now has doubled its lit capacity of 1.87Tbps, while SEA-ME-WE4 raised its capacity by 140%.   Both cables thus should be able to keep pace with traffic growth for another year or two. [Read more →]

It’s now official, Sprint Nextel (NYSE:S, news, filings) has signed an agreement to outsource both its wireless and wireline operations to Swedish equipment maker Ericsson (NASDAQ:ERIC, news, filings).  The seven year deal is valued at $4.5-5B and will apparently begin later this year, although it will take over a year for everything to be fully in place.  The deal is pretty much as expected based on earlier rumors, Sprint maintains ownership and control, while Ericsson does the daily monitoring and maintenance of the equipment itself.  I still don’t [Read more →]

RCN Business (NASDAQ:RCNI, news, filings) has withdrawn its bid for ftgx, leaving Zayo with a clear path again.   Zayo and Fibernet first announced a tentative deal at the end of May for $11.45 per share, but the terms left until mid June for a better offer to appear.  RCN made what might have been such an offer at $12.50 per share just before the deadline, which seemed to indicate a bidding war might ensue. [Read more →]

It is no secret that over the past year, FairPoint Communications (news, filings) has had a few integration problems.  Okay, more than a few.  Since buying Verizon (NYSE:VZ, news, filings)‘s assets in northern New England, they have had all sorts of problems up there.  In the process, they have run up penalties with local phone companies of $2.8M due to subpar service and those pesky service level agreements and such.  The company has now asked the Maine Public Utilities commission to [Read more →]

WiMAX protagonist clwr is ready to turn up its fourth market.  Las Vegas will soon sit alongside Baltimore, Portland, and Atlanta.  Of course, this market has been under construction and testing for a long time, and Clearwire has been selling the service quietly since last month, but the launch won’t be official until July 21 when the full sales effort kicks off. [Read more →]

Tinet announced today that they have been selected by SURFnet, the European research network based in the Netherlands.  The contract, which will span 5 years and cover IP transit from IPv4 to IPv6 and multicast services.  Tinet has had some traction in the educational network arena, already serving BELNET in Belgium and HEAnet in Ireland.  Tinet is of course the new incarnation of the Tiscali international network, now in the hands of private equity.  [Read more →]

The Wall Street Journal is reporting that the US Department of Justice is now looking at industry giants Verizon (NYSE:VZ, news, filings) and AT&T (NYSE:T, news, filings).  They have opened an informal inquiry into whether the two have abused their market dominance following the M&A that sailed through the previous administration’s more favorable regulatory atmosphere.  They seem to be focused on: [Read more →]

I asked this question last year, and the overwhelming response from readers was that XO Holdings (news, filings) would be the next target for M&A.  But it turned out, none of the companies on my list were consolidated.  I think that is largely because the bottom dropped out of the financial markets, else XO seemed right to me too.  A year later, let’s try it again:

[poll id=”27″]

This time you can choose more than one, which of course means that the [Read more →]

As readers of this blog surely know, I don’t cover everything that happens in the sector.  I write about what seems interesting to me each day, but lots of things slip past.  Often it’s the format of the blog, I may seem like I have lots to say about everything but often it’s just not enough to fill a post.  So given the holiday weekend, I thought I’d catch up on a few such items: [Read more →]

What if you had an auction and everybody showed up?  It used to be that way, but for the last year it has been quite the opposite.  Here in the US, Qwest’s possible longhaul sale was met with the sound of crickets chirping – at least at the price they wanted. Tiscali practically had to beg to find a buyer for its UK unit, and it only managed to sell its international backbone (now TINet) for pocket change. But T-Mobile UK?  First it was Vodafone Group (NYSE:VOD, news, filings) planning a bid.  Then we’ve got Orange (France Telecom (NYSE:FTE, news, filings)) sniffing around. Soon thereafter, O2 of Telefonica (NYSE:TEF, news, filings)  wants a piece of the action. [Read more →]

There is little argument that telepresence is one of the most exciting new technologies coming online.  But one of the biggest raps has been that if each solution is proprietary, only people using the same provider.  This week we took another step toward turning telepresence from a sideshow into a real tool. British Telecom (NYSE:BT, news, filings), Tata Communications (news, filings), AT&T (NYSE:T, news, filings), and Cisco Systems (NASDAQ:CSCO, news, filings) demonstrated a four-way conference between different networks:

