Telecom Ramblings

Back in early may, I posted my Level 3 spreadsheet.  It is a detailed model that allows study of trends within Level 3’s business groups and the effects on margins, ebitda, and cashflow.  Well, Q2 ends on Monday, which means that it is prediction time prior to the earnings call in 3-4 weeks.  And in preparation for that event, I am posting the latest version of my model. [Read more →]

Last week, Infinera cut its forecasts for the second half, blaming delayed buildouts by North American carriers.  At the time, I suggested that it was likely cutbacks in spending by Level 3 and XO.  This was an obvious statement of course, given that these two are perhaps the largest of Infinera’s North American customers.  However, subsequent events have pointed the finger primarily at XO.  First, [Read more →]

A commenter asked me about the product Magic Jack, so I did a little looking.  Essentially it is a USB dongle, you plug one end into your computer, and then plug a phone into the other and bingo it works.  You get your own phone number – no local number portability just yet, but they say it is coming.  So what is novel about this solution?  [Read more →]

The IP world now has another Tier-1 network.  Renesys reports that Cogent (CCOI) and AOL have finally kissed and made up, 6 years after they fought a peering war that Cogent lost – perhaps the last one they did lose outright.  Since then, Cogent had been buying transit from NTT/Verio to get to AOL.  But not anymore, the hatchet has been buried and the peace pipe has been smoked. [Read more →]

T-Mobile rolled out a VoIP play yesterday, and the world yawned. They’ll be competing against cable voip and vonage, but from a wireless bundle angle – in order to get the very inexpensive $10/month voip package you have to be a wireless customer, plus you have to buy their router. But VoIP is dead if you’re not a cable company right? Well maybe yes, maybe no, but I don’t think VoIP is the end-all of this deal.  It goes to T-Mobile’s USA strategy and the rollout of their 4G network next year, and this VoIP play is a risk-free sideline. [Read more →]

In the past few posts, I’ve tried to offer a very simplified explanation for the two main paths to 100G and beyond along with the advantages and disadvantages of each.  In the optical industry, there is a bias toward the pure 100G wavelength solution.  One can see it in discussions of 4x10G products, with some saying that isn’t *real* 40G – and similar are made when 100G via bandwidth aggregation is discussed.  [Read more →]

Last time we looked at pure 100G wavelengths, now let’s look at bandwidth aggregation.  In order to reach 100G why not take ten 10G connections, bundle them together, and put it in a nice package so that nobody can tell.  If it takes 100G as input and gives 100G as output without losing anything and does it cheaply, isn’t that good enough?  [Read more →]

Following up on my previous post, let’s take a look at the pure 100G wavelength option.  Right now they can do pure 40G waves and they think they can use what they learned getting to 40G to get to 100G on a single wavelength.  From a network design point of view, this is quite desirable because everything new is inside the black box, all you have to do is buy the new black boxes.  [Read more →]

In a response to my exaflood post a regular commenter, Frank Coluccio, brought up a subject that I had skirted over but which deserves discussion.  Specifically, he mentioned  that the way in which we reach for 100G+ matters a great deal, and is currently in dispute.  This is a difficult subject to talk about without descending into the netherworld of technical acronyms never to return, but I’m going to try anyway. [Read more →]

Well, now it is starting to make sense.  When they participated in the Clearwire deal, it seems that Comcast extracted some spectrum for Wimax femtocells.  Femtocells are like little wireless cells in your home instead of on the tower nearby, and they only cover your house.  Sound like anything you might use now?  Yes, to me such a device would seem to replace the wireless router many people now use for home networking.  Technical differences don’t matter here, Comcast can do what they did with VoIP – bundle it and call it digital phone so nobody is scared off.  [Read more →]

Earlier this month, C&W made a hostile bid for THUS valuing the company at just under $600M including net debt, and while THUS rejected it C&W are forging ahead anyway.  For those unaware, THUS is a UK network provider that does about $1B in annual revenues and has about 100M in ebitda while still burning some cash but not as much as it used to.  Give or take a bit of course.  Today reports emerged [Read more →]

