Telecom Ramblings

Optimum Lightpath, the metro fiber and business services division of Cablevision, began offering HD Voice to its customers last week.  Lately, I have found myself wondering, just what the heck is HD Voice?  Not at a definitional level, that part is easy – HD Voice uses a wider channel and therefore just sounds so much better than a traditional phone call.  I mean, as a phenomenon does HD Voice really have legs? And if so, what kind of legs are they? Lately, VoIP bloggers have been making an increasingly loud roar on the subject, much of which seems to have come out of Jeff Pulver’s recent conference.  Today Andy Abramson gave his endorsement to the idea it can re-invigorate the VoIP segment.    Those are certainly the right names in the VoIP blogging community to have behind you. [Read more →]

Last fall I introduced a Forum on Telecom Ramblings in response to a multi-day outage on another site.  It was hurriedly done and not really up to the task at hand, and quite frankly the readership just wasn’t wide enough yet to support it anyway.  But the dream did not die, and since then I have experimented with various forum software in preparation for another try.  The time has come, and you can find the new forums in the top menu bar under the name ‘Community’.  You will also see the latest posts in the forum alongside the comment form beneath every post, and I may find other places to splice it in. 

The general idea behind my forums is [Read more →]

Colocation and interconnection specialist Telx raised a tidy sum of $43.5M this week.  The new financing is being provided by CIT Communications, Media & Entertainment and RBC Capital Markets and both replaces an existing loan and adds new capital for expansion.  This seems like a further indication that the credit markets continue to thaw.  Money is available, though I’m sure it’s still not cheap. [Read more →]

Network equipment provider Ciena (NASDAQ:CIEN, news, filings) reported earnings today, and while the forecast is for improving weather their results show that it is definitely still raining outside.  Fiscal Q2 revenues of $144.2M were down almost 14% sequentially and 40% over the same quarter last year.  That’s definitely nothing to write home about, almost everyone expected a decline but not that big.  The company reported a loss of $503M, but most of that was on a $456M goodwill charge which doesn’t really mean very much at the moment.  However, adjusted net loss of $0.25/share was still not a happy number. [Read more →]

Yesterday Brendan posted this question about Level 3 Communications (NYSE:LVLT, news, filings):

I am a LVLT shareholder, and it seems everyday when I check up on their news, they just upgraded an a regional network. What do these upgrades mean, and does it make any difference to a shareholder, or just a better experience to the customer.

This effort to reach mid-sized regional and local enterprises by Level 3 began last month, when they announced the it during their earnings call along with the first markets in the expansion.  I did write this article about it at the time, which still represents most of my thoughts on the subject.  Since then, the company has issued five PRs, one for each market – Washington DC, Colorado, Nashville, Seattle, and upstate New York.  In each they introduced the general manager for the market, listed how many thousands of enterprises their fiber passes in each, and announced an [Read more →]

International fiber and data provider glbc announced a series of upgrades to its undersea infrastructure today.  According to the company, the moves come in direct response to traffic growth across the board internationally but most specifically into and out of South and Latin America.  In order to keep up, Global Crossing is adding [Read more →]

When their merger completes sometime this summer, the union of CenturyLink (NYSE:CTL, news, filings) and eq will be known as ‘CenturyLink’.  All that stands between them and that glorious title is final FCC approval.  That approval isn’t really much of a hurdle of course, can anyone imagine the FCC saying no to this one after presiding over the reconstitution of AT&T?  Of course not. [Read more →]

Vijay Gill wrote a nice article today looking at the common telco fear of becoming a dumb pipe.  He suggests that they are digging their own hole by outsourcing their networks and personnel, that they are de-emphasizing the very things they should be putting their effort into.  To put it another way, if you can’t do the ‘dumb pipe’ properly and make decent money then how can you expect to be the best ‘smart pipe’?  That only works if ‘best’ means [Read more →]

Upstart WiMAX operator clwr is apparently now selling service to Las Vegas, although it won’t officially launch the whole package just yet.  Word leaked out after coverage maps started showing up on clear.com, and the company confirmed the news yesterday.  Las Vegas is of course on the list for this year, and will apparently follow the Atlanta launch quickly. [Read more →]

I am in the process updating my metro fiber and lit building list, so today I am soliciting for any new or simply more recent data that anyone may have.  If a company is already on the list and keeps updated numbers in a public document, I will likely find it easily enough.  If not, feel free to send updated information along.   All structures that consume bandwidth count, from carrier hotels to general stores and even wireless towers.  While a few companies on the list have European assets which are included in their numbers, for the most part metro fiber and lit building information in Europe has been harder to come by.  I’m going to at least try [Read more →]

Level 3 Communications (NYSE:LVLT, news, filings) announced fiber and equipment upgrades today along the Texas-Mexico border, specifically in McAllen and Laredo.  This initiative will bring both additional capacity and a wider range of services to the region, and will allow Level 3 to better target cross-border traffic of all kinds.  Level 3’s footprint in southern Texas is not part of its original build.  It comes from the WilTel and Broadwing footprints, but I have never known if the facilities were part of the original build of either of those two operators or if the fiber came as part of a capacity swap from someone else.  Perhaps a reader knows? [Read more →]

