Telecom Ramblings

In response to my post on the merits of a TWTC buyout of XO, reader BBS astutely commented:

“They have the integration expertise” this is a very subjective assumption. Xspedius may have gone well, but that, as they say is no indicator of future results. XO has integration experience too… remember Allegiance? How about LVLT’s integration experience, which by any measure historically has been abominably bad. Circuit Engineering, switch (hard or soft) and OSS platforms in the telecom industry are much harder to integrate than traditional operating systems such as CRM, HR, and others. As a MFSWorldCom vet, you can understand why I remain very skeptical of any claims of easy integration among telecoms/ fiber network providers.

Indeed it is a subjective assumption, and it is quite [Read more →]

The other day I mentioned that TW Telecom (NASDAQ:TWTC, news, filings) seems like it should be ready to make a big move.  In 2009 the company became profitable at last, and entered this recession in a position of stability and with continued growth in mind.  Such difficult times as these can be opportunities for those with the means, and the lack of easy access to capital makes this a buyers market if there ever was one.  And there is one M&A possibility that stands out from the rest for TW Telecom, one that is both game-changing and entirely feasible:  XO Holdings (news, filings).  No, I have nobody whispering in my ear, in fact it is too quiet – as I have said.  I’ll make the case as follows: [Read more →]

Level 3 Communications (NYSE:LVLT, news, filings) announced today that it has been selected to provide wavelengths on a national scale for the international wholesale arm of European telecom giant Telefonica (NYSE:TEF, news, filings).  The contract, which expands on an existing relationship, is for 10 years and represents the single largest capacity commitment in Level 3’s history.  They will provide triverse routes between major PoPs, diverse routes elsewhere, and have dedicated capacity available for expansion on each route.  Essentially, Telefonica has chosen to outsource the bulk of its US transport network for the long term. [Read more →]

On Seeking Alpha yesterday, Alex Salkever posted an interesting article discussing how efficient cloud computing may change the sector.  It almost certainly will, and I’d like to add my two cents on the subject.  Specifically pertaining to datacenters, he said:

“Data center operators like Equinix (EQIX) could also feel the pinch. They all expected massive demand for custom designed homes that featured servers and other critically important hardware used to run networks and businesses. But if there is less need for servers, there is less need for data centers.”

While there is certainly a kernel of truth in that, there are several misconceptions [Read more →]

Telecommunications giant Verizon (NYSE:VZ, news, filings) has been making the rounds lately with equipment makers, trying to convince them of its vision.  Verizon apparently likes the packet-optical transport system it uses in the metro so much that it wants something just like it in the longhaul too.  Their dream gear would combine optical switching, Sonet, and especially MPLS-TP rather than Ethernet.  If they can convince anyone to develop such gear, they hope to deploy it in the 2011-2012 time frame.  [Read more →]

Not to be outdone by the little guys, national metro fiber and services provider TW Telecom (NASDAQ:TWTC, news, filings) announced an expansion of its own today.  They have constructed a new fiber loop connecting Tualatin and Lake Oswego, including the Kruse Way business district, to the company’s already extensive metro network.  They have long been active in Portland, even buying some of Enron’s old fiber at one point.  This expansion follows a substantial expansion in Tulsa late last year, and TW Telecom is clearly not afraid to put capital to work despite the economy. [Read more →]

According to Rudolf van der Berg over on Internet Thought, the FTTH effort in the Netherlands has run into a little snag.  What snag? Oh just that little thing called money.  The buildout is supposed to cost some $4B, however the partners KPN (NYSE:KPN, news) and Reggefiber were supposed to contribute only 25% each.  The rest was to come from the banks, and of course we know that banks all over the world have amazingly re-learned the word ‘no’ (or in this case perhaps  ‘nee’) with a vengeance.  [Read more →]

