Telecom Ramblings

Lots of earnings reports today, more coming tomorrow.  Here are quick snapshots of companies in three very different sectors of the telecom and internet infrastructure space: Cisco, CBeyond, and Limelight.

Cisco Systems (NASDAQ:CSCO, news, filings) made all the pundits happy by beating expectations handily.  Revenues of $9.0B and adjusted earnings per share of $0.36 were very strong, as were the company’s comments about the improving economic conditions.  The company also announced [Read more →]

Yesterday, the head of the Metro Ethernet Forum, Nan Chen, unveiled the Carrier Ethernet Neutral Exchange (CENX).  The startup, which has been under development for 5 years, aims to do the same thing as what Equinix is trying to do, i.e. serve as a neutral point of contact between the Ethernet services of multiple carriers.  Unlike that of Equinix, CENX’s service is already up and running in New York, Los Angeles, and Chicago.  One day it’s a vacant lot, the next day there’s a party going on. [Read more →]

Rural ILEC operator Windstream (NYSE:WIN, news, filings) has signed an agreement to purchase NuVox, a privately held CLEC serving the southeast and midwest, for $643M.  They will issue $183M of stock, pay $280M in cash, and assume $180M in net debt, an arrangement that will allow the deal to happen without accessing the credit markets.  The deal, which will bring about 90,000 new enterprise customers to Windstream, is one I hadn’t thought of specifically.  However, I had heard that NuVox was on the market [Read more →]

When it comes to fiber-based telecom, there are ups and there are downs – and then there is TW Telecom (NASDAQ:TWTC, news, filings).  In their earnings report after the bell, the company reported revenues of $304.8M, EBITDA of $109.6M, and earnings per share of $0.05.  Those results are essentially in-line with expectations, except perhaps the earnings per share which beat by $0.01.  Additionally, TW Telecom doesn’t offer much in the way of guidance but who needs it?  You could set your watch by these numbers, here is a summary table of the last 4 quarters ($ in millions): [Read more →]

Last month, Equinix (NASDAQ:EQIX, news, filings) announced its plans to design and build a carrier neutral ethernet exchange service.  The biggest question was, what will the carriers think of it?   Well, the initial response from next generation carriers has been quite positive.  Today, the company announced that AboveNet, Exponential-e, Hibernia Atlantic, Level 3, PCCW Global, Reliance Globalcom and Tinet have signed up to participate in its development.  And that’s where we are right now, in development – there is no product here yet.  But this is a nice selection [Read more →]

RCN Business (NASDAQ:RCNI, news, filings) reported earnings this morning, checking in with revenues of $192M and EBITDA of $56M for the overall business.  While others will probably dissect their main consumer/SME cable business, it is the RCN Metro segment that I generally follow and this quarter these are the first pure public numbers from the metro fiber segment.   [Read more →]

In a bid to cut costs, q announced today that it will freeze salaries and suspend future pension benefit accruals for active management employees for 2010.  Combined with a few other changes to its benefit plans, the company hopes to save $100M over the full year.  The new plan goes into effect with with the new year, but at least they didn’t wait until everyone had finished their Christmas shopping already.  The plan does not affect retirees, former employees and employees covered by collective bargaining agreements with CWA and IBEW.  However, you can call me a cynic if you like, but [Read more →]

The Unity trans-Pacific cable took another step toward completion today.  The cable ship KDDI Pacific Link has brought the Japanese leg ashore at Chikura.   The full system, slated at 4.8Tbps and costing some $300M to build, is still scheduled to be ready for traffic in the first quarter of 2010 – that’s just a few months away!  As recently as last year there were rumbles that this cable wouldn’t get all the way off the ground, but here we are nevertheless.   [Read more →]

Cisco and TMobile Czech Republic today announced the mobile operators new IP backbone, based on Cisco’s CRS-1 router platform.  Cisco is also helping out with gateways and other gear.  The new backbone will support current plans for 3PPP Release 4 and eventual HSPA and LTE deployments for their 5.4M subscribers.  They are clearly preparing for a data explosion, eh? [Read more →]

As often happens during the height of earnings season, a fair amount of non-financial news got drowned out, slipped past my nets, or just left me briefly speechless.  Here are a few of the tidbits I didn’t mean to bypass this week: [Read more →]

The market for metro fiber continues to blaze forward, expanding as if there is no recession.  Today’s new build comes from Lightower Fiber Networks, which operates a dense regional and metro network between and within the Boston and New York metro areas.  The company is now substantially expanding its New Jersey coverage.  It’s more the simply new loop or a few on-net buildings, the expansion covers a range of builds across the region.   [Read more →]

When AT&T (NYSE:T, news, filings) fired back at Google Voice, complaining to the FCC that it was blocking calls that AT&T was forbidden to block, the response from the blogosphere was rather incredulous.  It wasn’t the same thing, it wasn’t even related to last mile networks and thus network neutrality is irrelevant, and Google Voice isn’t even a real voice service.  I tried to make the point that AT&T wasn’t really trying to stop Google Voice, it was using Google as a foil to be heard on the topic of intercarrier compensation.  In its response, Google surprised me by not taking the the “we’re all-IP so obscure telecom regulations shouldn’t apply” line, they actually picked up the gauntlet. [Read more →]

