Telecom Ramblings

There is an article on Seeking Alpha today Three Stocks Selling Below Cash With Little Debt of which one is telecom equipment provider Ciena (NASDAQ:CIEN, news, filings).  The argument goes that Ciena’s pile of cash and marketable securities (over $1B) is substantially higher than its current marketcap, and since the company is profitable and has a P/E of 7, they’re cheap cheap cheap.

And they are, but of course, they aren’t the only ones.  If I had a nickel for every undervalued company in this sector, I could buy probably one of them. That said, it should be noted that Ciena’s P/E may be 7 now, but everyone who follows them at all knows that number will be rising [Read more →]

If you’re in the USA you probably think that title has a typo, but AAPT is the #3 telecom in Australia, and a subsidiary of Telecom New Zealand.  The company runs a network having some 89 PoPs in Australia and has capacity on various cables from there to the world.  According to various reports Pacnet has bid some $420M for it, although it remains unclear just how solid the basis is for those reports. [Read more →]

Internetnews.com has a fascinating article about NASA’s implementation of the internet in space.  It never really occurred to me before, but with many vessels and satellites out there sending or relaying data and the many earth locations receiving and processing it, obviously NASA has its own uses for networking.  But out in space where the distances are, well, astronomical, and the lag times are measured in minutes and hours, it turns out that TCP/IP just doesn’t get the job done.  The handshakes are too frequent, the conversations between routers and endpoints are too ‘chatty’. [Read more →]

A survey commissioned by Verizon says that 57% of people are planning to watch TV rather than go out for entertainment. Of course this is a natural response to the ongoing economic disaster, but Verizon thinks it will be a boon to its FIOS revenues with all the on-demand video and such. They’re probably right about that, but I think the corollary is that bandwidth growth should be robust. [Read more →]

Well, they finally did it.  The long engagement between Clearwire (CLWR) and Sprint’s Xohm has finally ended in a wedding.  In a release on Friday the two announced that the vows have been taken, the bride has been kissed, and wedding presents from Intel, Time Warner Cable, Comcast, and Google in the amount of $3.2B are already being unwrapped.  It was a bit earlier than expected, but after the FCC and Clearwire shareholders approved earlier this month it was just a matter of taking care of loose ends. [Read more →]

TelephonyOnline has a nice article about CenturyTel’s acquisition of Embarq.  The gist of it is that Embarq (EQ) turned down a higher offer to take the CenturyTel (CTL) deal, the reason being that it was the better deal in the long term.  That’s not that uncommon, I recall that MCI turned down a higher offer from Qwest (Q) to go with Verizon (VZ).  In this case, the competing offer was at one time partly cash, and Embarq replied it was only interested in all-stock deals.

I hadn’t really thought about it that way.  It seems as if cash is king most of the time, after all it’s harder for big shareholders to dispose of a big stock position – they have to want to hold it.  And I guess that’s the point right now.  Embarq’s shareholders don’t want to sell out for cash at these prices, their shareholders still want to have chips [Read more →]

Yesterday was, of course, the day before Thanksgiving, which is notorious for being a day when companies release things they’d actually rather not talk about much. It was no different this year in telecom and data, let’s look at the news and try not to cringe.

Qwest may have finally settled its shareholder lawsuit from the bubble days. Late Wednesday they announced that a $445M deal was approved by a federal judge in Denver. They thought they settled this a few times already, but appeals from former CEO Joseph Nacchio kept it up in the air. Everyone seems to be happy now, but I don’t blame [Read more →]

Yes, ToIP. Turkey over IP. Maybe even a TDN or something. Ok, I’m being silly, it’s just that I’m 10,000 miles away this Thanksgiving and I’m going to have to make do with substitutes for more things than I’d prefer. I’ll have to speak to the guy in charge of my location… Oh yeah, that’s me, oops. [Read more →]

In a press release today, European network operator Interoute Interoute (news) touted its use of Infinera (NASDAQ:INFN, news, filings) gear to turn up 60Gbps of bandwidth over a 1200km route in just 48 hours.  The rush job apparently, was to rescue a customer from a tough situation.  Now that’s very interesting, and I congratulate Interoute for its quick feet and Infinera for the performance of its gear – I have to admit, that’s fast!  But of course even more interesting to a guy like me is who [Read more →]

Have you ever seen those African wildlife specials where the dry season turns a watering hole into a puddle, leaving the last remaining denizens flopping around in increasingly thick mud waiting to be eaten? That’s something like what VoIP services provider Deltathree (DDDC) faces right now. The company refinanced its lease to free up some restricted cash to stay wet, but if the rain [Read more →]