According to Contentinople, MLB’s Bowman expects events like the Tiger Woods/Rocco Mediate playoff last week to go from 600K concurrent streams to 10M in just 2 years.  Wow, now that would be some major growth, 300% per year will get you there.  Sports streaming is probably going to be one of the first places we see impressive bandwidth growth come from, just because it is such an easy thing to set up in comparison to other systems. [Read more →]

According to IDC, 51% of telecom execs say bandwidth will break Internet, which apparently proves that ‘bandwidth is not infinite’.  Who might have made that claim is not clear, because of course nobody has.  Of course, it’s not just IDC, this is all over the media these days.  But what do they mean by ‘break’? [Read more →]

Suppose the core backbones are growing at 60% a year.  If 10G pipes became ‘too small’ to manage current backbones in 2007, then when does 40G become too small?  Math says in just 2 years, in 2010 (can you say AT&T?).  Any guesses how many years it takes to make 100G too small?  Only 2 years later in 2012 those 100G circuits we don’t even have yet won’t be enough any more.  And how about the fabled Terabit (Tbps?)  [Read more →]

We hear so much about the open source movement, and it has so much to do with how the internet is evolving right now that it is hard to miss.  But what does it mean to the people that actually push the bits?  I’m a bit in both worlds, and that question stumped me at first.   Sun’s Scott McNealy spent a good part of his keynote at NXTcomm08 telling telecom service providers that open source is absolutely key to their future.  [Read more →]

In a month it will be two years since TW Telecom announced it was buying Xspedius, expanding its markets dramatically.  For all practical purposes, they must be done with the integration and I’ve been expecting them to make a followup move for a while now.  There has been speculation that they might be a target, e.g. of Level 3, but the strategic situation seems to favor [Read more →]

Several weeks ago, I took a look at the various metro fiber companies for which I could find data.  Well, it took some time, some nosing around, and some estimation, but I have what I consider my final list.  For now anyway, I will update over time I’m sure, and who knows, new information may come to light. I estimated Zayo’s metro route miles based on their acquisitions plus some rough estimations, I don’t think I’m far off.  The rest I either found a direct reference to or, in one or two cases, actually counted the dots on their public maps. [Read more →]

We’ve had a very fruitful running conversation about traffic growth and the wholesale IP transit market amongst Ike at Telecosm and Dan at BearOnBusiness.  Today Ike has an excellent post about why the IP transit market is what it is today, and how owning the fiber itself is going to matter more as growth continues.  Personally, I think that there will always be some room for the [Read more →]

Twin press releases came out from Infinera yesterday, first came the bad news and then came the good news (and they didn’t even ask which we wanted first!) [Read more →]

Yesterday, the Denver Business Journal speculated that Level 3 may try to acquire TW Telecom.    Now, strategically, this combination has always made sense.  Amongst competitive telecoms, Level 3 has the premier backbone assets whereas TW Telecom has the premier metro assets.  Combined, the companies would be a force to reckon with even by the RBOCs, 17,000 on-net buildings in almost [Read more →]

On Saturday I looked at Internap as a proxy for the health and growth of the wholesale IP transit market, and within that framework.  Today I’m going to mention a few reasons why neither is such a great measurement for bandwidth growth as a whole. [Read more →]

Ike Elliott and Dan Caruso have been going back and forth on whether there has been a resurgence in IP traffic and revenue from it over the past couple years.  First Ike challenged the idea that growth is happening by looking at Level 3’s IP/Data revenues and their total lack of movement in 2007, but Level3’s numbers include other stuff that makes it hard to read.  Dan then offered Cogent’s growth as an example, but Cogent’s numbers are skewed by their pricing strategy.  They grew revenue for the last few years at a fixed price, having forward-priced the market.  Those chickens came home to roost recently with slower traffic growth at Cogent, leading to pricing changes there – but as a proxy for industry trends, Cogent is hard to use because their pricing only changes every few years but then all at once.  Ok, so why am I rehashing this?

[Read more →]

In a post last month about XO, I asked what Carl Icahn wants , given that he has been negotiating with himself over the future of the company.  Well, yesterday what was already a bad situation got worse – Icahn may own a majority of the bonds, preferred, and common stock, but he doesn’t own it all and the other shareholders are pissed.  [Read more →]