Tuesday, October 30, 2007

Taiwan's Chunghwa: 26% of Broadband Lines Exceed 8 Mbps, 350K IPTV Users

Chunghwa Telecom, the incumbent operator in Taiwan, was serving 4.22 million broadband subscribers (including ADSL and FTTB subscribers) at the end of September 2007, a 6.3% increase compared to the same period of last year. At the end of September 2007, the number of ADSL and FTTB subscriptions with service speed greater than 8 Mbps reached 1.12 million, representing 26.4% of total broadband subscribers. There were 81,000 net HiNet FTTB additions in Q3, bringing the total number of HiNet FTTB subscribers to 391k.

Also, Chunghwa had 358k MOD (IPTV) subscribers, with 24k new subscriptions added during the third quarter; a 74.1% increase year-over-year.

Some additional highlight's from the Q3 2007 financial report:

  • Total revenue increased by 10.0% to NT$52.1 billion

  • Internet and data revenue grew 5.6%; ADSL & FTTB increased by 4.1%

  • Mobile revenue grew 1.4%; Mobile VAS revenue increased by 32.4%

  • Net income totaled NT$11.9 billion, an increase of 6.8%

  • Fixed-line declines have been decelerated over the past nine months, with total fixed-line revenue declining 2.6% to NT$45.9 billion, compared to the 6.4% decline in the first nine months of FY2006. International Long Distance revenue increased 4.4%, primarily driven by the significant revenue growth in international prepaid cards and the wholesale business. This was offset by the 3.9% Local revenue decrease and the 7.2% Domestic Long Distance revenue decrease, mainly due to mobile and VoIP substitution.

  • Capital expenditures totaled NT$15.8 billon for the nine months ended September 30, 2007, of which 83% was for wire line equipment (including fixed- line and Internet and data) and 15% was for wireless equipment. Capital expenditures were down 14.6% from the NT$18.5 billion for the nine months ended September 30, 2006, mainly due to a NT$3.4 billion decrease in mobile spending.

  • Chunghwa had 8.66 million mobile subscribers, with net additions of 75k during the third quarter. Chunghwa had 308k net additions to its 3G subscriber base during the third quarter, bringing total 3G subscribers to 1.99 million.

Alcatel-Lucent Posts Q3 Revenue and Presents Restructuring Indicatives

Alcatel-Lucent reported Q3 revenue of Euro 4.35 Billion, up 2.3% sequentially and down 7.8 % year-over-year at constant EUR/USD exchange rate. Gross margin improved sequentially to 34.2%. The company also presented new restructuring initiatives.

"As you can see our results this quarter were essentially in line with the update we provided on September 13, and in a few areas a bit better; however they are still not at a level that we are satisfied with, commented CEO Pat Russo.

Alcatel-Lucent's Board of Directors expressed its support for a newly presented restructuring plan. Key points of the plan include:

  • Streamlining the core carrier business, accelerated product cost improvement with increased portfolio focus on IP transformation of wireline and wireless networks.

  • Enhancing growth by developing an offensive strategy on sectors offering a strong growth potential, namely: high value added services and applications for the carrier markets; solutions for the enterprise markets and Industry and Public Sector; streamlining the organization into a simplified model with a focused management committee with clear accountabilities and ownership to quickly execute the plans.

  • Lowering the cost structure, especially in support functions and other savings arising from the realigned and streamlined Carrier business Group. The company expects that this plan will result in incremental savings of Euro 400 million in gross margin and comparable operating expenses by the end of year 2009. This implies an acceleration of our ongoing headcount targets into 2008 with incremental reductions of about 4,000 by 2009.

Some highlights for Q3 2007

  • Revenue for the carrier business segment was Euro 3,142 million compared to Euro 3,706 million in the year-ago quarter, an 8% decrease at a constant Euro/USD exchange rate, or a 15% decrease at current rate. Adjusted operating income (loss) was Euro 22 million, a 0.7% operating margin.

  • Revenue for the wireline business group was Euro 1,520 million compared to Euro 1,447 million in the year-ago quarter, an 8% increase at a constant Euro/USD exchange rate, or a 5% increase at current rate.

  • Revenues were very strong in optical networking with good growth in terrestrial and a robust increase in submarine. Metro and long-haul WDM exhibited a very strong performance. North America, Europe and South and Asia-Pacific increased on a regional basis.

  • Broadband access also demonstrated a solid quarter in DSL with 8.0 million lines delivered (24.9 million lines delivered year to date), up 19% year over year, with strong traction in North America.

