Wednesday, November 5, 2008

Deutsche Telekom Reports No Impact Yet from Financial Crisis

Deutsche Telekom's reported revenue for Q3 2008 declined by 1.5 percent to EUR 15.5 billion. On an organic basis, i.e. adjusted for exchange rate effects and excluding changes in the composition of the Group, revenue decreased by 0.9 percent in the third quarter. On a cumulative basis, i.e. in the first nine months of 2008, exchange rate fluctuations reduced revenue by around EUR 1.5 billion. Reported net profit in the third quarter increased by EUR 0.6 billion to around EUR 0.9 billion compared with the same period last year. Net profit adjusted for special factors increased by 12 percent to around EUR 1.2 billion.

Deutsche Telekom asserted that the financial crisis has not yet had an impact on its operations.

"Deutsche Telekom is well positioned in financial terms, our balance sheet ratios are good, and our short and medium-term funding is on a broad and solid footing. We have again made extremely good operational progress in the third quarter and are on the right track to achieving our targets for 2008," said René Obermann, Chairman of the Board of Management of Deutsche Telekom.

Some highlights for Q3:

Mobile Communications

  • Mobile communications remained the Group's growth drivers. Around 1.2 million new contract customers were added in the third quarter alone. Overall, the Mobile Communications companies in the United States as well as in Central and Eastern Europe achieved double-digit growth rates both in terms of revenue as well as EBITDA.

  • T‑Mobile Deutschland reported 271,000 net additions, 82 percent more than in the same period last year. In the first nine months of 2008, growth of 19 percent was recorded, taking the total of new contract customers to 685,000. A significant driver of the encouraging development in the past quarter was the iPhone 3G, which was in extremely high demand following its launch on July 11.

  • T‑Mobile Deutschland reported revenue of EUR 2.0 billion in the third quarter, down 2.8 percent on the same period last year.

  • T‑Mobile USA's results in the third quarter were again significantly affected by the weak U.S. dollar exchange rate. Measured in euros, the company reported a rise in revenue in the third quarter of 2.7 percent and growth in adjusted EBITDA of 1.0 percent.

  • As of the end of September, T-Mobile USA had 32.14 million customers. Including the customers from the acquired company SunCom, this represents an increase of 4.4 million customers within a year. At 670,000, the number of new customers in the third quarter was on a par with the previous quarter.

  • T‑Mobile UK's financial figures are being negatively impacted by tough competition, a weak sterling exchange rate and regulatory intervention in the market. In local currency, revenue in the third quarter fell 6.7 percent year-on-year to GBP 0.8 billion. Adjusted EBITDA decreased by 29.4 percent to GBP 175 million. The rate plans launched in May have been well received by the market. With 96,000 contract additions,

  • The companies in Central and Eastern Europe continue to drive growth in Mobile operations. Revenue in the third quarter increased by 14.8 percent, while adjusted EBITDA climbed as much as 18.9 percent.

  • The trend toward mobile data usage continues unabated. The European national companies recorded revenue -- excluding text and multimedia messaging -- of EUR 380 million between July and September 2008, which represents year-on-year growth of 45.3 percent. The number of web'n'walk customers climbed 67.2 percent to 4.7 million. Including occasional mobile Internet users, i.e. those without data contracts, the figure is much higher -- 13 million.

  • Data revenue in the United States, including messaging, increased by 27.6 percent to US$833 million.

Broadband/Fixed Network

  • T‑Home claimed a 49 percent DSL net add market share in the third quarter, this was the highest level reported by the company since the launch of the resale DSL offer in 2004. Of the 344,000 new DSL customers, around 50,000 were customers returning from competitors. This brings the total of DSL customers won back from resale providers and other network operators to around 150,000 since the beginning of the year.

  • The IPTV service, Entertain, now has around 333,000 customers -- an increase of 33 percent within a single quarter.

  • The number of line losses for the full year is forecasted at 2.5 to 3.0 million. This includes losses due to regulatory measures as well as on technical grounds as a result of the migration of DSL resale customers to All-IP. At 1.8 million in the first nine months of 2008, the number of line losses was at the lower end of this guidance. With 574,000 in the third quarter, the number of line losses was at an annual low.