As if we needed more evidence that the metro fiber sector remains strong despite the economic disaster that continues to unfold, in the last few days two of the companies I have tracked have found avenues for spending and growing their businesses.  Late last week, FiberLight (news) purchased a 20 mile, 96 count fiber network serving downtown Waco Texas from independent telephone company Consolidated Communications.  The new fiber joins other Fiberlight’s Texas metro assets in Dallas, Fort Worth, Houston, and San Antonio.  While it is a small purchase, it continues the trend [Read more →]

Two European telecom powers, Vodafone Group (NYSE:VOD, news, filings) and Telefonica (NYSE:TEF, news, filings), announced today that they will share mobile network infrastructure in four countries:  Spain, Germany, Ireland, and the UK.  They will be sharing sites, masts, and power supplies, while each will use its own radios and vendors.  They will therefore be able to more quickly meet the needs of European consumers, who may be buying less phones due to the recession but are nevertheless [Read more →]

There has been substantial buzz over the last week or so about Netflix (NASDAQ:NFLX, news, filings) and complaints from users about streaming difficulties.  As one might expect, some of the difficulties are simple confusion, but the phenomenon has been enough to prompt Netflix to respond on its blog.  Essentially, he blamed the ISPs for congestion problems in their networks.  That much should be obvious, it’s rather hard to see Netflix deliberately slowing down its own service on some clients and not on others.  But this relatively minor flurry of criticism may foreshadow something Netflix’s growing service is going to be facing all year.  Put together these pieces: [Read more →]

In Part I of this article, I gave my own impressions of RCN Metro’s position in the sector and where they are heading.  In this part, Telecom Ramblings interviews Felipe Alvarez, President of RCN Metro.  Mr. Alvarez has been in the telecommunications sector for 20 years, and he came to RCN Metro via the acquisition of ConEd Communications in 2006 where he had been Chief Operating Officer.

TR: What effect has RCN Metro seen [Read more →]

Within the universe of metro fiber providers, the howling winds of the recession seem far away.  The services sold are rarely discretionary, the competition is light, and demand remains strong.  Against this backdrop, Telecom Ramblings takes a deeper look at one participant in this market: RCN Metro Optical Networks.  RCN Metro is a subsidiary of cable provider RCN Business (NASDAQ:RCNI, news, filings), but is run as an independent entity.  They generated [Read more →]

In sorting my lit buildings and metro fiber list, there is one clear outlier no matter how one looks at it.  Cogent Communications (NASDAQ:CCOI, news, filings) at latest report had 1,326 lit buildings connected by 12,200 metro route miles.  That’s 9.2 miles between buildings, a sparse network that one might expect of a wholesaler or even the telecom division of an energy company.  Yet Cogent explicitly hooks up mostly enterprise buildings.  And while they certainly visit many carrier hotels, they have little if any use for ILEC central offices.  At first glance it’s quite puzzling, but it all comes down to [Read more →]

As a privately held company, pan-European fiber operator Interoute (news) doesn’t have to tell us anything. Therefore, when they do give us financial details then you know they must have had a good year.  Today Interoute announced 2008 revenues of €247M and EBITDA of €25M, up from €187M and €-6M in 2007, respectively.  That’s 32% revenue growth, which is a heck of a number any way you count it.  Of course, it’s hard to put that into dollars in a meaningful way given the huge swings in exchange rates lately, but in euros [Read more →]

Competitive service provider PAETEC (news, filings) announced an expansion of its fixed wireless offerings yesterday.  They now offer the service across their serving area, which presumably means the McLeodUSA and USLEC footprints as well.  I hadn’t known that PAETEC had a fixed wireless offering, but then again I hadn’t actually looked either.  The capability derives from their acquisition of MPX Wireless. That was something of a stealth M&A, if nothing else then because today’s PR and a brief quote in the Q2/08 conference call, I can’t even bring it up on a Google search.  Ah well, maybe [Read more →]