  • Revenue for the wireless business segment was Euro 1,276 million compared to Euro 1,674 million in the year-ago quarter, a 20% decrease at a constant Euro/USD exchange rate, or a 24% decrease at current rate.

  • The wireless revenue decline was largely due to a comparison with very strong CDMA results in North America in the year-ago quarter, when significant initial revenues were booked for the deployment of CDMA2000 1x-EV-DO Rev A by major operators following the commercial availability of the enabling software. Sequentially, CDMA revenue slightly grew as CDMA gained outside North America, primarily in India, and Rev A deployments continued in North America and globally.

  • Revenue in GSM declined from the year-ago quarter but continued to gain traction with its second consecutive strong sequential increase, notably with new product offerings (Twin TRX and ATCA BSC).

  • Revenue for the convergence business group was Euro 346 million compared to Euro 585 million in the year-ago quarter, a 39% decrease at a constant Euro/USD exchange rate, or a 41% decrease at current rate.

  • Classic core switching revenue continued to decline. In the multimedia and payment businesses, revenues were negatively impacted by the declining market in pre-paid payment solutions. Investments continued in order to evolve IPTV capabilities, including the acquisition of Tamblin, a London-based developer of applications and tools that enables interactive TV programming and advertising over IP.

  • Revenue for the enterprise business segment was Euro 380 million compared to Euro 362 million in the year-ago quarter, an 8% increase at a constant Euro/USD exchange rate, or a 5% increase at current rate. Adjusted operating income (loss) was Euro 29 million, a 7.6% operating margin. Revenues increased across all parts of the enterprise business, with a very strong performance in the Asia-Pacific region.

  • Revenue for the services business segment was Euro 777 million compared to Euro 775 million in the year-ago quarter, a 3% increase at a constant Euro/USD exchange rate, or flat at current rate. Adjusted operating income (loss) was Euro 40 million, a 5.1% operating margin.

  • Year-to-date the company has reduced headcount of 5,000 people before the impact of managed services and acquisitions (approximately 1,350 people). The company plans to achieve its synergy-related comparable pre-tax savings of Euro 600 million this year.

  • For the fourth quarter 2007 the company expects a solid ramp up in revenue over the third quarter 2007. For the full year, given some of the recent uncertainty seen in the market, revenues are likely to be around flat at Euro/USD exchange rate which is at the low end of the range previously provided.


Alcatel-Lucent Announces Senior Management Change

Alcatel-Lucent has named Hubert de Pesquidoux as its new Chief Financial Officer (CFO), replacing Jean-Pascal Beaufret, who is leaving the company to pursue other opportunities. Hubert de Pesquidoux currently leads the Enterprise Group of Alcatel-Lucent.

As part of its plan to improve profitability it has streamlined its regional structure, the company will create two regional structures, one for the Americas and one that includes Asia Pacific, Europe, Africa and the Middle East. Frederic Rose, who currently heads the Asia-Pacific Region, will assume additional responsibilities for the company's current Europe & North and Europe & South regions. Cindy Christy, will lead the Americas Region. Frederic Rose and Cindy Christy will continue to report directly to Patricia Russo. Olivier Picard, head of the Europe and South region will continue to oversee the Europe and South region, reporting to and serving as deputy to Frederic Rose. Christian Reinaudo, head of the Europe and North region, will be leaving the company to pursue other opportunities.

In addition, CEO Patricia Russo has established a seven-member management committee reporting directly to her to lead the overall operation of the company. The management committee will comprise seven business leaders: Cindy Christy, Americas Region; Etienne Fouques, who oversees Research, CTO, Strategy and Corporate Marketing; John Meyer, head of Services; Claire Pedini, head of Corporate Human Resources and Communications; Hubert de Pesquidoux, CFO; Michel Rahier, who leads the Carrier Business Group; and Frederic Rose, Europe, Middle East, Africa and Asia Pacific. Janet Davidson, Chief Compliance Officer and head of the Integration and IT, will serve as secretary for the committee.


Telindus Offers Unified Communication Solutions from ShoreTel

Telindus, the European specialist in ICT solutions and services, will sell ShoreTel products to deliver unified communications as a managed service. Financial terms were not disclosed.

Telindus operates in 14 countries in Western Europe, Sweden, Hungary, China and Thailand. Telindus' headquarters are in Belgium.
  • In January 2006, Telindus joined the Belgacom Group, becoming the IT Services division of the market's new business leader.

