Tuesday, March 1, 2005

Deutsche Telekom Reports 2004 Income of EUR 4.6 billion

Deutsche Telekom reported 2004 net income of EUR 4.6 billion, achieving its goal of continued profitable growth. Net revenue increased by 3.7 percent to EUR 57.9 billion in 2004 compared with EUR 55.8 billion in 2003.

Some highlights of the annual report:

  • Free cash flow increased from EUR 8.3 billion to EUR 10.2 billion

  • Net debt reduced by EUR 11.4 billion to EUR 35.2 billion. This was achieved primarily due to free cash flow and the sale of investments, such as the sale of a share in the Russian mobile communications company MTS.

  • Total employee headcount was 247,559, compared with 251,263 a year earlier.

  • DT's 2005 outlook calls for adjusted EBITDA to be between EUR 20.7 billion and EUR 21.0 billion


Dust Networks Offers 802.15.4 Solution

Dust Networks, a start-up based in Berkeley, California, announced the addition of IEEE 802.15.4 compliant radio hardware to its SmartMesh wireless sensor networking product line. The new standards-compliant hardware operates in the 2.4GHz ISM band and can be certified for use in all of the world's major markets. Dust Networks will continue to offer SmartMesh networks based on 900 MHz hardware in the North American market.

The IEEE 802.15.4 standard, which was ratified in May 2003, was created to enable wireless communications for a wide range of applications. Dust Networks uses 802.15.4 radio hardware to deliver standards-based enterprise- class wireless monitoring and control applications for the building automation, industrial automation, and security markets.

Siemens and Nortel to Support BT's Global Client Voice Infrastructure

BT is working with Siemens Communications and Nortel to provide equipment, maintenance and support services for the voice systems and infrastructure used by BT's multi-national customers.

BT is responsible for the management and maintenance of a diverse range of PBX equipment and other customer voice systems in over 120 countries. BT's network of global and regional operation centres already provides multi-national customers with service management on a country-by-country basis. In conjunction with Siemens Communications and Nortel, BT will now offer increased global reach to help customers optimize their expenditure on voice infrastructure, and to prepare them for migration to IP Telephony and VoIP platforms.

Siemens will assist BT in providing maintenance and support for multi- vendor environments all around the world - leveraging its 60,000-employees across 150 countries. This local management of global relationships will help to simplify and accelerate the delivery of both ongoing maintenance and key client programmes - such as the convergence of communications systems.

Nortel has a 13 year history of working with BT in Europe to provide business-critical ICT solutions that help to secure, protect and power the operations of some of the world's largest, most demanding global organizations.

Global Broadband Surpasses 150 Million Subscriber Mark

The number of broadband subscribers worldwide has just passed 150 million mark, according to IMS Research. This represents an increase of 51 million since the beginning of 2004. IMS Research is forecasting that the number of broadband subscribers will surpass 400 million during 2009.

DSL continues to put distance between itself and cable as the most popular broadband technology, with total DSL subscribers passing the 100 million mark in early 2005.

Telecom Execs Testify in Favor of Big Mergers

In testimony before the U.S. House Committee on Energy and Commerce, the chief executives of AT&T, MCI, Nextel, SBC, Sprint and Verizon each said the mega-mergers currently planned their firms would be good for the industry and good for the national economy.

The committee's chairman, U.S. Rep. Joe Barton (R-TX), pretty much consented, noting that "with an industry that has changed so much in ten years, it should come as little surprise that companies are looking at one another to determine whether partnerships will enable them to be stronger competitors in the new digital world. The combination of Sprint and Nextel will create a broadband giant in the wireless industry that has no affiliation with the Bells. We should not be wary of such a combined entity; we should welcome it. And the once "unthinkable" merger of AT&T and SBC is now very realistic.... The United States needs to have a vibrant communications industry with strong national players. "

Congressman Fred Upton (R-MI), echoed similar thoughts: "These companies will be better positioned -- combined rather than separate -- to do battle in a world where the meaningful fight will be amongst inter-modal competitors -- as they aggressively seek to win the hand of residential, business, and governmental consumers in the offering of a suite of IP-enabled voice, data, and video services. Given the dramatic changes in the communications marketplace over the last 10 years, these mergers are not only logical, but they are integral to ensuring a vibrant and inter-modally competitive communications marketplace. I consider these mergers a necessary tune-up for the telecommunications industry, ensuring that the country's economic engine is geared up to compete globally."

Several lawmakers questions whether the mega-mergers would lead to less competition and higher consumer prices. The industry execs argued that inter-modal competition is growing stronger.

