Tuesday, October 31, 2006

Tekelec Considers Strategic Options for its Switching Unit

Tekelec reported revenue from continuing operations for the third quarter of 2006 was a record $155.2 million, up 43% compared to $108.4 million for the third quarter of 2005. For the third quarter of 2006, the company had orders for the Telecom business of $108.0 million, up 8% compared to $100.4 million for the second quarter of 2006 and down 20% compared to $135.6 million for the third quarter of 2005. Telecom backlog as of September 30, 2006 was $455.0 million compared to $502.2 million as of June 30, 2006 and $520.2 million as of December 31, 2005.

On a GAAP basis, Tekelec reported a loss from continuing operations for the third quarter of 2006 of $87.5 million, or $1.30 loss per diluted share, compared to a loss from continuing operations of $7.6 million, or $0.11 loss per diluted share, for the third quarter of 2005. GAAP operating results for the third quarter of 2006 include a non-cash impairment charge of $100.6 million related to the write-down of certain goodwill and acquired technology assets of the Switching Solutions Business Unit.

Approximately $25.6 million of these charges relate to the impairment of acquired technology and $75.0 million of these charges reflect the write-down of goodwill relating to the acquisitions of Santera Systems Inc. and Vocal Data Inc.

In connection with this comprehensive evaluation and assessment of its Switching Solutions Business Unit, Tekelec has retained J. P. Morgan Securities Inc. as an advisor to help identify and evaluate strategic alternatives to leverage its switching technology portfolio.

As a result of the continued losses in the Switching Solutions Business Unit, Tekelec has further reduced the size of its operations in Plano, Texas. An addition 104 employees have been laid off and other positions are being eliminated.


AudioCodes and Broadsoft Partner

AudioCodes and Broadsoft are collaborating to provide pre-integrated access solutions for hosted VoIP applications. AudioCodes will join BroadSoft and a consortium of other customer premises equipment (CPE) and access equipment vendors to build solutions that integrate equipment with hosted applications to simplify the integration challenges service providers face when deploying new services.

The companies supporting the BroadWorks VoIP application platform and AudioCodes media gateway platforms, collaborating with each other to validate components with each new product release. AudioCodes provides the ability to connect the BroadSoft application to existing enterprise PBX and/or analog phones and faxes, offering a high level of voice quality gateways.


GridNetworks Unveils P2P "GridCast" Digital Content Delivery

GridNetworks, a start-up based in Seattle, unveiled its "GridCast" Platform for instant-on, full-screen, DVD-quality video to broadband-connected viewers.

GridNetworks said its solution overcomes the challenges faced by both content delivery networks (CDNs) and Peer-to-Peer (P2P) software solutions. While CDNs can provide secure distribution of content, their hardware-based delivery systems are expensive and fail to offer the delivery speed or scalability required to provide a reasonable alternative to conventional broadcast distribution. P2P solutions offer an inexpensive way to move complete video files, but fail to provide on-demand streaming, speedy file delivery, or a content security model video asset owners desire.

GridCasting is hybrid solution that combines CDN technologies with GridCast software. The approach is a new video delivery paradigm in which each participating computer becomes part of a vast, managed content distribution grid, optimized to deliver segmented, encrypted video data directly to the viewer's screen. This "Software CDN" approach effectively creates a vast, global network of mini-servers to redistribute encrypted video segments, providing overall network capacity and capabilities far greater than traditional CDNs. In addition to dramatically increasing the effective distribution network size, the GridCast Platform maintains centralized command-and-control of valuable video assets and has the industry's toughest content security proposition.


Microsoft Releases Windows Embedded CE 6.0

Microsoft released Windows Embedded CE 6.0, targeting devices such as IP set-top-boxes, Global Positioning Systems (GPS), wireless projectors, and a variety of industrial automation, consumer electronics and medical devices. Windows Embedded CE 6.0 is a tool kit device-makers use for building customized operating system images for a variety of non- desktop devices.