There is an article in BusinessWeek today stating that large telecom operators like Verizon (NYSE:VZ, news, filings), AT&T (NYSE:T, news, filings), and q are dragging their feet on the stimulus.  They are grumbling and complaining that the regulations may be too onerous, that they might be forced to open those new networks to competitors.  After all, free money is supposed to be free, right?  What they’re doing of course is trying to affect the final form of those regulations to their advantage. Besides, they don’t actually need the money.  Sure they want the money, they’d be glad to spend it, but they generate so much cash flow already.  Besides, they don’t actually care much about expanding broadband coverage and everyone knows it – those customers are already [Read more →]

Alternative network services provider XO Holdings (news, filings) reported earnings after the bell, finally drawing a close to 2008 with their habitual last minute filing.  Revenue grew sequentially to $375.2M and EBITDA of $34.4M was reasonably solid.  The company therefore met its annual EBITDA guidance easily and exceeded the top end of its revenue guidance range by $5M.  That doesn’t mean XO is burning up the tracks – its annual revenue growth of 3.4% for 2008 remains weak compared to the field.  Yet given the financial crisis we can say that the company’s operations don’t seem to be showing the strain that its shareholders [Read more →]

Metro fiber specialist abvt did something today that they haven’t done since imploding spectacularly way back in 2001.  They reported fourth quarter and full year 2008 earnings on time!  What’s more, they promised to hold earnings conference calls starting with the first quarter results, and will apply for a listing of their common stock on a national exchange.  I have given them grief about it several times since starting this blog, so congratulations are in order for CEO Bill LaPerch and his team.  Many thought they would never come out of that cocoon.  [Read more →]

Today Cisco Systems (NASDAQ:CSCO, news, filings) unveiled its Unified Computing System, amidst great fanfare and of course an amazing blast of marketing material.  Not content to merely release the new product, they included partnerships with VMWare, Accenture, BMC, EMC, and Red Hat.  One would think they might want to space out the news, we’re talking information overload here.  After you get past all the buzzwords, what exactly is [Read more →]

A few details for regular readers.   First, my twitter feed was down for about a week, but is back up now.  Why was it down?  I have no idea, if I had to guess it would be that Twitter’s automated and poorly aimed anti-spam nets somehow snagged me.  I emailed them and after waiting patiently for 5 days they turned it back on without ever acknowledging me in any way.  Secondly, some of you may have noticed the Facebook Connect item that started in the sidebar and now sits next to the comment form. [Read more →]

Last week I published an update to my metro fiber and lit buildings list.  Today I will begin looking at the collected data and try to make sense out of it.  First though, I have switched the raw list to alphabetical order after several requests.  I was getting a bit ahead of myself, ordering by ‘route miles per building’ was for this post.  What I have learned from this metric is not who is the best or most successful in metro fiber, it’s not a race.  Well, each business is in its own competition of course, but in this case it is usually against the ILEC more than anyone else on the list.  Rather, what one sees quickly when ordering by this metric is [Read more →]

Late last week, Google let the world know what it has done with GrandCentral, the voip company they bought over a year and a half ago.  The upgraded service, Google Voice, is designed to fit inside the world of GMail and Google Docs, and looks really slick.  Or at least the marketing package looks really slick, so far the service is only available as an upgrade for existing GrandCentral users.  The rest of us just get to watch for now.  The blogosphere is of course boiling over about it, and I don’t blame them – this is the first really [Read more →]

Level 3 Communications (NYSE:LVLT, news, filings) has been pretty quiet lately, but managed to announce a few wins this week.  The first came from their Business Markets group.  MDI Holdings selected Level3 for direct connections between its main locations: two in Florida, two in California, and one in Texas.  The multi-year contract includes voice and data services over an IPVPN.   MDI specializes in health care management, i.e. appointments, claims processing and payment, etc.   The Business Markets group has had some trouble over the last year finding a path to growth, but it does seem to have some traction [Read more →]