Corporate debt ratings are wierd.  Today Moody’s called Level 3 Communications’s (LVLT) new debt deal a default and cut their ratings, following on similar S&P move last week.  As many have noted, this is by the book, it happens almost anytime a company tenders for its own debt below par – and certainly every time Level 3 has.  But that doesn’t mean it makes any sense at all.  Cogent bought back half its debt below par last month but it wasn’t in ‘default’ according Moody’s and S&P because, I assume, the company didn’t [Read more →]

On Friday, Sprint Nextel (NYSE:S, news, filings) announced that they have successfully implemented a 40G transatlantic IP connection between New York and Sweden.  That’s 40Gbps over a single wavelength on an existing submarine cable system, in this case over TAT-14 from SeaGirt, NJ to Blajberg, Denmark, not 4x10G or anything similar.  The link was established using [Read more →]

Various articles have been popping up out there suggesting that along with the incoming Obama presidency will come a substantial change in the regulatory winds around Telecom.  The Wall Street Journal yesterday went through a long list of Democrats in congress who have a historical interest in telecom regulation who will be ascending [Read more →]

Todd Underwood made his last post for Renesys the other day, with a perceptive yet dismal view of the wholesale bandwidth business – I recommend a read.  Wherever Todd winds up, I hope he finds a way to keep blogging, his voice on the subject of internet traffic has consistently been one of the best around. [Read more →]

DataCenterKnowledge has a nice article today summarizing the current market valuations of datacenter-related stocks. It is a shocking table that reminds us just how ugly things are out there. In the financial markets anyway… [Read more →]

Yesterday, Verizon announced its new content distribution strategy, using Velocix caching solutions and focusing on delivery to their own customers more so than the rest of the internet. And yet, the more I think about it, the more I think this is less about the CDN business than it is about the other elephant in the room: net neutrality. [Read more →]

They haven’t caused much of a stir, but glbc has really been on the march in South America.  It’s not for lack of trying though, the company has issued a dozen PRs since the beginning of the second quarter alone that relate to events in the region.  Today’s deal with Minera Chinalco in Peru is just the latest in a string of awards, deals, and facility expansions.  [Read more →]

According to Ryan Lawler over at Contentinople, Verizon is poised to enter the CDN game. But Verizon doesn’t seem to plan on following the paths taken by AT&T or Level 3, they seem to have an entirely different approach in a partnership with Velocix.  The idea is that Verizon wants to efficiently distribute content both internally and externally by leveraging [Read more →]

Amazon (AMZN) formally launched its CDN last night, called “Cloud Front“.  It’s HTTP only, is limited to those storing data on Amazon S3, has no SLA and fewer bells and whistles than any CDN has ever had.  And it’s revolutionary. [Read more →]

Juniper Networks (NASDAQ:JNPR, news, filings), Infinera (NASDAQ:INFN, news, filings), and Level 3 Communications (NYSE:LVLT, news, filings) announced today that they will work together towards the eventual development of highly anticipated 100 Gigabit Ethernet technology, along with research networks Internet2 and ESnet.  Of course, we already knew that each was working on their own part of this, so one might wonder why we needed a press release.  And given that the economy trumps everything right now, especially new technology that won’t be here until 2010 when the media expects us to be living in caves, nobody is likely to get that excited today. [Read more →]

Dupont Fabros (DFT), which builds and operates datacenters as a REIT, has suspended construction at both its NJ-1 (Piscataway NJ) and ACC-5 (Ashburn VA) sites.  This follows the news of three weeks ago that their Santa Clara project had been suspended.  The company had just raised $100M but had needed far more than that to continue in Santa Clara.  Well, apparently they need more to finish in New Jersey and Virginia as well, because this news effectively suspends their construction across the board. [Read more →]

Wow, while I was writing up my model, Level 3 dropped a bombshell.  The company announced commitments for $400M in debt from a group of holders ranging from top shareholders Southeast Asset Management and Fairfax on down to board members Walter Scott and Robert Julian.  Simultaneously, they issued tenders for their 2009 and 2010 convertible debt, currently trading at various discounts.  Where to start?  They totally surprised me, I expected the company wouldn’t make a move for a while yet.  Others did see signs recently that the company had a refinance in hand, congrats to them. [Read more →]

Here is my updated Level 3 Communications (LVLT) model with projections for Q4 and onward into 2009 and 2010.  As with recent spreadsheets, this one is stored on Google Documents. I have included a summary page for Q4 and full year 2008 projections, but if you really want to see the details or further projections then you can delve into to the other sheets. [Read more →]