Tuesday, April 25, 2006

Sprint Nextel Adds 1.3 Million Mobile Subscribers

Citing strong demand for its communications services, Sprint Nextel reported consolidated revenue of $11.5 billion, an increase of 66 percent compared to the year-ago period. Operating income was $863 million versus $1.04 billion in the first quarter of 2005.

For the quarter, diluted earnings per share were 14 cents, compared to 31 cents per share for the first quarter of 2005. The year-ago results do not include the Nextel operations.

"In the first quarter, we continued to advance on our operating and strategic goals and integrate the affiliates we have acquired," said Gary Forsee, Sprint Nextel president and chief executive officer. "Our performance in the quarter was marked by balanced growth in Wireless and we achieved good velocity on Long Distance IP and Local DSL services. With an expected ramp-up in merger synergies during the balance of 2006, we continue to maintain our financial outlook for full year performance," he said.

Some highlights:

  • In the first quarter, Wireless added 1.3 million net subscribers including 563,000 under the Sprint and Nextel post-paid brands, 502,000 under the Boost Mobile brand and 273,000 through wholesale channels and from Sprint PCS affiliates. Approximately 1.6 million subscribers were transferred from affiliates to the direct category as a result of acquisitions completed in the quarter.

  • For the quarter, total retail gross additions were 4.1 million, compared to 3.6 million in the first quarter of 2005 and 4.0 million in the fourth quarter.

  • Post-paid churn of 2.1 percent in the quarter was consistent with the year-ago period and the fourth quarter. Normalized Boost Mobile churn in the quarter was 5.4 percent.

  • Service revenues increased 13 percent, due to a larger customer base, which was partially offset by lower average revenue per user (ARPU).

  • Direct post-paid ARPU of a little over $62 in the quarter declined 3 percent, compared to the year-ago period. The decline was 1 percent sequentially.

  • Wireless capital expenditures were $1.1 billion. Spending was mainly focused on improving network quality, expanding capacity and expanding the mobile broadband footprint. Capital spending is expected to ramp up over the course of the year.

  • In long distance, voice revenues declined 5 percent compared to the year-ago period but were flat sequentially. Compared to the year-ago period, contract renewals pressured business retail voice revenues, which were partially offset by higher wholesale services and a growing contribution from cable partners.

  • Sprint Nextel was providing cable telephony wireline services to seven cable companies with a total of more than 1.02 million cable telephony subscribers, a 24 percent gain from the end of 2005.

  • Internet revenues were up 17 percent sequentially, due to strong demand for Dedicated IP and MPLS. This was partially offset by reduced ATM and Frame Relay revenues.

NEC to Combine its U.S. Operations in IT and Network Solutions

NEC USA, NEC America, and NEC Solutions (America) will combine into one new company dedicated to the IT and network solutions business. Effective July 1, the new company, with more than $1 billion in revenue, will be named NEC Corporation of America and have headquarters in Irving, Texas.

NEC Corporation of America will offer customers access to a rich portfolio of technology and professional services ranging from server and storage solutions, digital presentation and visual display systems to biometric security, optical network, radio communications and IP voice and data solutions.

Tadao Kondo, currently head of the three NEC companies being combined, has been named to lead NEC Corporation of America as president and CEO. http://www.necus.com

AT&T to Offer Vongo Movie Downloads as Differentiated Service

AT&T reached an agreement with Starz Entertainment Group to offer the "Vongo" Internet movie-delivery service to its DSL customers. The deal marks the first such broadband distribution agreement for Vongo and also serves as an example of a differentiated broadband media service supported by AT&T.

The companies will feature a co-branded AT&T and Vongo Web site and special promotions.

Vongo, unveiled earlier this year, delivers movies and other video content over the Internet for playback on Windows-based PCs, laptops and select portable media devices as well as on a TV. Vongo subscribers have unlimited access to more than 1,500 movie and video selections as well as a live, streaming Starz TV channel for a monthly cost of $9.99. Members may download movies and video selections onto three eligible devices of their choice for each account, allowing for multiple-viewing options. Popular pay-per-view titles are available for $3.99 a movie.

"Vongo's compelling content increases the value proposition for AT&T High Speed Internet customers," said Scott Helbing, chief marketing officer-AT&T Consumer. "With Vongo, we're positioned to deliver quality content, as we build a digital lifestyle platform for our customers."http://www.att.comhttp://www.vongo.com
  • Starz is using Windows Media technologies to power the Vongo service.

  • Starz has also partnered with Sony, which will make Vongo a cornerstone of its new CONNECT Video service, to be launched later this year.

  • ChoiceStream, a start-up based in Cambridge, Massachusetts, will power the personalized recommendation engine on the new Vongo Internet video on demand service from Starz Entertainment Group.

Metro Ethernet Forum Announces Service Provider Certifications

The Metro Ethernet Forum awarded certifications to seven service providers complying with its global Carrier Ethernet Service definitions. The companies receiving certification in this first round were: AT&T, Bell South, Cable Vision Lightpath (the first cable operator to apply), Met-Net, ntl:Telewest Business (the first European service provider to apply), Qwest and Verizon.