[Read more →]

The RUS and NTIA have kindly defined broadband for us, what would we ever do without the US government to define a buzzword for us more than a decade later?  Anyhow, if you want to apply for stimulus money, the broadband you need to be spreading to the underserved is described as: (drum roll please) [Read more →]

There are some balance sheet moves that don’t cost anything but which hint at M&A activity, and therefore can be used to feint.  Others have a price tag, and generally mean there is fire under the smoke.  Level 3 Communications (NYSE:LVLT, news, filings) today announced a consent solicitation for its 12.25% bonds due 2013, seeking to change its terms slightly in exchange for a one time payment of 0.75%.  Essentially, in the event of an acquisition they want to be able to use the cash flows of acquired assets on a pro forma basis to justify additional debt.  In layman’s terms, [Read more →]

It’s official, the merger between Embarq and CenturyTel is complete, and the combined entity will start its new life as CenturyLink (NYSE:CTL, news, filings).  Of course the real re-branding work will come later, this is just at the corporate level – everyone else will still see CenturyTel and Embarq for a while.  The combined company will have 7.5M landlines, 440K video customers, and 2.1M broadband customers across a mostly rural footprint.  Those landlines will of course be declining steadily for the foreseeable future, but we should remember that copper may be [Read more →]

At the end of May ftgx agreed to be bought by Zayo for $11.45 per share or about $88M, however the deal allowed Fibernet to solicit better offers through mid June.  Such an offer in fact has surfaced.  According to this SEC filing, RCN Business (NASDAQ:RCNI, news, filings) has offered $96M in cash, or $12.50 per share.  A bidding war could be in the offing, and not surprisingly none of the three companies is talking much. [Read more →]

Let it not be said that AT&T (NYSE:T, news, filings) is afraid to get its hands dirty.  Today they announced a contract to provide VPN services to Republic Services, which specializes in the collection, transport, disposal, and recycling of waste.  That’s right, AT&T is going to hook up everything from the dumps (err, sorry I mean landfills) to the corporate offices.  They’ll be providing voice, data, and video to some 759 sites in a $13.5M three year deal.  Republic Services merged with [Read more →]

As an separate entity, broadband wireless provider Nextlink apparently no longer exists.  The company’s website now redirects to that of XO Holdings (news, filings) itself with this statement:

XO Communications has realigned its product offerings by integrating the Nextlink Wireless, Inc. broadband wireless products and services into the company’s existing Business Services and Carrier Services business units.

In other words, XO has quietly disassembled the unit and absorbed the pieces.  No doubt most of the revenue will go to the carrier services division, since it was mostly wireless backhaul.  The move will probably let XO save some money by reducing the overhead needed to run it as a separate segment. [Read more →]

ImClone Systems has expanded its relationship with Level 3 Communications (NYSE:LVLT, news, filings), moving from a few transport links to a package including colocation, IP transit, and IPVPN as well.  The network will hook up datacenters in Newark and Frankfurt to ImClone’s two locations in New Jersey, one in New York City, and one in Heidelberg, Germany.  One of the drivers behind the deal is apparently the need to transfer large files between Germany and the NY Metro area, presumably large amounts of medical research data.   [Read more →]

The Phoenix market has a new big data center online, i/o Data Centers has officially opened the doors of Phoneix ONE.  The new facility is, to put it mildly, huge: 538,000 square feet on 31 acres of propery, and is more than four times the size of its other facility – Scottsdale ONE. [Read more →]

In a major deal announced yesterday, British Telecom (NYSE:BT, news, filings) and Tata Communications (news, filings) have signed a five year global strategic voice services agreement.  Tata has now become BT’s primary supplier outside of its main footprint, and BT will supply Tata with access to the UK market and later Europe.  This alliance is a natural one since the two multinationals have rather complementary assets and customer bases.  With carriers of all stripes less and less interested in spending capex these days, we will likely see [Read more →]

Congratulations on finally being confirmed as FCC Chairman!  Now ignore the cameras, roll up those sleeves, and get started already!  You’re already more than 8 years behind on intercarrier compensation, the bickering over special access is getting downright mean, and and there are six trucks from Verizon, AT&T, and Comcast waiting at the loading dock ready to unload this month’s paperwork designed to slow you down.  And oh yes we’re all still waiting for that [Read more →]