Monday, October 24, 2005

BellSouth Adds 205,000 DSL Subscribers in Q3

BellSouth added 205,000 net DSL customers in Q3 2005 and now serves nearly 2.7 million DSL customers. Sequentially, DSL average revenue per user (ARPU) remained steady at nearly $40. For the third quarter, network data revenue, which includes revenue from DSL services, was $1.17 billion.

During Q3 2005, 66,000 BelSouth customers added DIRECTV service to their communications packages, reaching a total of more than 460,000.

As of Sept. 30, 2005, BellSouth's total access lines were 20.4 million, down 354,000 compared to June 30, 2005. The company estimates approximately 40,000 of this decline is attributable to disconnections associated with Hurricane Katrina. The remaining access line loss was driven by wireless substitution and cable telephony providers in residential markets. Residential retail access lines were down 181,000. In contrast, business retail access lines grew 37,000 lines with positive results in both small and large business segments. UNE-P (Unbundled Network Elements-Platform) access lines resold by BellSouth competitors were down 228,000 compared to June 30, 2005.

Alcatel Supplies SIP for BT

Alcatel is extending the functionality and capacity of the Alcatel 5020 Softswitch and the ACME Packet Session Director (SD) already in commercial operation in BT's network. As the overall SIP session control element and mediation device among multimedia application servers, the Alcatel 5020 Softswitch implements the call & session control function (CSCF). The ACME Packet SD provides a proxy function (P-CSCF) to satisfy critical security and quality assurance requirements for carrier class IP multimedia services.

Alcatel said this IMS-compliant expansion plays a part in enabling BT to host a complete set of advanced revenue-generating voice and multimedia services over a common, open and reusable architecture. The expansion will be "live" in the BT network by the fourth quarter 2005.

Ericsson to Acquire Marconi

Ericsson will acquire most of Marconi for approximately £1.2 billion (US$2 billion). The deal, which continues the trend of consolidation in the industry, gives Ericsson access to a more comprehensive
portfolio of solutions, an expanded R&D capability, and strategically important customer accounts worldwide.

The acquisition includes:

  • Marconi's optical networking business

  • Marconi's broadband and fixed radio access network business

  • Marconi's softswitch business

  • Marconi's data networking equipment and services businesses

  • Marconi's relevant telecommunications services activities

  • the Marconi trademark, associated brand names and IPR

Not included in the sale are Marconi's headquarters and certain businesses in UK and Germany, and Marconi's UK pension plan.

These assets represent about 75% of Marconi's turnover. Ericsson said the deal will contribute positively to EPS from 2007, and will have a neutral effect in 2006.

What then remains of Marconi will be renamed telent plc and will focus on providing services to telecommunications and enterprise customers. The new telent plc will be Ericsson's preferred services partner in the UK.

Carl-Henric Svanberg, President and CEO of Ericsson, said: "The
acquisition of the Marconi businesses has a compelling strategic
logic and is a robust financial case. As fixed and mobile services
converge, our customers will substantially benefit from this powerful combination."

The companies expect to close the transaction by the end of January 2006.
  • In April 2005, BT selected vendors for its 21st Century Network. Marconi, which had been a traditional supplier to BT, failed to capture any of the major contracts. In recent years, Marconi had generated about a quarter of its business from BT.

    BT selected Ericsson as the sole supplier for the I-node domain of 21CN, essentially the intelligence that controls the services.

TELECOM '05: Starz Says New Programming Parading Will Drive IPTV

Each wave of broadcasting technology has been driven by new programming paradigms and IPTV will be no exception, said Robert B. Clasen, President & CEO, Starz Entertainment. The introduction of broadcast TV in the 40s and 50s led to new programming formats and entertainment markedly different from radio or film; the rise of cable coincided with new networks such as CNN, HBO and ESPN; and the emergence of direct satellite providers similarly led to new channels, new networks and new sports programming packages. Clasen argues that IPTV will break the programming paradigm wide open again and that telcos should be ready to capitalize on this opportunity.

Starz would like to be a programming partner with IPTV providers. Today, cable and DBS providers look upon content developers are mere suppliers, said Clasen, and the business discussion always boils down to the price for carriage. Clasen argues that IPTV providers should use their platform to experiment with new formats and new ideas. They should try different channel bundles, and even a-la-carte channel subscriptions. They should also seek out new content for playback on a variety of devices, from big screen TVs, to laptops, PDAs and 3G phones.