  • The decline in revenue in the domestic market by 5.9 percent year-on-year to EUR 4.7 billion in the third quarter is primarily attributable to line losses and a drop in call revenues as a result of the higher take-up of flat rate offers. EBITDA decreased by 5.4 percent in the same period to EUR 1.6 billion. On a nine-month basis, revenue declined 5.5 percent and EBITDA 1.6 percent. T‑Home's cost base was reduced by EUR 0.7 billion year-on-year, mainly driven by the "Save for Service" program.

  • Revenue from international business at T-Home declined, chiefly due to the deconsolidation of T-Online France and T-Online Spain in the previous year. The adjusted EBITDA margin of the fixed-network companies in Central and Eastern Europe in the first nine months of 2008 was 42.9 percent compared with 36.4 percent in the same period last year. Broadband growth and positive exchange rate effects at national companies in Eastern Europe did not fully compensate for the decline in the traditional fixed network. At the end of September, the number of IP-TV customers in Eastern Europe was at 164,000, driven mainly by Croatia, with a total of 92,000.

Business Customers

  • T‑Systems' international business saw revenue growth of 5.4 percent. This was primarily attributable to major international outsourcing agreements. In Germany, the business customer arm posted an overall decrease of 12.9 percent to approximately EUR 6.1 billion. This was chiefly due to the sale of Media & Broadcast and the reassignment of ActiveBilling to T-Home, as well as the ongoing price erosion in the telecommunications and IT business.

Ekinops Introduces 40G Wave Bonding Technology

Ekinops introduced 40 Gbps capabilities for its multi-reach long-haul, regional, and metro transport aggregation platform. The new 40G Wave Bonding technology provides the ability to transport both native 40G and 4 x 10 Gbps payloads.

The first application of the Wave Bonding technology will target higher channel counts at 10G using a 4x10G Muxponder to multiplex four 10G payloads onto a 40G wavelength. Wave Bonding will allow Ekinops to achieve up to 320 channels, all in the C-Band spectrum, at 10G.

Ekinops said that because other 40 Gbps systems don't transmit as far as 10G systems, customers who want to move up from 10G to 40G over longer links find that they need to install regeneration equipment. Ekinops' Wave Bonding technology enables delivery of 40G with essentially the same performance characteristics as its 10G transmission. That includes the ability to reach hundreds of kilometers with no in-line amplification and a total distance of 2,000 kilometers with full channel counts on the Ekinops 360 transport system.

In addition to the use of Wave Bonding, Ekinops said it is leveraging new "DynaFEC" technology to enable 40G to achieve a reach similar to 10G. DynaFEC is the highest-gain forward error correction technology on the market, according to the company, allowing for cost-effective transport by providing gain through software rather than more expensive hardware components.

The initial offering in early 2009 features a 4x10G muxponder, enabling 160 channels of 10G transmission. Later in 2009, Ekinops will deliver a 40G serial interface, and at that point be able to offer 320 channels of 10G, or 80 channels of 40G, all in the C-Band spectrum.
  • Ekinops' technical team is led by Jean-Luc Pamart, an FEC expert who has been awarded 7 patents in optical transmission. Before joining Ekinops, Mr. Pamart was Director of Hardware Development at Corvis-Algety in Lannion, France. Previous to that, he held various R&D positions at Alcatel within its Submarine and Terrestrial Division, and Optical Network Transmission business unit.

Sonus Sees Revenues Decline 18% YoY to $62 Million

Sonus Networks reported Q3 revenue of $62.2 million, compared to $87.8 million in the second quarter of fiscal 2008 and $75.8 million for the third quarter of fiscal 2007, a decrease of 18% year over year. The company's loss from continuing operations on a GAAP basis was $19.0 million, or $0.07 per share, for the third quarter of 2008, compared to GAAP income from continuing operations of $3.5 million, or $0.01 per diluted share, for the second quarter of 2008, and a GAAP loss from continuing operations of $26.6 million, or $0.10 per share, for the third quarter of 2007.

