Telecom Ramblings

In the first datapoint from the colocation and datacenter sector, Equinix (NASDAQ:EQIX, news, filings) reported Q2 earnings after the bell yesterday.  And quite a report it was!  Revenues of $213.2M were above both expectations and guidance of $206-210M.  Adjusted EBITDA of $99.5M was even better, well above projections of $92-94M, and earnings per share of $0.44 well above the street’s projections of $0.33 or so.  Of course, the datacenter space has been the strongest in the sector throughout this recession, and we can only hope that the rest of the sector had even a sliver of the quarter these guys had. [Read more →]

So much news lately…  Privately held CLEC Integra Telecom announced today that it has restructured its balance sheet.   The deal swaps debt for equity and will bring their debt down to about $600M, down from $1.3B.  Of course, there is a price and in this case it is dilution – with Goldman, Sachs & Co., Tennenbaum Capital Partners, and funds managed by Farallon Capital Management LLC as major new shareholders.  The exact terms of the deal were not disclosed, but we can draw a few inferences. [Read more →]

International IP network operator glbc announced today the opening of a new datacenter in Amsterdam.  The new facility, which follows a similar build in London’s Docklands last year, is a part of the company’s push into managed services in the European corporate marketplace.  Their first customer, apparently, is Dimension Data.  This gives them 17 full scale datacenters worldwide, though they offer [Read more →]

Over the past few months, we have seen NYSE Euronext assemble a team of partners with which it will build its next generation infrastructure in and between New York and London.  One big unnamed piece in that team until today was where they were getting the fiber.  The fiber routes are critical because of NYSE Euronext’s desire to drive out every microsecond of latency possible.  With yesterday’s PR it is now clear that they are getting it in large part from metro fiber specialist abvt. [Read more →]

DWDM specialist Infinera (NASDAQ:INFN, news, filings) issued its second quarter earnings today after the bell.  Revenues of $68.9M and earnings per share of $0.19 seem essentially inline with expectations going in.  Of course, the stock tumbled prior to earnings after an analyst report indicated that the company may have lost some part of its Level 3 business to Huawei.  Guidance was therefore critical:  would the company’s revenue recovery be hurt by this news? [Read more →]

Over the past few months there have been several attempts to quantify YouTube’s business model, with very different results.  The main point of contention has been simply “how much money do they lose?”  Today, YouTube fought back on its Biz Blog  with a myth-busting post, taking 5 points and addressing each with a few sentences.  As inspiration they used MythBusters, the television program where two guys try to debunk urban myths by actually reproducing them.  Did YouTube succeed? [Read more →]

The dismemberment of Nortel continues at a brisk pace.  Today the Canadian based equipment maker announced it has found a buyer for its Enterprise solutions business, which makes phone systems for office use.  Avaya will buy the EMEA portion in an asset sale for $475M.  The company will also become the stalking horse bidder on the American (North and South) portion.  Strictly speaking, that means that there will be an auction and Avaya gets to bid first, but they can be outbid.  [Read more →]

Yes, according to the event calendar it’s time for another dose of financial reality in the internet infrastructure and telecom sectors.  Because earnings are a lagging indicator, actual second quarter results seem likely to remain relatively dismal and the story there will be how well the recession has been managed.  What everyone will be looking for is signs of life in guidance for the second half of the year.  Will the purse strings loosen up a bit?  With that in mind, we will hear on Tuesday from [Read more →]

A few weeks ago, the federal government chose a definition for broadband in the context of the stimulus package and the goal of extending bandwidth to all.  The bar they chose, a minimum of 768kbps down and 200kbps up, has been widely panned as a decade late.  But since then, I’ve been thinking that having such a ‘definition’ in the first place is the ludicrous part.  It just doesn’t make sense to have a single threshold as our goal for every dwelling in the USA.  [Read more →]

Just a month or two ago, it seemed like every fiber network in the country was considering its options.  The second quarter began with q considering the sale of its longhaul networks, something which for a while woke up everyone from Verizon and AT&T on to Level 3 and all the way to Cogent.  Global Crossing, which has been beating the M&A drums all year, did so again bringing up the possibility of Savvis.  And then of course word leaked out that Sprint was considering contributing its wireline business toward some sort of joint venture.  Every major network was either in play or looking to buy.  But the result?  [Read more →]

