Tuesday, October 21, 2008

Qwest Wins Veterans Affairs (VA) VPN Contract

Qwest Communications was awarded a $60 million contract by the U.S. Department of Veterans Affairs (VA) to serve as its contractor for the delivery of voice and data services connecting the VA's headquarters in Washington, D.C., and nearly 1,300 hospitals, regional offices and other facilities across the nation. Qwest will deliver the services under the federal Networx Universal contract, which is part of Networx, the largest government communications procurement program in the world.
Also, the VA is permitted to order additional voice and data services from Qwest that could increase the value of the 10-year agreement.http://www.qwest.com

AT&T Reports Gains with iPhones, Wireless Data, U-verse

AT&T reported solid financial results for Q3 driven by strong wireless gains and stable trends in business services, including continued double-digit IP data growth and a major turnaround in wholesale revenue growth. The performance was led by the Apple iPhone 3G -- which was launched on July 11 -- with a total of 2.4 million activations in the quarter, approximately 40 percent of them to new wireless AT&T customers. AT&T's earnings rose 5.5 percent, but missed analyst estimates due to subsidies for the 2.4 million iPhones.

AT&T's consolidated revenues totaled $31.3 billion, up 4.0 percent versus reported results in the year-earlier quarter and up 3.3 percent compared with third-quarter 2007 pro forma revenues, which exclude merger-related accounting impacts on directory revenues.

Consolidated revenue growth was driven by 15.4 percent growth in wireless revenues and a 16.2 percent increase in wireline IP data revenues, which includes AT&T U-verse services and business offerings such as VPNs, managed Internet services and hosting. Gains in these areas more than offset pressures in the macro-environment and a decline in wireline consumer voice, which was consistent with trends in recent quarters.

Compared with results for the year-earlier quarter, AT&T's reported operating expenses for the third quarter of 2008 were $25.7 billion versus $24.8 billion; reported operating income was $5.6 billion, up from $5.3 billion; and AT&T's reported operating income margin was 17.9 percent, up from 17.6 percent.

Some additional highlights:


  • AT&T posted the largest postpaid net subscriber gain for any quarter in its history. Retail postpaid net subscriber additions of 1.7 million were up nearly 40 percent versus results in the year-earlier third quarter and accounted for more than 85 percent of AT&T's 2.0 million total wireless net adds. Total monthly subscriber churn in the third quarter was 1.7 percent, flat with results for the year-earlier quarter, and postpaid churn was 1.2 percent, down from 1.3 percent in the third quarter of 2007.

  • 2.4 Million Apple iPhone 3G Activations. Postpaid subscriber growth was boosted by the dramatic market success of the iPhone 3G. Third-quarter activations of the iPhone 3G totaled 2.4 million, approximately 40 percent to customers who were new to AT&T.

  • 50.5 Percent Wireless Data Revenue Growth. AT&T's wireless data revenues grew 50.5 percent versus the year-earlier quarter to $2.7 billion, reflecting strong increases in areas such as Internet access, messaging, e-mail and related services. Wireless Internet access revenues more than doubled versus results for the year-earlier quarter, and multimedia message volumes were also more than double third-quarter 2007 levels.

  • 15.4 Percent Total Wireless Revenue Growth. Driven by subscriber gains and data growth, AT&T's total wireless revenues increased 15.4 percent to $12.6 billion, and wireless service revenues, which exclude handset and accessory sales, grew 14.3 percent to $11.3 billion. Retail postpaid subscriber ARPU was $58.99, up 2.6 percent versus the year-earlier third quarter.

  • Wireless Margins. On a reported basis, third-quarter wireless operating expenses totaled $10.2 billion, operating income was $2.4 billion and AT&T's wireless operating income margin was 18.9 percent versus 18.0 percent in the year-earlier third quarter. On an adjusted basis, third-quarter wireless operating expenses totaled $9.7 billion, operating income was $2.9 billion and AT&T's wireless operating income margin was 22.8 percent versus 26.4 percent in the year-earlier third quarter.

Wireline Operational

  • AT&T's total business revenues -- comprised of enterprise, regional and wholesale customer categories -- grew 0.3 percent versus the year-earlier quarter to $11.5 billion. In the third quarter, AT&T delivered a return to growth in wholesale revenues, extending a major turnaround of trends in this category over the past year.