"We had a challenging quarter, and are disappointed with our results," said Richard Nottenburg, president and CEO of Sonus Networks. "We experienced a downturn during September that impacted our revenue and earnings performance. We have maintained a strong cash position and a stable financial platform which allow us to focus on managing the business through the current economic climate."

AT&T to Acquire Wayport; Adding Thousands of Wi-Fi Hotspots

AT&T agreed to acquire privately-held Wayport, a provider of managed Wi-Fi services, for approximately $275 million in cash.
The acquisition expands the AT&T Wi-Fi footprint to nearly 20,000 domestic hotspots, takes the company's global Wi-Fi presence to more than 80,000 locations, and creates thousands of new ways for customers worldwide to stay in touch.

Key Wayport hotspots are in key locations, including select Wyndham, Marriott Vacation Club and Four Seasons hotels; HealthSouth and Sun Healthcare locations; plus McDonald's restaurants.

The acquisition also complements AT&T's mobile access options for businesses. As Wayport currently provides back-office management for AT&T's Wi-Fi Hot Spots, the acquisition expands such capabilities and brings management of Wi-Fi infrastructure completely under AT&T management.

"We're seeing exponential growth of Wi-Fi-enabled devices -- such as smartphones -- combined with a continued dependency on 24/7, anytime, anywhere Internet access across business and consumer market segments," said John Stankey, president and CEO, AT&T Operations. "Now is the right time for AT&T to affirm our commitment to Wi-Fi leadership. By acquiring Wayport, we're giving consumers more ways to stay in touch and building a more robust network management solution for businesses. We're bringing ready access to the nation's leading Wi-Fi, wireless and IP networks -- on a global scale."http://www.att.com
  • Wayport is based in Irving, Texas and was founded in 1996. Major investors included Sevin Rosen Funds, INVESCO Private Capital, New Enterprise Associates, BA Venture Partners and Trellis Partners. Other Wayport investors included Lucent Venture Partners, GC Technology Fund, Sanders Morris Harris, Star Ventures and GIC.

  • Wayport's roaming partners have included AT&T, Verizon Business, Sprint, iPass, Boingo, Fiberlink, WeRoam, and Trustive.

AT&T to Offer New 18 Mbps U-verse DSL Service

AT&T is planning to boost its U-verse Internet service to a maximum downstream speed of 18Mbps beginning on November 9. The speed tier will be offered exclusively available for AT&T U-verse TV customers. AT&T U-verse High Speed Internet Max 18 will be available to eligible residential customers for $65 a month as part of a bundle with AT&T U-verse TV. Professional installation is included for new U-verse TV customers, and eligible existing U-verse Internet customers can upgrade their package at any time without additional installation costs or appointments.

Alcatel-Lucent Names former Sun Exec to Head its EMEA Division

Alcatel-Lucent has appointed Adolfo Hernandez as head of the newly created Europe, Middle East and Africa Region effective December 1st, 2008. He will report to Alcatel-Lucent CEO Ben Verwaayen. Most recently, Adolfo Hernandez was Senior Vice President of Sun's Global Services Practice, where he was accountable for global services revenue, margin and overall business objectives around the world.

Cisco Launches a Go-to-Market Program for Global Channel Partners

Cisco is launching a go-to-market program designed to help its channel partners collaborate with each other to better serve multinational customers. Up until now, many multinational customers expanding internationally have engaged in separate transactions with local Cisco resellers in each country of their operations. The new program is built around a transaction-based partner collaboration model.

Specifically, the Cisco Global Resale Agent model provides each "host" partner with policies, processes and tools that enable it to select another Cisco partner as an agent in a different country. The agent can act on the host partner's behalf for the resale of Cisco technologies to new multinational customers.

Cisco said this new model provides local partners with "global rights" to select another partner in a different geography to deliver Cisco technology solutions on its behalf. After the host and agent partner engage in and complete a business transaction, the local partner buys the Cisco solution and invoices the customer locally.

Cisco Debuts 20 Gbps ASR 1000 Embedded Services Processor

Cisco significantly boosted the performance of its recently-launched ASR 1000 Series Aggregation Services Router with a new 20-Gbps Embedded Services Processor (ESP). The release doubles the service processing rate and delivers software enhancements that increase application control and performance.