Telecommunications equipment giant Alcatel-Lucent (NYSE:ALU, news, filings) has taken us one more step into the world of 100G by introducing the industry’s first 100 Gigabit Ethernet service routing interface for the edge.  The new service is enabled by “unique silicon innovations” and delivers the massive bandwidth everyone is expecting from 100G.  The edge is where much of the brains of a network is located, and the introduction of 100G interfaces will help service providers [Read more →]

Orange Business Services announced today that it has won a large contract with the German Foreign Office.   The 5 year deal involves wired connections to 180 sites worldwide, another 50 by satellite.  In addition to basic transport, other services such as VPN and Voice will be layered on top.  That’s a pretty hefty deal by anyone’s measure.  Orange Business had already held the precursor to this contract, which of course made it easier to keep.  But the new contract is almost double the size of the old one. [Read more →]

According to various reports, AT&T (NYSE:T, news, filings) and the Communications Workers of America (CWA) have finally broken out the peace pipes.  Not everywhere though, just in the Midwest for some 18,500 workers.  The new 3 year contract appears to be a compromise, with workers getting pay increases but also agreeing to pay more for health insurance.  It’s not a done deal yet of course, union must vote on whether to accept the new contract first.  But I suspect everyone is rather tired of this by now, and if they were going to strike [Read more →]

The shakeup at Internap Network Services (NASDAQ:INAP, news, filings) continues.  From an SEC filing today:

On July 14, 2009, Internap Network Services Corporation (the “Company”) announced the elimination of the Chief Technology Officer position and, as a result, that Timothy P. Sullivan’s employment will terminate effective July 31, 2009. The Company anticipates entering into a separation agreement with Mr. Sullivan regarding the terms of his separation, a copy of which will be filed with the Securities and Exchange Commission following execution.

Of course, Eric Cooney just took over as the new CEO in March, and since then it apparently hasn’t been a fun place to work.  The [Read more →]

Carl Icahn isn’t the only majority shareholder of a telecom looking to take advantage of the market downturn.  Dutch PTT KPN (NYSE:KPN, news) has now bid for the 44% of international VoIP wholesaler iBasis that it doesn’t already own.  The proposed price of $1.55 per share was a 19% premium above Friday’s close of $1.30, but since then the price has risen to $1.71 at today’s close.  Apparently traders think KPN will have to raise its bid for IBasis (news) [a subsidiary of KPN (NYSE:KPN, news)] . [Read more →]

Phoenix ONE, the huge (530K square feet) new data center facility built by i/o Datacenters, continues to rack up independent fiber connections.  Yesterday both Cox Business and Level 3 announced they have brought the facility on-net. Cox and Level 3 will join Qwest and AGL Networks, and others will likely show up as well if they haven’t quietly done so already.  You just can’t ignore a facility of this size in an artificially constricted market for colocation space like this one.  Phoenix ONE just officially opened in late June, but the traction [Read more →]

In response to Carl Icahn’s bid for the rest of XO’s common shares, shareholders have begun to organize, calling themselves the Ad Hoc XO Minority Shareholders Committee.  Their premise is that $0.55 is just too low, and that they trust neither Icahn nor the board of directors he thoroughly controls to keep their best interest at heart.  Some would put it much more colorfully, of course.  Their website is still quite minimal (heck, it’s only been a couple days), but the people behind it claim to represent millions of shares already.  There are somewhere around 85 million shares not in Icahn’s hands, so that is a pretty good start.    When the shareholder vote does happen, they might stand a reasonable chance [Read more →]

There have been so many of these lately, it’s as if the whole financial sector is repositioning and redesigning its IT infrastructure.  Today Equinix (NASDAQ:EQIX, news, filings) announce that the Boston Options Exchange will be locating its  primary matching engines in Equinix’s NY-4 Secaucus NJ datacenter. Once there, the BOX will also participate in the Equinix Financial eXchange. This follows closely on Equinix’s win at NYSE Liffe, amongst others. [Read more →]

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 →]