Windows Embedded CE 6.0 boasts a re-engineered kernel with capabilities such as a capacity for 32,000 simultaneous processes and 2 GB of virtual memory address space per process while maintaining the software's real-time capabilities.

The new release also adds cell core data and voice components, enabling devices to establish data connections and voice calls over cellular networks. Microsoft expects this will lead to machine-to-machine communication scenarios between devices such as parking meters, vending machines and GPS units.


Tyco to Build Undersea Cable System in Gulf of Mexico

Tyco Telecommunications signed a contract with Houston-based BP America Inc. to supply an undersea fiber optic system serving offshore platforms in the Gulf of Mexico. The system will comprise the undersea backbone of a regional communications network, providing diverse connectivity from BP's Gulf of Mexico offshore production facilities back to the regional operating center in Houston, Texas. Financial terms were not disclosed.

The system will initially link seven deep-water production platforms with landings in Freeport, Texas and Pascagoula, Mississippi. The network incorporates an upgrade capability designed to support 64 platforms. http://www.tycotelecom.com

Swisscom Launches Bluewin IPTV Service

Swisscom officially launched its Bluewin IPTV service, offering 100-plus television channels, 70-plus radio channels, live sports coverage and an initial VOD library of 500-plus films.

The monthly fee for the basic offering, Bluewin TV Plus, is CHF 29 (US$23).

Bluewin is delivered over either an ADSL or VDSL connection. Customers in areas which do not yet provide VDSL access can have only one TV channel transmitted at a time, and pay CHF 26 instead of CHF 29 for the basic package.

The set-top box functions as a PVR and provides over 100 hours of recording capacity. Bluewin TV is installed by a specialist at the customer's home for a charge of CHF 95. Households with two television sets require a second Bluewin TV set-top box. This costs CHF 10 a month.

Bluewin TV currently covers around 75% (or 2.3 million) of Swiss households. Some 65% (or 2 million) of households have access to VDSL technology. VDSL cells are currently being deployed with a copper distance to the subscriber of 1,500m. Smaller cells with a radius of 750 meters will be gradually added, increasing bandwidth to 30 Mbps. There are 14 regional metro networks across Switzerland that have been upgraded to 10GbE.

Swisscom is operating digital headend stations in Olten and Volketswil. The server farms are located in Herdern, Zurich.

Key network components include:

  • Microsoft's IPTV software

  • HP servers -- well over 200 servers are used for the operational system

  • Tandberg encoders -- Bluewin is using VC-1 encoding.

  • Linksys CPE, including set-top boxes



AT&T Expands Homezone -- Combining Satellite and Broadband Content

AT&T has expanded the availability of its "Homezone" service across its entire broadband footprint. AT&T Homezone integrates AT&T Yahoo! High Speed Internet, AT&T | DISH Network satellite television and AT&T Home Networking services via a single device.

AT&T Homezone is available to new AT&T | DISH Network residential customers who either already have or plan to order AT&T Yahoo! High Speed Internet and the 2Wire home networking gateway. Customers can select from several broadband speeds and satellite TV packages, then purchase Homezone service for an additional $9.99 a month.

AT&T said Homezone complements its "U-verse" IPTV service, which is available in San Antonio and will be launched in additional markets by year-end. While AT&T U-verse services will be the company's primary video offer in available markets.

The AT&T Homezone receiver can support up to two televisions at the same time with access to recorded programs, movies, photo and music collections from either TV. The second TV receives its signal through a home's existing coaxial cable wiring.

2Wire is the CPE provider for the AT&T Homezone receiver.


Modulus Unveils MPEG-4 AVC Encoding Solution

Modulus Video unveiled a real-time, MPEG-4 AVC encoding solution for both SD and HD designed to meet the growing demand for video on demand (VOD) movies and local content delivered over IPTV networks.