This seems to be the season for wide ranging visions of the network of the future, or perhaps it’s always the season for that in the tech world.  Today it was Juniper Networks (NASDAQ:JNPR, news, filings) who took the stage and laid out its strategy in a blitz of PRs held together by this one.  Personally, I’m still trying to figure out what it all means, however it is clear that Juniper is simply laying out the next generation for a familiar path, i.e. where the internet is routers and routers are the internet.  The main features of the plan boil down to: [Read more →]

After two consecutive quarterly revenue declines, it is nice to see Akamai (NASDAQ:AKAM, news, filings) regain its growth bias in its third quarter earnings report.  Since the company dominates the CDN landscape by most measures, we can probably now say that the negative effect of the recession on the sector has eased somewhat.  Earnings per share still declined slightly, but came in ahead of expectations anyway both for Q3 and for Q4 guidance of $0.39-0.41 as well.  Here is a quick summary of the Akamai’s metrics in the context of the past 4 quarters [Read more →]

International IP services provider glbc reported Q3 earnings after the bell.  They continued the growth they started in the prior quarter, falling roughly within my own expectations, and held costs in line.   A fireworks show it was not, but after the results of Verizon, AT&T, and Level 3, it has been clear that while the carrier market may be recovering from the recession it isn’t exactly roaring back just yet.  Here is a quick summary of Global Crossing’s performance so far this year, followed by my own thoughts and what I gleaned from a quick chat with company management: [Read more →]

Barrons’ Tech Trader Daily has an article this morning about a GAO report worrying that a large outbreak of swine flu could take down the internet.  The argument is a fairly simple one:  if too many people stay home from school and work, they’re going to spend all that time online.  Watching YouTube I suppose.  The extra traffic will then overwhelm woefully unprepared ISPs.  Securities markets could suffer as teleworkers have difficulty doing their trades, e-commerce could slow down, and all manner of havoc could result. [Read more →]

Next generation internet backbone Level 3 Communications (NYSE:LVLT, news, filings) checked in with third quarter earnings this morning.   The company has had a rough year as the economic crisis and other factors have compounded to pressure revenue.  I don’t think anyone was expecting much this quarter, but while the revenue pressure didn’t go away it did at least ebb somewhat as promised.  Here is a quick summary of the relevant numbers, followed by my own thoughts: [Read more →]

In the next two days, two next generation carriers that I cover frequently on Telecom Ramblings will report their earnings:  Level 3 Communications (NYSE:LVLT, news, filings) and glbc.  The recession and the wild currency fluctuations that came with it pretty much made financial modeling for these companies into an exercise in futility, but stability has been creeping in across the sector.  Let’s take a quick look at where these two currently stand [Read more →]

Hybrid wireless/fiber backhaul provider ftwr has finally put forth a restructuring plan, but it wasn’t perhaps quite the one shareholders were hoping for.  The recession and frozen credit markets left the company high and dry, with insufficient scale to support its debt load and not enough cash to build the rest of the way there.  So they froze capex in a clearly untenable situation, began buying back debt at 30 cents on the dollar, and negotiating with large debt holders.  The general outlines of their solution will not be surprising to survivors of the last bubble – massive dilution to avoid a worse fate.  The company’s stock price had more than doubled since August in anticipation of a more favorable outcome, hence [Read more →]

In a filing this morning with the SEC, it emerged that Carl Icahn raised its bid for XO Holdings (news, filings) on Friday.  However, the offer expires today at 6pm Eastern. Yes, that’s right – he gave them a whole weekend to think about it, and the company itself hasn’t even issued a PR or made a filing on the subject.  Here is the text: [Read more →]

Ever since it purchased the northern New England wireline assets of Verizon, FairPoint Communications (news, filings) has had a cloud of doom hanging over it.  The combination of service issues and financial weakness just never looked good, and the company’s travails have been painful to watch.  Even lately as some of the service issues have improved, it has been clear that shareholders were probably toast.  And so it shall be, today Fairpoint formally filed for Chapter 11 in [Read more →]

Telecommunications giant Verizon (NYSE:VZ, news, filings) reported earnings this morning, and like AT&T last week there weren’t many surprises.  Total revenues of $27.3B were slightly above expectations, as were adjusted earnings per share of $0.60.  There was no iPhone of course, but the net increase of 1.2M wireless subscribers was a bit higher than expected.  Verizon is gearing up to challenge the iPhone with phones based on Google’s Android in the fourth quarter, but even with a big launch it will be a while before that could be relevant.  I doubt very much if Verizon’s Droid series will do the iPhone [Read more →]

Or more likely it was just an obvious target.  In late June, when Julius Genachowski was finally confirmed as the new FCC chairman, I posted a simple challenge for him – somewhat tongue in cheek.    Basically, it revolved around the agency’s website, which at the time ranked amongst the world’s worst.  If you started from www.fcc.gov without knowing the layout or cryptic ID numbers, finding any particular document was nigh impossible.  But whether it was me he listened to (highly doubtful) or not, I have to say that they are making some strides.  On Friday the electronic comment filing systems were upgraded.  [Read more →]