  • Wholesale revenues totaled $3.5 billion, up 0.8 percent sequentially and 0.7 percent versus the year-earlier quarter. Regional business revenues increased 0.7 percent sequentially and 2.3 percent versus the year-earlier quarter to $3.2 billion.

  • Regional business data revenues grew 8.4 percent year over year, led by Ethernet and IP data services, including managed Internet and VPNs. IP data and Ethernet, which made up 53.6 percent of AT&T's regional business data revenues, grew 18.9 percent versus the year-earlier third quarter.

  • Enterprise revenues totaled $4.7 billion, up 0.8 percent sequentially and down 1.4 percent versus the year-earlier quarter, reflecting solid sales results with some pressures on voice and data transport volumes. Enterprise fundamentals in terms of closed sales, a strong sales funnel and new service adoption remain solid.

  • AT&T U-verse TV Services. experienced a net gain of 232,000 subscribers in the third quarter, up from 170,000 added in the second quarter of this year. At the end of the quarter, subscribers to the company's next-generation, IP-based TV service totaled 781,000, on a trajectory to exceed its target of more than 1 million U-verse TV subscribers by year-end 2008. U-verse network deployment now passes 14 million living units. Rollout of Total Home DVR service is under way and expected to be completed by the end of the year. Attach rates for broadband service continue to be high, at more than 85 percent.

  • 16.2 Percent Growth in Wireline IP Data Revenues. Driven by expansion in AT&T U-verse services and growth in business products such as VPNs, managed Internet services and hosting, AT&T posted its fourth consecutive quarter of strong mid-teens growth in total wireline IP data revenues. Consumer IP data revenues, which include broadband and U-verse services, grew 19.0 percent, and business IP data revenues were up 14.7 percent. IP data now accounts for 44.0 percent of AT&T's total wireline data revenues.

  • Broadband Connection Growth. At the end of the third quarter, AT&T's wireline broadband subscribers totaled 14.8 million, up 148,000 in the quarter and 1.1 million over the past year.

  • Growth in Regional Consumer ARPU. Reflecting growth in wireline broadband and U-verse services, AT&T's revenues per consumer household served increased 4.3 percent versus the year-earlier third quarter. Regional consumer revenue connections (retail voice, high speed Internet and video) totaled 47.5 million at the end of the quarter versus 49.6 million at the end of the third quarter of 2007 and 48.4 million at the end of the second quarter of 2008. Total consumer broadband and TV connections over the past year increased by 1.9 million.

  • Total regional consumer revenues were $5.5 billion, down 3.8 percent. This reflects operational trends and a change in AT&T's relationship with Yahoo!, which provides portal services to AT&T's nearly 15 million wireline broadband subscribers. Under the new arrangement, announced in the second quarter of 2008, AT&T no longer pays monthly portal fees and receives a reduced level of shared advertising revenues from Yahoo!

  • Wireline Expenses. AT&T's reported third-quarter wireline operating expenses totaled $14.8 billion, down 1.1 percent from results in the year-earlier quarter, and on an adjusted basis, wireline operating expenses were $14.4 billion versus $14.4 billion in the third quarter of 2007. In addition to operational trends and progress on cost initiatives, third-quarter wireline cost trends also include expenses of approximately $90 million related to hurricanes.

Verizon Business Expands Carrier Ethernet with 10 GigE

Verizon Business is expanding its Carrier Ethernet service portfolio with a standardized 10 GigE offering for its Metro Ethernet service in the U.S. Previously, 10 GigE speed -- the fastest commercially available -- had been available from Verizon Business only on a customized basis.

The company now offers 10 GigE for Ethernet LAN Service (E-LAN) and Ethernet Virtual Private Line (EVPL) to customers in Verizon's sprawling U.S. footprint in 100 metro markets, building on the company's existing 10 GigE-capable Ethernet Private Line and optical offerings.

Verizon Business said that by standardizing 10 GigE as a service offering, U.S.-based companies with multiple locations and distributed data centers more quickly and easily consolidate their network infrastructure, virtualize their IT environment and efficiently transmit bandwidth-intensive applications such as high-definition video conferencing and medical imaging.