Clasen also argued that IPTV will break the current programming paradigm in other fundamental ways. For instance, the concept of channels will radically change in an environment where must content may be watched via DVR or on-demand. Similarly, the notion of a 30-minute or 60-minute TV show becomes obsolete when fixed broadcasting time slots go away. Advertising will no longer follow the same rules. Starz is experimenting in these areas and Clasen urged IPTV providers to innovate in order to break into the market.

TELECOM '05: Hearst-Argyle TV on Why Telcos Need Local Broadcast Partners

Telcos and local broadcast stations are natural allies because of strategic regulatory and technology issues, said David J. Barrett, President & CEO, Hearst-Argyle Television, speaking at TELECOM '05 in Las Vegas.

Barrett, who was introduced at the keynote by Verizon CEO Ivan Seidenberg, said telcos and local broadcast stations are both facing regulatory challenges in the video distribution business. Telcos are fighting for a streamlined process of obtaining local franchises across the country. As analog broadcasting is phased out, local TV stations are hoping that they will be able to deliver multiple digital channels under the same must-carry rules as before. Both groups are up against the lobbying and market forces of the cable operators.

Barrett said that while cable networks were initially built on the backs of local TV stations, these same cable operators are now reluctant to carry additional digital content from the local community. Meanwhile, the telcos are pushing ahead with a switched video architecture that gives them the ability to carry a huge number of potential channels. Local TV stations already produce video programming of interest to the local community, and in times or emergencies, such as the recent hurricanes, provide a vital public information role. Barrett said for telcos to partner with local television partners would be good public policy and make good business sense.

TELECOM '05: SBC Says IPTV Will Be Cool

IPTV will become a "must have" consumer service reflecting our busy, digital lifestyles, said Lea Ann Champion, senior executive vice president of IP Operations and Services at SBC Communications, speaking at TELECOM '05 in Las Vegas. SBC's IPTV field trials in San Antonio went "really well," said Champion, and SBC now plans a limited market introduction this winter, followed by a gradual rollout in 2006. By mid-year, she expects the first feature upgrade for the service, which will be promoted under the "U-verse" brand. SBC initially will be serving four video streams to each subscribing household, including one for HDTV. She also said SBC would feature a robust VOD library from the get-go.

Champion said SBC's trial users simply "loved" the IPTV service. She contends the main market driver will be "a better TV experience," based on features like multiple picture viewing on single screen. For instance, sports fans might want to view and control several TV angles of a game, or consumers might want to have an electronic program guide or personal message center panel running alongside the TV show they are watching. She also predicts that IPTV will make for a better DVR experience by allowing users to program their home machine over the web, and by sharing resources with other TVs in the house.

Champion also confirmed that SBC is working to integrate its IPTV with Cingular Wireless. The goal is "not just a race to capture the digital house, but the digital lifestyle."

TELECOM '05: Cox Says Telcos Have A lot of Catching Up to Do

Telcos have a lot of catching up to do as they enter the market for triple play services, said Jim Robbins, President & CEO, Cox Communications, speaking at TELECOM '05 in Las Vegas. Cox introduced its first bundle of video, high-speed data and voice service back in 1997 in Orange County, California. The cable carriers also know how to integrate and sell advanced video services, including HDTV, DVRs and VOD. On the voice front, Cox recently launched its fourth VoIP market this year, giving it a total of 13 local markets served with voice (circuit-switched plus VoIP). In some areas, Cox's voice penetration already exceeds 40% of homes passed. Most importantly, said Robbins, Cox has figured out the critical issue of customer satisfaction, pointing to a recent J.D. Power and Associates award captured by Cox for the third year.

Robbins, who is retiring at the end of this year, poked fun at the telcos saying they always experiment with a new technology for decades before getting it right. Nevertheless, Robbins said Cox welcomes the new competition so long as the Bells agree to play on a level regulatory field. He cited the recent video franchise law in Texas, which was passed with forceful lobbying efforts, as an example where special concessions are granted to telco video providers while existing cable operators are forced to live with the old franchise rules. Robbins also said "predatory pricing" on broadband really helps no one.
  • Cox Communications is the third-largest U.S. cable television provider

Riverstone and PacketFront Deliver Active Ethernet

Riverstone Networks and PacketFront are partnering to provide carriers with an integrated, end-to-end Active Ethernet solution primarily targeted at European service providers.

The collaboration between the companies leverages the Riverstone 15008
Ethernet Edge Router in the metro edge and core and PacketFront's fully automated broadband solution including its ASR aggregation and access routers and "BECS" system software used for control and provisioning of network elements and triple play services.

The companies said the combined solution is intended to allow
carriers to more rapidly deploy open access FTTH networks based on best-of-breed products by eliminating the need for them to conduct interoperability trials between vendor platforms.