Iometrix was the company responsible for the conformance testing.

The testing involves three key stages. In the initial negotiation stage the service provider needs to prove to Iometrix that they do have a commercial Carrier Ethernet service offering that is certifiable according to any or all of Ethernet Private Line (EPL), Ethernet Virtual Private Line (EVPL) or ELAN (multipoint networking) definitions from the MEF 9 specification. This leads to the second phase, lab testing, where the service provider is required to construct a facsimile of the production network supporting their Carrier Ethernet service and then Iometrix run some 244 test cases on that system to pave the way for the third, field testing phase.

This is the world's first ever service provider certification program" says Bob Mandeville, "and the really significant fact is the commitment shown by the service providers themselves. The decision to apply for certification was taken at the highest level, and they typically dedicated 6 or 7 member teams embracing every other level - including strategic, operational, architectural and service expertise - to ensure their projects' success. Such dedication marks the service providers' commitment to Carrier Ethernet as the way forward for global networking."http://www.MetroEthernetForum.org

Equinix Adds 61 New Customers, Raises Guidance

Equinix posted Q1 revenue of $64.9 million, a 5% increase over the previous quarter and a 33% increase over the same quarter last year. The company signed 61 new customers including McGraw-Hill, Trip Advisor and YouTube. The company raised its annual revenue guidance to $280.0 to $286.0 million and EBITDA guidance to $100.0 to $105.0 million.

Some other highlights:

Over 50 percent of Equinix's new bookings in the quarter came from existing customers including Akamai Technologies, Cisco Systems, IBM, Salesforce.com and Sony Computer Entertainment.

Based on a total cabinet capacity of approximately 26,000, the number of cabinets billing at the end of the quarter was approximately 14,750, or 57%, up from approximately 14,100 the previous quarter. On a weighted average basis, the number of cabinets billing was approximately 14,500, representing a utilization rate of 56%.

NET Partners with DTECH LABS for Government VoIP Solutions

Network Equipment Technologies and DTECH LABS, a provider of secure, mobile communications products, have expanded their partnership to provide for the deployment of NET's VX Series Universal Voice Exchange on a new hardware platform developed by DTECH LABS.

DTECH's WHISPER400 is a mobile Secure VoIP Interface in a small package targeted at the tactical and first-responder market segments.

The WHISPER400 Secure VoIP Interface was designed to meet the growing demand for mobile STU, STE and SCIP (FNBDT) calling over emerging BGAN and VSAT IP-based satellite networks.

NET's VX Series is based on its Shout product technology. The VX Series software is extremely bandwidth-efficient and offers fault-tolerant capabilities for secure calls -- a critical factor when operating in tactical, high-latency or unpredictable network environments.

Redback Reports Revenue of $57.9 Million

Redback Networks reported Q1 revenue of $57.9 million, an increase of 21 percent from the fourth quarter of 2005. Net revenue was up $23.6 million, or 69 percent, over the first quarter of 2005. GAAP net loss for the first quarter of 2006 was $(2.6) million or $(0.05) per share attributable to common stockholders compared to a GAAP net loss of $(7.1) million or $ (0.13) per share in the first quarter of 2005.


Amdocs Reports 23% Growth in Revenue

Amdocs reported quarterly revenue of $601.1 million, an increase of 23.1% from the same period last year. Excluding acquisition-related costs and equity-based compensation expense, net of related tax effects, of $13.7 million, net income was $95.5 million, or $0.44 per diluted share.

Amdocs said demand for its products and services continues to be driven by service providers' need to address competition, consolidation and convergence. Amdocs' new business included eleven new key wins. In addition to Sprint Nextel, these wins include a large project with a subsidiary of a current wireline customer as it adopts an integrated customer management strategy. In the directory area, Amdocs had several wins with projects involving sales force automation, digital advertising, and business process outsourcing. Amdocs was selected by Vimpelcom and its affiliates in the Commonwealth of Independent States.


Tellabs Q1 Revenue Grows 18% to $515 Million

Tellabs reported Q1 revenue of $515 million, up 18% from $436 million in the first quarter of 2005. On a GAAP basis, Tellabs earned $52 million or 11 cents per share compared with $1 million or less than one cent per share in the first quarter of 2005.

  • Broadband - Revenue from the broadband segment totaled $260 million, up 14% from $228 million in the first quarter of 2005. Within the broadband segment, access product revenue totaled $164 million, up 28% from $128 million in the first quarter of 2005; managed access product revenue totaled $74 million, down 22% from $94 million a year ago; and broadband data product revenue more than tripled to $22 million from $7 million a year ago.

  • Transport - Revenue from the transport segment totaled $214 million, up 24% from $173 million in the first quarter of 2005, driven by demand from wireless-quality enhancement products.

  • Services - Services revenue was $41 million, up 18% from $34 million in the first quarter of 2005.
  • http://www.tellabs.com

MRV Reports 25% YoY Growth, Strong Transceiver Sales for Verizon FTTP

MRV Communications reported $77.3 million, an increase of 25% over revenues of $62.0 million for the first quarter of 2005. GAAP net loss for the first quarter of 2006 was $3.7 million, or $0.03 per share, a reduction of 43% when compared to a GAAP net loss of $6.4 million, or $0.06 per share, for the first quarter of 2005.