"10 GigE hits the sweet spot for companies wanting to make the most of their IP networking capabilities for advanced applications that can be true bandwidth hogs," said Nancy Gofus, senior vice president of global business products for Verizon. "Now, these on-demand applications can work harder and smarter across multiple locations across town, featuring the classes of service, service level agreements and security associated with Verizon Business' global Ethernet portfolio."

Verizon's portfolio of Ethernet services features:

  • Metro Ethernet Services (E-LAN and EVPL) -- available within 100 metro markets in the U.S.

  • Virtual Private LAN Service (VPLS) -- available virtually anywhere in the U.S.

  • Ethernet Private Line (EPL) -- available within 145 U.S. metro markets and in many locations in 21 European countries.

  • Ethernet Virtual Private Line (EVPL) -- available virtually anywhere in the U.S. and in many locations in six Asia-Pacific countries and territories, as well as between the U.S and six Asia-Pacific regions, and between the U.S. and 10 European countries.

  • Ethernet Access for Private IP and the public Internet -- available virtually anywhere in the U.S, within 20 European countries, 13 countries in Asia-Pacific and four countries in Latin America and Canada.

Telefonica and Boingo Sign Wi-Fi Access Deal

Boingo Wireless and Telefónica announced a Wi-Fi roaming agreement. The deal gives Boingo members access to nearly 2,600 incremental hotspots in Spain and elsewhere. Additionally, Telefónica customers will be able to login to 7,000 Boingo hotspots throughout the world, including more than 20 of the top airports in North America.

Telefónica operates the largest roaming network in Spain with close to 2,200 hotspots. Telefónica Spain is the first affiliate within the Telefónica Group to launch with Boingo, and is now available for Boingo customers. Telefónica Argentina with 400 hotspots, will join the Boingo Roaming Network in the very near future.http://www.boingo.com

Rackspace Acquires Two Start-ups in the Cloud Hosting Space

Rackspace Hosting announced its entrance into the cloud hosting space through the acquisition of two start-ups -- Slicehost and Jungle Disk. The purchase price of the combined acquisitions is approximately $11.5 million payable in cash and stock, with the potential for up to $16.5 million in additional payouts of cash and stock based on certain performance criteria.

Slicehost is a leader in Xen-based virtual machine hosting with more than 15,000 "slices" online today.

Jungle Disk offers cloud storage solutions that allow users to share cloud storage between multiple users through a secure, mountable network drive and automatic backup.

Rackspace said it intends to integrate capabilities from both acquisitions into its hosting portfolio. Rackspace's cloud strategy is now supported by three core offerings, all part of Mosso, Rackspace's Cloud Hosting Division. The company's existing Hosting Cloud and CloudFS storage offerings have been re-branded to reflect the company's newly integrated approach:

  • Cloud Sites -- Rackspace's flagship cloud offering, The Hosting Cloud, is now Cloud Sites. Developed by Mosso, Rackspace's cloud division, it offers a scalable platform for handling huge traffic spikes and a pay-as-you-grow pricing model. Cloud Sites is a heterogeneous environment, supporting both Windows and Linux.

  • Cloud Files -- Rackspace's internet-based storage service, CloudFS, is now Cloud Files. Cloud Files gives developers instant access to an enterprise-grade storage infrastructure. Cloud Files offers an SLA and a highly competitive pricing model with replicated storage starting at $0.15/GB. Also later this year, Limelight Networks will team with Rackspace to allow developers to easily distribute content to millions of end users around the world and bring scalable content delivery and application acceleration services to the masses. While continuing to support the Amazon S3 platform, Jungle Disk will port to Rackspace's Cloud Files system in the coming months. Jungle Disk comes in both desktop and workgroup editions across the Windows, Mac and Linux platforms.

  • Cloud Servers -- This new hosting solution, which will deliver on-demand server capacity to businesses of all sizes, will leverage key technology developed by Slicehost, which uses Xen virtualization software. Slicehost will remain as the company's developer brand, creating innovative new features driven through shared intellectual property in conjunction with development initiatives from Rackspace. As part of the announcement, Slicehost also announced new, larger slices for high performance computing, lower prices as well as IP sharing for high availability computing.