Juniper Acquires Acorn Packet for Gov't TDM-to-IP Solutions

Juniper Networks has acquired Acorn Packet Solutions, a developer of TDM-to-IP solutions for the Federal government, in a cash transaction valued at up to approximately $8.7 million. Acorn Packet Solutions develops products and technologies that natively connect legacy Time Division Multiplexing (TDM) and other circuit-based applications across IP networks. Acorn's technology includes an advanced clocking 'toolkit' that enables organizations to choose the appropriate method for the end-to-end timing of these critical circuits across an IP network. Circuit types are software configurable and operate at rates from 75bps to 12.288 Mbps.

Revenue for Acorn Packet Solutions was less than $1M in fiscal 2004 and the impact of this acquisition is expected to be neutral to Juniper earnings per share in the fourth quarter of 2005. The acquisition closed on October 20, 2005.

Initially targeted at the U.S. Federal market, these solutions enable customers to protect their investments in legacy network technology, such as TDM and serial encryption, while providing a smooth migration path to more flexible and cost-effective IP networks.

Juniper said the acquisition would enhance its solutions for Federal customers as it continues to advance its strategy to secure and assure the delivery and performance of applications over an IP network through best-in-class traffic processing.

Acorn Packet Solutions was founded in 2002 and is headquartered in Frederick, Maryland.

Sprint Nextel Selects Calix/Nortel for Broadband Access

Sprint Nextel has selected Nortel as a supplier of its next generation broadband access solution slated for local market deployments in 18 U.S. states.

Under terms of a two-year contract, Nortel's multiservice Ultra Broadband access platform, the Calix C7, has been standardized by Sprint Nextel for deployment in their local markets. The solution has already been deployed in Sprint Nextel's Waterville, Ohio local market.

Nortel entered into a strategic alliance to resell the Calix platform in 2004.

The Calix C7 will be deployed in the local network, with each platform supporting as many as 480 DSL or 1,280 Broadband Passive Optical Network (BPON) connections to residential and business customers.
  • Sprint Nextel has begun the process of separating the operations of Sprint's local telecommunications business, including consumer, business and wholesale operations, and will seek regulatory approvals to spin off the local telecommunications business to Sprint Nextel shareholders in a tax-free transaction, which is expected to be completed in 2006. The local telecommunications business, led by Daniel Hesse, chief executive officer - designate, will have its own management team and board of directors, consisting of an equal number of designees from Sprint and Nextel. The local telecommunications business, which has approximately 7.5 million local access lines in 18 states and as of June 30, 2005 had revenues of more than $6 billion during the prior 12 months, will be the largest independent local telecommunications company in the United States. It will have commercial operating relationships with Sprint Nextel for mobile and long-distance network services, and will receive certain transitional services, including corporate support functions. Its corporate headquarters will be in the Kansas City metropolitan area.

  • More than one million Calix C7 ports are now in service with carrier networks across North America.

Verizon Labs Re-Certifies Fujitsu FLASHWAVE 4000

Verizon Laboratories has re-certified Fujitsu Network Communications' FLASHWAVE 4100 optical access platform and FLASHWAVE 4500 core transport platform. Both platforms were originally certified by Verizon Laboratories in January 2003 when Fujitsu was named Verizon's first Testing Partner. This latest certification for the FLASHWAVE 4100 and FLASHWAVE 4500 Multiservice Provisioning Platforms (MSPPs) demonstrates that subsequent releases continue to meet Verizon's expectations for well-tested products for deployment in the Verizon network.

Ciena ONLINE Metro Qualified by IBM

Ciena's Metro Multiservice DWDM Platform has completed interoperability testing and qualification for IBM GDPS eServer zSeries mainframe environments.

IBM's GDPS computing environment provides a set of disaster recovery and continuous availability solutions ideal for large multi-site enterprises. The combination of IBM's GDPS technology with Ciena's metro optical DWDM systems connects local storage and server networks that are separated by distances of up to 300 kilometers for high-availability business continuity and disaster recovery applications.

Ciena's GDPS-certified solution has already been selected by a $60 billion life insurance company to enable the connection of data centers across 100 kilometers of fiber for the transport of GDPS and other data center applications.

Tellabs Reports Q3 Revenue of $464 Million, up 15%

Tellabs posted Q3 revenue of $464 million, up 63% from $284
million in the third quarter of 2004. Compared with the combined third-quarter 2004 revenues of Tellabs and AFC, Tellabs' third-quarter 2005 revenue increased 15% year-over-year. Tellabs earned $42 million or 9 cents per share in the third quarter of 2005 on a GAAP basis. Some highlights from the quarter:

  • Transport - Revenue from transport systems totaled $151 million, up 8% from $140 million in the third quarter of 2004.