The Modulus VODxchange system can convert content from virtually any video format and encode it into MPEG-4 AVC at bit rates specifically optimized for IP networks. It includes advanced features like bandwidth optimizing Constrained Fidelity-Constant Bit Rate (CF-CBR) mode, digital program insertion triggers and integrated low resolution stream output. The solution set includes the MPEG-4AVC encoder, video file transcoding, VTR control, quality control and monitoring and an integrated RAID storage subsystem. VODxchange is expected to ship during Q4 2006.

Modulus Video has been working with ViewNow, a leading IPTV/VOD content aggregator that licenses, encodes and distributes major Hollywood Studio content, to enable MPEG-4 AVC based VOD for IPTV networks.


Efonica Reaches 750,000 VoIP Subscribers

Fusion Telecommunications has registered more than 750,000 subscribers from more than 100 countries since launching its free Efonica VoIP services this past June. In addition, Fusion now has more than 10,000 paid Efonica subscribers.

Efonica offers subscribers its worldwide "Internet area code", which when dialed allows subscribers to speak with each other for free. Subscribers can simply register their existing landline or mobile telephone number as their Internet telephone number and immediately begin to make calls to and from any combination of PCs, Internet phones, WiFi phones, and regular telephones (with a SIP adapter), connected to either a wireless, broadband or dial-up Internet connection.


Amdocs Reports Quarterly Revenue of $665 Million, up 16%

Amdocs reported quarterly revenue of $665.4 million, an increase of 16.1% from last year. Net income on a non-GAAP basis was $109.5 million, or $0.50 per diluted share (excluding acquisition-related costs. The company cited ten new wins, including Bell Canada.

"The strong market that we saw in 2006 was a result of the transformation that service providers are undergoing," said Dov Baharav, chief executive officer of Amdocs Management Limited. "We see strong demand as our customers cope with competition, consolidation and convergence; our customers continue to introduce IP-based services to capture new revenue streams. Amdocs expanded its offering this year with the acquisitions of Qpass in the content area and Cramer in OSS.


Bell Canada Sees Slower Growth for DSL, Wireless

Bell Canada reported revenues of $4,339 million in the third quarter, up 0.4% from the same quarter last year, driven by higher average revenues per user (ARPU) in residential growth services (wireless, video and high-speed Internet), as well as an expanding subscriber base in those services, improved revenue performance from the Bell Aliant Regional Communications Income Fund (Bell Aliant) and growth in revenues from wireless and Information, Communication and Technology (ICT) solutions in the Business segment.

Reported operating income was $827 million, which is $78 million lower than the same quarter last year, mainly as a result of charges associated to previously announced workforce reductions and the related closure of real estate facilities and employee relocations as well as the formation of Bell Aliant.

Some operational highlights:

  • Bell Canada added 90,000 net new high-speed Internet customers in Q3, compared to 106,000 net activations in Q3 2005, bringing the total base to 2,403,000 or 12.6% higher than last year. Bell Canada said the year-over-year decline in new subscriber additions was expected as net activations in Q3 2005 were fuelled by the growth of its Basic Lite products and by extensive footprint expansion.

  • Bell Canada added 114,000 new net wireless subscribers this quarter, compared to 123,000 in Q3 2005, bringing its subscriber base at the end of Q3 2006 to 5,704,000. Higher revenue-generating postpaid subscribers accounted for 82%, or 94,000, of total net activations in the quarter, up from 41% last year, as a result of significantly improved customer retention efforts.

  • The overall wireless churn rate remained unchanged year-over-
    year at 1.5%, despite higher prepaid churn in the quarter which had a
    negative impact on total net activations.

  • Bell activated 30,000 new net video subscribers in the quarter, compared to 82,000 in Q3 2005, bringing our total subscriber base to 1,788,000 as of September 30, 2006 for a 6.6% increase over last year. The relatively fewer number of new subscriber activations in Q3 2006 compared with the previous year reflected reduced market growth, accelerated analog to digital migrations by cable operators, decreased sales in retail channels and the acquisition of Cable VDN Inc. (Cable VDN) in Q3 2005, which added an incremental 12,500 new net customers to the subscriber base. Churn in the third quarter remained unchanged, year-over-year, at 1.0%.