"Cloud computing offers tremendous benefits to our customers that complement our traditional managed hosting services," said Lanham Napier, CEO, Rackspace Hosting. "Being a leader in hosting means being a leader in the cloud. Today, we made clear our intent to have the best suite of cloud offerings. Our new offerings are part of a strategy to bring cloud benefits to all businesses with simple, cost-effective products that everyone can use, backed by the best customer support that only Rackspace can deliver."

"On-demand computing is the new foundation of hosting," said Jason Seats, founder, Slicehost. "Rackspace gives us the ability to expand the Slicehost offer and meet the needs of the corporate world whose interest in cloud technologies has only just begun. In addition, no one else shares our customer first service philosophy more than Rackspace. It is an obvious fit."http://www.mosso.comhttp://www.rackspace.com

ADC Trims Financial Guidance, Product Lines, Workforce

ADC updated its financial guidance and unveiled plans to realign its business operations with areas of strategic focus in light of "the uncertainties presented by the current macroeconomic environment. "

ADC currently expects sales from continuing operations for fiscal year 2008 to be in the range of $1.470-$1.495 billion. Previous annual guidance provided on Sept. 4, 2008 reflected ADC's earlier expectation that fiscal 2008 sales would be in the range of $1.500-$1.520 billion. ADC now expects to have 11%-13% year-over-year sales growth for fiscal year 2008, which would result in a 21%-22% five-year compound annual growth rate since 2003.

Due to changes in sales volume and other factors, ADC's gross margins in 2008 are now expected to be approximately 34% for the full year compared to previous guidance of approximately 35%.

ADC also announced plans to divest the company's EMEA Professional Services business and to discontinue certain unprofitable outdoor wireless product families in its Network Solutions business unit. The company is also streamlining the organizational structure of its Global Connectivity Solutions business unit to better align with customer needs and marketplace trends and to reduce costs.

"ADC remains firmly committed to delivering long-term value to our shareholders despite the uncertain macroeconomic environment," said Robert E. Switz, chairman, president and CEO of ADC. "While we are altering our short-term outlook and planning for moderately lower revenues in fiscal year 2009 based upon lower industry forecasts, it is important to recognize that ADC has a strong balance sheet and continues to generate positive operating income and cash flows. We also maintain a strong position in the high-growth segments of fiber-based and wireless communications networks.http://www.adc.com

Equinix Plans Construction of New Data Centers in London, Singapore

Equinix announced plans to build a new 300,000 square foot data center in London and a new 110,000 square foot data center in Singapore. The expansions come at a time when demand in the London and Singapore markets continues to outpace supply, providing a favorable pricing environment, and as businesses are increasingly challenged to meet the growing power requirements of their IT operations. The company said the expansion plan is fully funded.

The site selected for the London expansion (LD5), located in the suburb of Slough, will augment Equinix's four other centers in the London market. It has the capacity for multiple phases, enabling Equinix to fully build out the site over time as demand warrants. Capital expenditures for the initial phase of the build out are expected to range between $80 million and $90 million, of which $60 million will be spent by the end of 2009.

The new Singapore center (SG2), located in the western region of Singapore, will also be built out in phases, with capital expenditures for the initial phase expected to be approximately $45 million, which will be spent by the end of 2009. It will provide additional capacity to Equinix's existing SG1 center located in the southern region of Singapore.

"Despite the challenges of the current global economy, Tier 1 Research is forecasting continued strong demand in the data center and colocation services market globally, given the supply-demand imbalance that has existed for the last several years in most markets, including London and Singapore," said Dan Golding, vice president and research director at Tier 1 Research. "In fact, our belief is that downward pressure on the economy favors colocation providers, as companies forego the significant capital expenditures needed to develop their own internal data centers."http://www.equinix.com

Comcast Begins Rollout of 50 Mbps DOCSIS 3.0 Service

Comcast announced the launch of DOCSIS 3.0 "wideband" Internet access service in New England, including the Extreme 50 tier at up to 50 Mbps. In the next few weeks, the service will be rolled out to homes and businesses in parts of New England, including the Boston Metropolitan region and Southern New Hampshire, as well as areas of Philadelphia and New Jersey. These services also will be available in the Twin Cities where wideband was launched earlier this year.

Comcast said it plans to continue to roll out wideband across its footprint and expects to reach more than 10 major markets and pass nearly 10 million homes and businesses in the next several months.