Windstream to Bundles TiVo DVR & High-Speed Internet Access

Windstream will begin offering bundled internet and TiVo DVR services in 2008. Windstream has approximately 3.3 million access lines across 16 states.


Huawei Collaborates with ITU on Emerging Market Initiatives

Huawei Technologies signed a Memorandum of Understanding (MOU) with the International Telecommunication Union (ITU) to jointly promote telecom technologies in developing countries. Under the MOU, Huawei and ITU will work together to improve connectivity in rural and remote areas in emerging markets, as well as to close gaps in broadband backbone networks. As a first step, the two parties will use Huawei's existing training centers in India and Nigeria to provide telecommunications training for local talent. Huawei operates 22 training centers across the world, with 12 strategically located in developing countries including India, Nigeria and Egypt.



Allot Announces First Commercial Deployment its New Service Gateway

Allot Communications announced the first commercial deployment of the Allot Service Gateway, Omega Series (SG-Omega). The Service Gateway provides a platform for broadband providers to build secure, manageable and profitable intelligent networks, optimized to deliver Internet-based content and services.

The Service Gateway has recently been deployed at a major DSL Internet service provider in the Asia Pacific region. The Service Gateway is operating on 10 Gigabit Ethernet lines, intelligently managing high-volume IP flows on its core network. The Service Gateway is also undergoing evaluations at additional carriers. The name of the carrier was not disclosed.

The SG-Omega leverages Layer-7 DPI technology and supports throughput of over 20 Gigabits per second on a single platform. The platform can be configured with up to four 10-Gigabit Ethernet interfaces that support two 10-Gigabit Ethernet lines and can process up to 20 million concurrent IP flows. The Service Gateway is based on an AdvancedTCA chassis for deployment in service provider networks. Its resilient hardware and software architecture ensures platform stability and availability through hot-swappable blades, efficient N+1 redundancy within the chassis, and internal hardware and software bypass mechanisms that protect against failures.

Avaya Launches "Master Reseller" Channel Programs Focused on SMBs

Avaya launched two programs that broaden its support for sales channels. Specifically, the Avaya Master Reseller program is enabling select Avaya BusinessPartners to recruit and train independent sales agents who work under their direction to sell Avaya's small and mid-sized business portfolio. Many of the new agents are companies that specialize in data networking but want to offer their clients ready access to voice solutions as well.

To date, 10 Master Resellers are working with more than 300 independent sales agents across North America. Avaya supports the program with a special educational program for new agents and with dedicated account managers and distribution managers for each Master Reseller.


Verizon Business Joins Internet2

Verizon Business has joined Internet2 as a corporate member.

The company plans to collaborate with the Internet2 community on projects involving advanced optical networking as well as in areas of next-generation content delivery and network security.


EMBARQ Links Home and Wireless Phones

EMBARQ announced a new "Together Plan Plus" linking its residential and mobile phone services. Customers are able to control where they take the call, when to take the call and what phone to use with new calling feature capabilities. A call to a customer's home number could simultaneously ring their wireless phone or be directed to any alternate phone if there is no answer. Customers can transfer calls they've received on their home phone to any other wireless or landline phone they have pre-selected without interrupting the call. The call can then be either transferred back to the originally called number or to a third number, helping to reduce the number of wireless minutes customers use when they are at home.

EMBARQ Together Plan Plus works with the customer's existing EMBARQ home phone service and any wireless service. However, customers with EMBARQ Wireless service can also direct unanswered wireless phone calls to ring multiple devices.


Polycom Expands VoIP Partnership Program

Polycom has expanded its VoIP Interoperability Partner (VIP) Program for manufacturers of SIP-based call control platforms with the addition of six newly certified members: Cedar Point Communications, LignUp, MetaSwitch, PanTerra Networks, Sutus, and Zultys. Polycom now recognizes a total of 25 leading VoIP platform providers as certified members who deliver solutions that seamlessly interoperate with the Polycom SoundPoint IP desktop and SoundStation IP conference phones. http//www.polycom.com/vip

Sonus Adds Higher Performance DSP Modules to GSX9000

Sonus Networks unveiled new hardware Circuit Network Server (CNS) modules for its GSX9000 Open Services Switch.

The company said the GSX9000 platform can now scale to deliver up to three times the compression (or throughput) when using the new CNS modules with built in digital signal processors. The modules are NEBS-compliant and feature Digital Signal Processing (DSP) technology from Texas Instruments. The new CNS modules include STM-1 interfaces and three times the number of E1 telephone network interfaces in the same footprint. In addition, the new CNS modules are designed to support a broad suite of wireless codecs.