Invited witnesses included Edward E. Whitacre Jr., Chairman and CEO of SBC Communications; David Dorman, Chairman and CEO of AT&T; Ivan G. Seidenberg, Chairman and CEO of Verizon; Michael D. Capellas, President and CEO of MCI; Gary Forsee, Chairman & CEO of Sprint; Timothy Donahue, President and CEO of Nextel Communications; Dr. Mark Cooper, Director of Research at the Consumer Federation of America; Jeffrey Halpern, Senior Equity Research Analyst at Sanford C. Bernstein & Co.; Jim Speta, Associate Professor at Northwestern University School of Law; and Phil Weiser, Associate Professor of Law and Telecommunications at the University of Colorado School of Law.
  • Last month, senior executives from Alcatel, Lucent, Motorola, Siemens and QUALCOMM testified before the House Energy and Commerce Committee's Subcommittee on Telecommunications and the Internet on "How IP-Enabled Services are Changing the Face of Communications." A common theme of the testimony was that Congress should legislate a "light regulatory touch" when addressing IP-enabled services. The witnesses addressed the digital television (DTV) transition and advocated a "hard deadline" for the transition in order to reclaim the analog broadcast spectrum. They urged Congress to make this spectrum available as soon as possible to stimulate the economy.

  • The U.S. House Energy and Commerce Subcommittee on Telecommunications and the Internet is expected to hold four hearings this Spring on updating The Telecommunications Act of 1996. A new bill on telecom regulation is expected to be introduced following the four hearings by key committee members and it could be brought to the House floor for a vote by summer.

Alcatel to acquire Native Networks for Optical Ethernet Transport

Alcatel agreed to acquire Native Networks for approximately US$55 million in cash. The companies have been jointly developing Ethernet Packet Ring technology since 2003.

Native Networks provides data-aware, Metro Ethernet plus SDH/SONET transport solutions designed for deployment in "first-mile" metro access infrastructure. Its switches transport and aggregate Metro Ethernet packets alongside legacy circuits/TDM services in their "Native" form over dark fiber, existing SDH/SONET infrastructure or DWDM.

Native Networks supports advanced layer-2 Metro Ethernet services such as Virtual Private LAN Service (VPLS). The equipment leverages an advanced, patent-pending multiplexing scheme and unique traffic management technology to provide optimal use of optical or SDH/SONET infrastructure with guaranteed QoS per customer and the ability to engineer to strict SLAs.

Alcatel said the Ethernet Packet Ring Technology developed with Native Networks allows operators to introduce enhanced Ethernet features through a simple add-on engine to existing Alcatel optical multi-service networks or equip as needed in new installations. As a result, it optimizes the network's performance by aggregating multiple services such as triple play, DSL, 3G mobile and Ethernet Virtual Private Networks services, over an integrated optical data infrastructure.

Native was founded in 1999 and is based in Maidenhead, U.K. and retains extensive research and development facilities in Petah Tikva, Israel.

Recent Acquisitions by Alcatel


Optical Ethernet

US$55 million in cash

Mar 05
appliances that provide Internet access, email and Web applications

not disclosed

Nov 04
multi-standard mobile softswitch
million in stock

Sep 04
eDial SIP-based
platform and applications for conferencing of voice, data and video
million in stock and cash

Sep 04
Gateway Support Node

not disclosed

Jan 04
  • In February 2003, Alcatel announced a partnership with Native Networks under which it is leveraging Native Networks' Metro Ethernet technology to introduce enhanced transport and aggregation of Ethernet, Fast Ethernet, and Gigabit Ethernet services, along with Packet Ring functionality, for its Optical Multi-Service Nodes (OMSN) equipment. The companies said these new, managed Ethernet features could be introduced incrementally through an add-on card to existing OMSN networks, or equipped as needed in new installations.

  • In July 2003, Native Networks raised $11.5 million in third round funding for its metro Ethernet over SONET/SDH solutions. The company's platforms can transport and aggregate Metro Ethernet packets alongside legacy circuits/TDM services in their “native�? form over existing optical networks. The equipment can support Layer-2 Metro Ethernet services such as Virtual Private LAN Service (VPLS). The funding round was led by Infinity and JVP. Other existing investors taking part in the round were Alta Berkeley Venture Partners, Anschutz Investment Company, Apax Partners, Delta Capital Investments, Israel Seed Partners, SkyPoint Capital Corporation, and Soros Private Equity Partners. At the time, Native Networks' total funding stood at $39.5 million.

NeoPhotonics Acquires Stake in China's Largest Optical Supplier

NeoPhotonics, a developer and manufacturer of PLC-based (planar lightwave circuit) integrated optical modules and subsystems , has become the largest shareholder in Photon Technology Co., (Shenzhen) following the acquisition of all of the formerly state-owned, shares, or approximately one-third of all outstanding shares, for consideration of cash and stock. Terms were not disclosed.

Founded in 1993 as a majority state-owned enterprise, Photon has become China's largest manufacturer of "active" optical components for broadband access and backbone optical networks. Products include a vertically integrated line of cost effective component and subsystem solutions, from active component diodes and subassemblies through modules, subsystems and broadband equipment.

The companies said their merger would create "the broadest and deepest optical component capability in the industry today, with advanced solutions that combine active and passive components into products and modules." Specifically, the two companies combine next generation passive PLC technology with high volume laser and transceiver manufacturing capability.