"Wideband is a game-changer for the industry. With wideband running over our next-generation fiber-optic network, we can greatly enhance our customers' online experience immediately. And these speeds are only a preview of what's to come--wideband will provide the capability of delivering dramatically faster speeds in excess of 160 Mbps in the future," said Mitch Bowling, SVP and General Manager, Comcast Online Services.

New Residential Tiers include:

  • Extreme 50, offering up to 50 Mbps of downstream speed and up to 10 Mbps of upstream speed at $139.95/month.

  • Ultra, offering up to 22 Mbps of downstream speed and up to 5 Mbps of upstream speed at $62.95/month.

In addition to the new speed tiers, Comcast also is increasing speeds for most of its existing customers. Performance tier customers will benefit from doubled downstream and upstream speeds, offering up to 12 Mbps and 2 Mbps, respectively.
Performance Plus customers will be upgraded to Comcast's Blast! tier, which will double their download speeds to up to 16 Mbps and provide up to 2 Mbps of upload speed.

New Business Class Tiers

The Deluxe 50 Mbps / 10 Mbps tier is priced at $189.95/month, which includes a full suite of features and support. As part of their service, Comcast Business Class customers receive Microsoft Communications Services, providing corporate-class e-mail, calendaring and document sharing, as well as additional benefits such as firewall protection, static IP addresses, multiple e-mail addresses and business class 24/7 customer support.

Existing business class customers also will receive complimentary speed increases--speeds on the Starter tier will be doubled to up to 12 Mbps / 2 Mbps and a new Premium Tier also will be introduced, offering speeds up to 22 Mbps / 5 Mbps for only $99.95/month.http://www.comcast.com/fastestfast

Equinix Posts Q3 Revenues to $183.7 million, up 77% YoY

Equinix, which operates network-neutral data centers, reported Q3 revenues of $183.7 million, a 7% increase over the previous quarter and a 77% increase over the same quarter last year, which includes an approximate negative $2.5 million impact as a result of a strengthening U.S. dollar during the quarter.

Recurring revenues, consisting primarily of colocation, interconnection and managed services, were $173.5 million, a 6% increase over the prior quarter and a 75% increase over the same quarter last year. Non-recurring revenues were $10.2 million in the quarter.

Cost of revenues were $109.9 million for the third quarter, an 8% increase over the previous quarter and a 75% increase over the same quarter last year. Cost of revenues, excluding depreciation, amortization, accretion and stock-based compensation of $39.3 million, were $70.6 million for the third quarter, a 7% increase over the previous quarter and a 75% increase over the same quarter last year. Cash gross margins, defined as gross profit plus depreciation, amortization, accretion and stock-based compensation, divided by revenues, for the quarter were 62%, the same as the previous quarter and up from 61% the same quarter last year.

"Despite the challenging economic environment, Equinix delivered another strong quarter," said Steve Smith, president and CEO of Equinix. "While we continue to closely monitor all aspects of the business, we believe that the strength of our continued demand and focus on business execution will allow us to extend our market leadership position."

Capital expenditures in the third quarter were $95.4 million, of which $13.5 million was attributed to ongoing capital expenditures and $81.9 million was attributed to expansion capital expenditures.http://www.equinix.com

Motorola Offer NBBS Management for its IPTV Set-Tops

Motorola introduced an NBBS device management system for its IPTV set-tops. Motorola NBBS is a scaleable, carrier-grade software platform that enables operators to remotely access, configure, monitor and troubleshoot a full portfolio of consumer devices, home networks and services. These include gateways, modems, webcams and now IP set-tops - namely, the VIP set-top series, adding more flexibility for service providers.

The NBBS platform supports multiple protocols such as TR-069, telnet and HTTP management interfaces for seamless integration into service providers' existing networks, including provisioning, billing and customer support across multi-vendor CPE. NBBS is also compatible with WiMAX and femtocell CPE.

Motorola said NBBS helps eliminate provisioning errors and customer frustration by automating the provisioning and management process for a wide range of devices with easy, zero-touch installation. NBBS then provides ongoing management and support for its IP customer premises equipment (CPE).