  • Access - Revenue from access products totaled $166 million, up 38% from AFC's $120 million in the third quarter of 2004. [Note: The access revenue category includes all products acquired through the acquisition of AFC.]

  • Managed Access - Revenue from managed access systems was $84 million, up 16% from $73 million in the third quarter of 2004.

  • Broadband Data - Revenue from broadband data products was $14 million, up 65% from $8 million in the third quarter of 2004.

  • Voice Quality Enhancement - Revenue from voice-quality enhancement and
    other systems totaled $5 million, down 73% from $19 million in the third
    quarter of 2004.

  • Services - Services revenue was $44 million, about flat with $45 million in the third quarter of 2004

Versatel Deploys Net Insight for Live Sports Coverage

Versatel, a leading European telecom operator together with NOB, a Dutch broadcasting facilities company,have deployed Net Insight's Nimbra platform to connect all major Dutch football arenas for live sports coverage. The network collects services from a total of 18 football stadiums and carries the feeds to NOB's Master Control Room in Hilversum.

Toshiba Adds Video to IP PBX Systems

Toshiba America Information Systems has added Video Communications Solution (VCS) for its Strata CIX IP business communication systems.
Toshiba's VCS will initially provide point-to-point (P2P) video communications and collaboration (desktop and applications sharing) capabilities. The video capabilities are integrated with Strata CIX systems and pre-installed when shipped with the Media Application Server. USB handsets and cameras are required.

Disney CEO to Keynote TELCOMMNEXT in March

Robert Iger, President and CEO of the Walt Disney Company, will be a keynote speaker at the TELCOMMNEXT show in March 2006. Conference organizers said the selection the convergence of content providers with telecommunications.

Recently, Disney signed an agreement with Verizon to carry 12 Disney and ESPN networks over Verizon FIOS TV's system. In a separate deal, Disney and ABC Television agreed to sell current and past season episodes of ABC and Disney Channel television shows for download on Apple's iTunes Music Store.

TelecomNEXT will be held at the Mandalay Bay Resort and Convention Center in Las Vegas, Nevada, March 19-23, 2006.

BellSouth Offers pre-WiMAX in New Orleans

BellSouth launched a pre-WiMAX Wireless Broadband Service to small businesses in New Orleans. The number of subscribers and coverage area is limited, but BellSouth said the rollout would help small businesses rebuild their infrastructure quickly.

Small businesses who operate in the service area can sign up for Wireless Broadband Service for $69.95 per month.
  • In August, BellSouth began offering its pre-WiMAX FastAccess Internet Service in Athens, Georgia.

InfiniRoute's VoIP Direct Enables Peering to Emerging Markets

InfiniRoute Networks introduced a "VoIP Direct" managed VoIP peering service that PSTN-quality connections to carriers in emerging global markets, including such high-growth regions as Latin America, Asia Pacific, and Eastern Europe. The service enables "virtual bilateral" interconnections via a VoIP peering network that are equivalent to existing one-to-one bilateral agreements.

InfiniRoute VoIP Direct provides transparent VoIP peering via a single aggregated connection that establishes a VoIP peering community and facilitates direct interconnections to high-growth traffic regions worldwide. The direct connection reduces the number of call handoffs and improves quality compared with other peering and 'gray route' providers, which hand off calls across multiple networks. InfiniRoute leverages its own Routing and VoIP Optimization Engines, which continually monitor latency and traffic congestion along Internet routes to ensure that its VoIP traffic is equal to or better than the existing PSTN.

InfiniRoute said the Answer Seizure Ratio (ASR) and Answer Bid Ratio (ABR) of its VoIP Direct are comparable to the ASR and ABR of PSTN voice services. Many wholesale VoIP interconnection services typically have an ASR of less than 40% and an ABR of less than 30%. Better call quality translates into longer calls. Longer calls generate more revenue for carriers.

InfiniRoute VoIP Direct's managed inter-working capabilities eliminate protocol and standards conflicts, enabling full pass-through of services. Carrier subscribers with mobile phones, for example, can thus access features such as voice mail no matter where they are. Full service pass-through also provides another opportunity for Tier I carriers to increase revenues by offering a new service to subscribers who travel internationally.

InfiniRoute's VoIP Direct managed service is available now. Service offerings range from eight T1 or E1 ports up to multiple DS-3 connections in North America and E-3 connections in Europe.