Numerous new product collaborations already are underway, including the integration of active lasers with passive filtering and alignment on a PLC substrate for low cost triplexers for FTTP, as well as transceiver modules and integrated ROADMs.

Intel Founder Gordon Moore to Receive Marconi Lifetime Achievement Award

Gordon E. Moore, who in 1968 co-founded Intel, has been named the Marconi Society's 2005 Lifetime Achievement recipient. Moore is widely known for his 1965 prediction which stated that the number of transistors the industry would be able to place on an integrated circuit would double every year. In 1975, the timeline was updated to once every couple of years.

Gordon Moore is the third person to receive the Marconi Society's Lifetime Achievement Award during the organization's 31-year history. In 2000, the award was presented to mathematician Claude E. Shannon, the founder of modern information theory who invented the concept of the bit, and in 2003, to William O. Baker, who, as director of research and later president of Bell Laboratories, oversaw the development of a wide array of technologies that earned its researchers eleven Nobel Prizes during his tenure at the helm.

The Marconi Society (formerly, the Marconi Foundation) is named for 1909 Nobel Prize winner Guglielmo Marconi, whose early experiments with Hertzian waves led to the wireless revolution of the 20th century. http://www.marconifoundation.org

Sweden's Citylink Selects Juniper's J-series Router

Citylink, the fifth largest Swedish alternative operator providing business services, is upgrading its customer premises equipment with the Juniper Networks J-Series Services Router. Working with local channel partner, Imtech Sweden, the upgrade will enable Citylink to deliver premium managed IP services, including voice, video and VPNs with QoS from the core of the network to the customer premise.

Citylink's core IP/MPLS network was built using Juniper Networks M-Series routing platforms in early 2003. The J-Series uses the same modular JUNOS operating system as the network's core. Financial terms were not disclosed.

Citylink was founded in 2001 by Industrikapital and six local energy companies.

Ericsson Tightens Employee Stock Option Program

The Board of Ericsson has, after discussions with major shareholders, decided to increase the upper threshold of the performance target in the Performance Matching Program for senior managers. The change means that maximum matching shares will be allocated if the average annual growth of Earnings Per Share (EPS) between July 1, 2005 and June 30, 2008 is at or above 15 percent, instead of 12 percent as previously proposed.

Ericsson's Long Term Incentive Plan 2005 has 3 parts:

1. The Stock Purchase Plan for all employees, under which participants invest in Ericsson shares during a 12 months period and after three years of holding are matched with one share for each one purchased (1+1).

2. The Key Contributor Program for up to 5,000 key contributors (approximately 10 percent of the total number of Ericsson employees), under which selected participants in the Stock Purchase Plan receive one extra matching share for each one purchased, totally two matching shares (1 + 1 + 1).

3. The Performance Matching Program for up to 220 senior managers, under which up to 170 selected senior managers can receive up to four extra matching shares for each one purchased (1 + 1 + 0-4), and up to 50 top senior managers up to six extra matching shares (1 + 1 + 0-6), totally up to five or seven matching shares, depending on the outcome of the performance target.

ZigBee Alliance Expands Activities

The ZigBee Alliance, an industry group promoting low-cost, low-power wireless networks based on the ZigBee specification, announced a new level of membership, the Adopter Class, designed for companies looking to quickly and cost-effectively bring ZigBee-based products to market.

The Alliance is looking to expand its activities following the ratification of the final ZigBee specification in December 2004.

Adopter Class membership provides companies access to all final, approved ZigBee specifications. As these members develop, deliver and receive certification for their ZigBee products, they can use the ZigBee logo and marketing collateral to promote them. In addition, Adopter Class members will be able to attend interoperability events and ZigBee Alliance-sponsored workshops and developer conferences.

More than 27 companies are expected to demonstrate 802.15.4 and ZigBee-ready products at the Alliance's upcoming meeting in San Francisco. These companies include: Airbee, Atmel, Cirronet, Chipcon, Crossbow, CompXs, Daintree Networks, Dust Networks, Ember, EnOcean, Figure 8 Wireless, Freescale, Frontline Test Equipment, Helicomm, Integration Associates, Jennic Inc., Korwin, Luxoft, Microchip, Nanotron, OKI, Renesas, Sensicast, Silicon Laboratories, Software Technologies Group, UBEC, and ZMD. http://www.zigbee.org

Heliocomm Debuts ZigBee Modules

Helicomm, a start-up based in Carslbad, California, announced its 8051-based IP-Link Embedded Wireless Module Family. Each module includes an IEEE 802.15.4 radio, a Silicon Laboratories 8051 microcontroller, programmable digital and analog I/O, flexible antenna solutions and choice of ZigBee or IP-Net networking software.

IP-Link Modules are available in both 2.4GHz and 915MHz frequencies, with three choices of FlashROM/RAM combinations.