FCC Ends Cable Exclusivity for Consumers Residing in Multiple Dwelling Units

The FCC will ban the use of exclusivity clauses for the provision of video services to multiple dwelling units (MDUs) or other real estate developments. Nearly 30% of Americans live in MDUs and these numbers are growing. From 1995 to 2005, cable rates have risen 93%. In 1995, cable service cost $22.37 per month. Prices for expanded basic cable service have now almost doubled. The trend in pricing of cable services is of particular importance to consumers. Since 1996 the prices of every other communications service (such as long distance and wireless calling) have declined while cable rates have risen year after year after year.

The FCC said it is seeking to foster greater competition in the market for the delivery of multichannel video programming. These rules will increase choice and competition for consumers residing in MDUs and other real estate developments.

Specifically the Order finds that:

  • exclusivity clauses that bar competitive entry harm competition and broadband deployment and can insulate the incumbent MVPD from any need to improve its service.

  • exclusivity clauses are widespread in agreements between MVPDs and MDU owners.

  • incumbent cable operators have increased the use of exclusivity clauses in their agreements with MDU owners with the entry of LECs into the video marketplace.

  • the use of exclusivity clauses in contracts for the provision of video services to MDUs constitutes an unfair method of competition or an unfair act or practice under Section 628(b).

The Commission also adopted a Further Notice of the Proposed Rulemaking (Further Notice) that seeks comment on whether we should take action to address exclusivity clauses entered into by DBS providers, private cable operators, and other MVPDs who are not subject to Section 628. The Further Notice also seeks comment on whether the Commission should prohibit exclusive marketing and bulk billing arrangements.

In a statement, FCC Chairman Kevin Martin said "All consumers, regardless of where they live, should enjoy the benefits competition in the video marketplace. Exclusive contracts between incumbent cable operators and owners of "multiple dwelling units" (MDUs) have been a significant barrier to competition. Today's order removes this barrier. Specifically, the item we adopt today finds that the use of exclusivity clauses in contracts for the provision of video services to MDUs constitutes an unfair method of competition or an unfair act or practice in violation of Section 628(b) of the Act. Thus, we prohibit the enforcement of existing exclusivity clauses and the execution of new ones by cable operators."http://www.fcc.gov

FCC Expands Local Number Portability to VoIP

The FCC voted to expand local number portability (LNP) rules to VoIP services, giving consumers the right to keep the same, familiar phone number when switching to a new provider.

The FCC made clear that the obligation to provide local number portability extends to interconnected Voice over Internet Protocol providers and the telecommunications carriers that obtain numbers for them. The FCC said the action was, in part, a response to numerous complaints by consumers about their inability to port numbers to or from interconnected VoIP providers. The FCC also initiated a Notice of Proposed Rulemaking seeking comment on additional VoIP numbering issues.

The FCC also clarified in its order that telephone companies may not obstruct or delay number porting by demanding excess information from the customer's new provider, and specifically concluded that LNP validation for a simple number port should be based on no more than four fields: (1) 10-digit telephone number; (2) customer account number; (3) 5-digit zip code; and (4) pass code, if applicable.


Norihiko Minato Appointed Head of AT&T Asia Pacific and Japan

Norihiko (Hiko) Minato has been appointed as the new head of the AT&T Asia Pacific and Japan region. Effective Nov. 1, 2007, the company's 12 Asia Pacific markets and Japan will be combined into one region under the new organization.

Hiko Minato, who was most recently the president of AT&T Japan, will relocate from Tokyo, Japan to Hong Kong and report to John Finnegan, senior vice president of AT&T Global Sales. By integrating the operations of Japan and Asia Pacific under Mr. Minato, Japanese MNCs will gain easier access to some of the key emerging markets in Asia Pacific, while at the same time companies throughout the Asia Pacific region will benefit from the comprehensive network solutions provided by AT&T when they want to enter to the Japanese market.


Boingo Wireless Acquires Sprint's Wi-Fi in 7 U.S. Airports

Boingo Wireless has acquired seven airport Wi-Fi networks from Sprint and converting them to Boingo hotspots. Financial terms were not disclosed.

Sprint customers will retain Wi-Fi access in these seven airports and will gain access to 16 additional airports where Boingo provides Wi-Fi services directly. Additionally, the companies have entered into a roaming agreement that will provide Sprint customers access to Boingo's global hotspot network.