With all the hubbub surrounding MagicJack, it is easy to dismiss them as nothing more than a marketing machine.  But behind the infomercials lies a network – the CLEC network that often gets credit for the ability to offer such low pricing.  That network is built and largely operated by MagicJack’s sister company, Stratus Telecommunications.  MagicJack and Stratus are both owned by Ymax but are managed independently, and while Stratus supplies the infrastructure for its sibling, those same products are also sold to network operators across the sector.  Stratus’s offerings are based on [Read more →]

It does seem now that winter was the low point for market valuations of fiber based competitive telecoms in this cycle, because since then there has been a steady upward trend.  Part of that has come in the debt markets, where bond prices have in most cases moved closer to par.  For instance, back in December, Level 3 bought back a pile ($173M) of its 6% convertibles due 2010 at just 70 cents on the dollar, they now trade in the mid 90s.  But common stock has also done well across the sector despite the incessant drumbeat of negative news coverage.  Here is a graph with my latest EV/EBITDA calculations for a cross section of the industry: [Read more →]

Data Center Knowledge had an excellent article yesterday about the looming shortage in colocation space, I recommend a read.   The frozen credit markets forced many projects to be canceled or delayed over the winter, and only a few have restarted.  The trouble areas seem to be Santa Clara and Northern Virginia, which have vast existing colo footprints but even greater demand.  Given the long lead time for new facilities, a shortage seems inevitable at this point. [Read more →]

Two months ago, Zayo raised $128M with the stated intention of spending it on M&A.  Today, they made good on that promise with the announcement that they will be buying ftgx.    The price will be $11.45/share, for a total purchase price of a bit over $90M including net debt of $5M.  It’s not quite a done deal, Fibernet has a couple weeks to solicit a higher offer.  However, if the transaction goes through, Zayo will [Read more →]

SGI has deployed one of its modular datacenters, branded the ICE Cube, at i/o Data Center’s new Phoenix ONE facility.   i/o has been moving quickly on the huge 530,000 square foot facility, lining up connectivity from  AGL Networks and Qwest and raised flooring from Tate.   One of the last to raise money as the financial industry imploded, they are clearly hoping to capitalize on the slowdown in construction by getting their new space online.  It seems a bit early though for a functional ICE Cube though, I didn’t think the facility would be on line yet.  But I guess since these things can be outside, all they need is [Read more →]

With its acquisition by private equity now complete, Tinet now begins a new life on independent footing.  Rising out of the ashes of the Tiscali empire, their business plan starts out in the wholesale IP/MPLS market.  Of all the top backbones, only Tiscali is a pure play.  Cogent comes the closest to a parallel, but even then half their business is in enterprise metro access.  [Read more →]

Terremark (news, filings) [a subsidiary of Verizon (NYSE:VZ, news, filings)] reported its fiscal Q4 earnings today.  Revenues of $68.9M were lower than expected, but EBITDA of $22.1M and earnings per share of $0.06 were quite good.  Overall, a familiar story of slower growth due to the recession but with cost containment more than keeping pace.  For fiscal 2010 the company offered guidance that reflects the economic slowdown, projecting revenues of $290-300M (which would be 18% growth) and adjusted EBITDA of $80-85M.  In other words, still growing nicely, just not as quickly as last year. [Read more →]

Taking its CDN business into eastern Europe, Level 3 Communications (NYSE:LVLT, news, filings), announced a deal with Czech-based Internet Billboard.  Level 3 will provide caching, download, and traffic management througout the region, including the Czech Republic, Poland, Romania, Slovakia and Russia. The new capabilities will help Internet Billboard to centralize and streamline its ad delivery capabilities.  [Read more →]

In late March, news began to dribble out that the transpacific cable PC-1 was for sale, and the two bidders were apparently the Japanese telecom giant NTT Communications (NYSE:NTT, news, filings) and privately held Pacnet.  At the time, I put my money on NTT and if this were Vegas I would have won.  Today NTT announced that it has entered into a contract to buy the cable from its private equity owners.   Of course, it wasn’t exactly a longshot bet.  NTT was by far the most logical place for the PC-1 to end up, in fact I’m surprised they didn’t acquire it sooner. [Read more →]

LightReading had a wonderful article late last week discussing what telecom carriers can learn from Amazon.  The topic is very relevant nowadays, as the industry struggles with net neutrality.  The owners of last mile fiber do not want to be dumb pipes, they want to make money off those bits by delivering services and don’t appreciate when others do so in competition to them.  They need all that content and can never produce it themselves, yet trying to control its usage threatens to start a war for public opinion that they likely cannot win whether the economics back them up or not.  So what to do? [Read more →]

Reuters reports that q isn’t going to get near the asking price for its longhaul network assets.  I doubt anyone is terribly surprised.  However the reports also say that bids will be incoming anyway, meaning that the game is apparently still afoot.  So, let’s forget the list price and consider this an auction, where the seller’s reserve price is not known.  How much is Qwest’s longhaul biz really worth? [Read more →]

Last week I posted a graph of EBITDA margin trends for a cross section of longhaul and metro fiber providers.  In the comments, fellow blogger Dave Rusin of Telecom Straight Shooter mentioned that a Gross Margin chart might also be interesting.  Now, I had been thinking about it, but while I was thinking, another reader who recently became a fellow blogger, Brian Scully of Silver Oak Advisors had already put it together and he very kindly passed it along: [Read more →]