"Our goal in introducing the NBBS platform to Motorola's IP services suite is to offer our operator customers added value in the form of built-in installation and troubleshooting capabilities," said Alan Lefkof, corporate vice president and general manager, Broadband Solutions Group, Motorola.

Honda Demonstrates Motorcycle 2 CAR Communication

Honda demonstrated a motorcycle-to-car communication system that could be used to transmit positioning warnings to nearby vehicles as the rider approaches an intersection or if the vehicles are headed along a collision path. The system was demonstrated as part of the CAR 2 CAR Communication Consortium event taking place at the Opel Test Track in Dudenhofen, Germany, from 22-23 October 2008.

Honda's ad hoc wireless networking system generates warnings to riders and drivers of other vehicles by continuous exchange of positioning data from satellite GPS sources. The demonstration will exhibit the interoperability of the Honda life-saving system which facilitates communication with vehicles from 8 other manufacturers.http://www.honda.comhttp://www.car-to-car.org/

AT&T Highlights Q3 Updates to its Business Services

During the third quarter 2008, AT&T made the following updates to its portfolio of services for business customers.

Enterprise Mobility, Device Protection & Control -- AT&T introduced an over-the-air solution that allows customers to configure, monitor and enhance the security of AT&T smartphones through a single, hosted Web console. Device Protection & Control allows company telecom managers to install software, configure devices, receive diagnostic information and manage policy compliance. The solution is hosted by AT&T, so businesses don't have to invest in, install and maintain new hardware to protect and manage their wireless devices.

Expanded VPN Reach -- AT&T's VPN service is now available to business customers in Thailand, Indonesia and Malaysia.

Ethernet Access to VPN -- Ethernet access to AT&T VPN and Enhanced VPN services is now available to business customers in Luxembourg, Portugal and Poland.

Expanded IP DSL Access to VPNs -- AT&T IP Digital Subscriber Line customers in Canada and the Asia Pacific region can now access their company's VPN using the AT&T Network-Based IP VPN Remote Access Service and AT&T Virtual Private Tunneling Service. The expansion enables mobile workers for large and small companies to stay connected to their corporate networks regardless of their location around the world.

10 Gbps Speed for Ethernet Private Line WAN -- AT&T has added a 10 Gbps interoffice channel bandwidth option to its Ethernet Private Line Service for wide area networks (WAN) and Ethernet customers connecting to local area networks at the Layer 1 (physical) level. Now customers have a choice of Ethernet connection speeds, ranging from 50 Mbps to 10 Gbps, in up to 100 cities across the U.S. The higher speed also will help Ethernet Private Line customers making point-to-point connections to realize higher performance with low latency and jitter, which is critical to server synchronization and other delay-sensitive network applications.

AT&T Managed WAN Acceleration Service -- AT&T Managed WAN Acceleration Service enhances connectivity and transport services for AT&T VPN, Enhanced VPN and Managed Router Service clients around the world. It improves network resources through more efficient use of bandwidth, resulting in easier integration with new technologies, improved applications performance and better economies of scale from converged wireless and wireline services. This enhancement complements AT&T's existing asymmetrical application acceleration solutions that are centralized in an AT&T Internet data center.

AT&T Hosted Outbound Calling Service -- AT&T has introduced a network-based outbound calling service that allows contact center customers to off-load or load balance the demand on their contact center employees through an Interactive Voice Response platform. This new service supports automated collection and automated fraud notification applications. The platform will call out to a programmed list of customer clients and provide a preset voice notification depending on the application being used and the client situation.

Web Hosting for Small Businesses -- In addition to the Web site design services rolled out earlier this year, AT&T has added to its list of professional Web hosting services for small businesses to include support for site and database migrations, one-stop e-commerce site builds, database builds, expanded managed system administration and server administration and code execution monitoring and third-party code debugging and support. In addition, discount plans have been extended to customers who purchase new AT&T services such as AT&T High Speed Internet U-verse Enabled Business Edition and AT&T Tech Support 360. Discount plans were already available to AT&T access customers.

AT&T Billing Solutions Enhancements -- AT&T offered additional converged billing capabilities that are designed to simplify the billing process and improve accuracy by providing a single detailed invoice for certain AT&T products and services. Also, AT&T Enterprise Alternate Bill Media delivers solutions for customers wishing to simplify and maximize bill management.http://www.att.com