The ASR 1000 Series, which was introduced in March 2008, is powered by the company's 40-core "QuantumFlow" processor and designed for massive scalability in packet intelligence in both service provider and enterprise networks. The platform packs up to 20 million packet per second (PPS) forwarding rate performance in a compact single router platform. As such, the ASR 1000 could be used to consolidate a number of networking appliances, including firewall, IPSec VPNs, deep-packet inspection (DPI) and Session Border Controllers (SBC).

The new enhancements include:

  • 20 Gbps Cisco ASR 1000 Series ESP High-Performance Security Services: Integrated high-performance firewall, virtual private network (VPN), and Network Access Translation (NAT) services with up to 20 Gbps throughput, up to 8 Gbps Internet Protocol Security (IPsec) encryption and up to 10,000 VPN tunnel services.

  • WAN Optimization (WCCPv2) Application-Aware Capabilities on the Cisco ASR 1000 Series: Enhanced network performance and dynamic optimization for business-critical applications such as enterprise resource planning (ERP) and customer relationship management (CRM). Network-Based Application Recognition (NBAR) is offered to help customers identify, prioritize, limit or block more than 60 applications, including Skype and instant messaging, so that compliance requirements and an optimum performance of mission-critical applications can be maintained.

  • Integrated Threat Control on Cisco ASR: Rapid first line of defense against network threats with multigigabit flexible and granular Layer 2-7 Flexible Packet Matching (FPM).

  • Enhancements to Cisco Security Manager: Simplified and accurate system-management capabilities for Cisco ASR 1000 platform-level instrumentation and onboard usability tools. Customers benefit from improved operational efficiencies when configuring, managing and troubleshooting network issues.

The Cisco Embedded Services Processor for the Cisco ASR 1000 Series is generally available now with U.S. list price of $50,000.

AT&T Reports Largest Text Messaging Spike (+44%) on Election Night

AT&T reported that in the hour following the announcement, text messaging traffic across its network surged about 44% -- the highest spike in company history.

The peak transactions per second following Tuesday's announcement was significantly higher than the peak transactions per second logged for the most recent New Year's Eve, a day that consistently ranks among the busiest texting days for AT&T.

"The spike on Tuesday night rang true for us," said Mark Collins, vice president of Voice and Data Services, AT&T Mobility & Consumer Markets. "Texting has become so valuable a communication tool that it is how people are sharing thoughts and information and connecting with each other in even the most important moments."

Qualcomm Posts Quarterly Revenue of $3.33 billion, up 45% Year-over-Year

Qualcomm reported quarterly revenue of $3.33 billion, up 45 percent year-over-year and up 21 percent sequentially. Net income was $878 million, down 22 percent year-over-year and up 17 percent sequentially. Diluted earnings per share were $0.52, down 22 percent year-over-year and up 16 percent sequentially.

For its full fiscal 2008, Qualcomm posted revenue of $11.14 billion, up 26 percent year-over-year, and net income was $3.16 billion, down 4 percent year-over-year.

"I am very pleased with the performance of our businesses this past year, particularly the strong execution of our chipset business and our successful settlement with Nokia. While we continue to see strong growth in 3G CDMA, the current macroeconomic conditions and potential for further economic slowdown creates an uncertain business environment for the next few quarters," said Dr. Paul E. Jacobs, chief executive officer of Qualcomm. "As a result of the credit crisis and the economic uncertainty, our guidance reflects slower end- market device growth for 2009 than previously anticipated and a significant contraction in channel inventory in the first and second fiscal quarters. While we are estimating strong growth for CDMA-based devices in calendar year 2009, driven by a shift to emerging markets, this growth is meaningfully less than we would have forecast just a few weeks ago."

Telefónica Deploys 40G Backbone with Huawei

Telefónica de España has deployed its first 40G transmission network using equipment from Huawei Technologies. The network' s WDM optical rings will enable high-bandwidth and intelligent transmission and more flexible dispatch. Deployment details were not disclosed.

Huawei' s solution leverages ROADM technology, which guarantees flexible provisioning, and is ready to activate advanced network Control and Management Planes based on GMPLS.