MRV's optical component business unit, LuminentOIC, posted 43%sequential revenue growth and continued to improve gross margin to 21%. Demand was primarily driven by sales of its ONT Triplexer Transceiver, which is being used in Verizon's FTTP deployment. LuminentOIC announced it had surpassed the half million milestone for shipments of its ONT Triplexer Transceiver.

MRV's core networking business (internally developed) benefited from a strong quarter from sales of advanced networking products used by the US Government, with sales to this segment increasing 26% sequentially.

MRV's systems integration business in Europe enjoyed another strong quarter with a 25% year-over-year increase in revenue. Margins also improved as the networking business posted gross margins of 37.5% overall, a 670 basis point improvement from the preceding quarter.http://ir.mrv.com

Time Warner Telecom Supports SIP Network Serving 14,000 University Telephones

Time Warner Telecom is supplying a managed voice and data network to Boise State University that encompasses over 14,000 telephone numbers and 4,000 handsets. Time Warner Telecom's 20 Mbps capable SIP trunk service replaces existing T1s.

Time Warner Telecom's metro Ethernet Native LAN uses Cisco equipment and has been designated a Cisco Powered Network service.


NETGEAR Posts 17% Growth, Notes Component Shortage

NETGEAR reported Q1 revenue of $127.3 million, a 16.8% increase as compared to $109.0 million for the first quarter ended April 3, 2005, and an increase of 4.5% as compared to $121.8 million in the fourth quarter of 2005. Net income (GAAP) was $9.9 million or $0.29 per diluted share. This net income was a 25.3% increase compared to net income of $7.9 million for the first quarter of 2005 or $0.24 per diluted share, and $8.9 million or $0.26 per diluted share in the fourth quarter of 2005.

Non-GAAP gross margin in the first quarter of 2006 was 35.1%, as compared to 33.0% in the year ago comparable quarter, and 31.3% in the fourth quarter of 2005.

"Demand in the first quarter continued to be strong across all three regions, maintaining the momentum of the fourth quarter. Channel supply experienced continued constraints due to component shortages on our most popular products: RangeMax 240 in the U.S. and DSL2+ gateways in Europe and in Australia. We expect component shortages will last until the middle of the second quarter due to sustained high market demand levels," stated Patrick Lo, Chairman and CEO of NETGEAR.


ARRIS Reports Preliminary Results

ARRIS reported preliminary results for Q1, including net revenue of $208.3 million, up 53% as compared to $135.9 million in the first quarter 2005 and up 15% as compared to $181.3 million in the fourth quarter of 2005. Net income per diluted share for the first quarter 2006 was $0.19, up 375% as compared to $0.04 in the first quarter 2005 and down 5% as compared to $0.20 in the fourth quarter of 2005. Gross margins were 27.1%, equal to the first quarter 2005 and down from 31.9% in the fourth quarter 2005 primarily due to changes in product mix coupled with price reductions that took effect at the beginning of 2006.

"Our results this quarter show that we have started 2006 with great momentum," said Bob Stanzione, ARRIS Chairman & CEO. "Accelerating competition within our customers' markets continues to drive demand for more bandwidth, more new services and higher levels of quality. The new, innovative and market leading products that ARRIS is now delivering for data, voice and video transport, help our customers in the growing competition between, cable, telco and satellite. As a result, I am very positive about the outlook for ARRIS in 2006 and beyond."http://www.arrisi.com

MLB.com Chooses Anystream for Webcasting

MLB.com will use Anystream's Agility software to webcast 2,430 Major League Baseball games to a variety of consumer devices, including mobile phones. Anystream Agility is an automated, mission-critical solution that tightly integrates with MLB.com's other production systems to autonomously extract video and make it playout-ready for virtually any platform and consumer device.


Sun Supplies Servers & Storage for Fox, HBO

Fox Television Stations is deploying Sun Microsystems' Solaris 10 operating system (OS), servers, storage, and service to power its new centralized sales, traffic and programming management system. The project, including integration with neighboring systems and the gradual rollout across all Fox Television stations is planned to take less than three years.

Separately, Home Box Office (HBO) has evolved its digital broadcast architecture exclusively using Sun Microsystems's workflow and storage technologies. HBO has standardized on Sun technology to make a transition from standard-definition (SD) and high-definition (HD) video tape-based environments to a server-based storage and play-out system supporting its bi-coastal network of 28 SD and four HD channels as well as on-demand distribution.


Seagate Releases 750GB Perpendicular HDD

Seagate Technology released the first desktop hard drive to hit the 750GB capacity mark. The monster drive is part of the new Barracuda 7200.10 family built on perpendicular recording technology, which stands data bits vertically onto the disc media, rather than horizontal to the surface as with traditional longitudinal recording.

Barracuda 7200.10 also features cache sizes from 8MB to 16MB and 1.5 Gb/s and 3.0Gb/s Serial ATA (SATA) data transfer rates with Native Command Queuing. NCQ enhances reliability in heavy workloads by reducing head movement and streamlining the delivery of queued commands to the drive.