Tuesday, August 3, 2010

Ikanos Reports Q2, Restructuring, New CEO

Ikanos Communications reported Q2 revenue of $55.6 million compared with revenue of $57.4 million for the first quarter of 2010 and revenue of $22.4 million for the second quarter of 2009.

"Ikanos' revenue for the second quarter of 2010 was just below our guidance," said Dennis Bencala, chief financial officer of Ikanos. "Overall, Ikanos' revenue continued to be well diversified by region. Our core VDSL business also saw double digit sequential revenue growth from first quarter to second quarter 2010. In contrast, revenue from ADSL products decreased. What we now see as a sustained decline in the market for these ADSL products led us to write down inventory by $12.9 million during the second quarter, which reduced gross margin by 23% and 11% to 24% and 31% respectively on a GAAP basis, for the three and six months ended July 4, 2010."

Ikanos announced a restructuring plan that will result in approximately a 20% headcount reduction, which will take place in the third and fourth quarter. The restructuring plan is contemplated to include the closing of three overseas offices. The company estimates this will result in an annual operational cost savings of approximately $15 million in 2011.

In addition, Ikanos named John Quigley as its new president and chief executive officer. Prior to joining Ikanos, Quigley was senior vice president at Cambridge Silicon Radio which acquired SiRF Technology where Quigley was the senior vice president general manager of the wireless business unit. Prior to SiRF, Quigley was the vice president of Engineering for Airgo Networks (now Qualcomm).

Clearwire Introduces iSpot 4G Mobile Hotspot

Clearwire has expanded its line of personal mobile hotspots with a new "iSpot" device with dedicated support for Apple's line of mobile devices, including the iPad, iPod touch and iPhone. iSpot users can share 4G speed with up to eight Wi-Fi-enabled Apple mobile devices simultaneously. Clearwire reports average mobile download speeds of 3 to 6 Mbps with bursts over 10 Mbps on its WiMAX network. Clearwire offers unlimited usage, enabling, for example, an iPad user to stream unlimited movies or television shows via the Netflix app from home, work or on the go.

Clearwire Cites Sales Surge, Adds 722,000 Subscribers in Q2

Clearwire added 722,000 net subscribers in Q2, bringing the total number of customers on the network to 1.7 million. Of this, wholesale customer additions for the quarter were 595,000, bring the number of wholesale customers to 752,000 at the end of the quarter -- and the number of wholesale customer subsequent surged past the one million mark during July.

As a result of the strong sales, Clearwire has increased it guidance for the full year.

"As of today, Clearwire has more than one million wholesale subscribers and just under one million retail subscribers on the country's first 4G network. By the end of 2010 we now expect to have approximately 3 million total subscribers, a significant increase from our previous guidance of just over 2 million subscribers. The pent up wave of demand for mobile broadband service is evident, and Clearwire is riding our expanding 4G network and growing wholesale distribution model towards a promising second half of 2010," said Bill Morrow, Clearwire's CEO.

Clearwire said the dramatic increase in wholesale subscribers includes users of multi-mode 3G/4G devices in areas where it has not yet launched 4G service but from whom it receives nominal revenue. As of June 30, approximately 52% of the company's wholesale subscribers resided outside of Clearwire's currently launched markets.

At the end of the second quarter, Clearwire's global network covered areas where approximately 62 million people reside, including international and domestic pre-4G coverage. The Company's domestic 4G coverage reached approximately 56 million people as of June 30.

Revenue for the second quarter was $122.5 million, a 93% increase over second quarter 2009 revenue of $63.6 million. Retail average revenue per subscriber (ARPU) was $41.58 in the second quarter. While wholesale subscriber growth was strong, wholesale revenue reflects the impact of nominal pricing for wholesale subscribers outside of our markets, and includes only one month of results from the strong launch of the Sprint HTC EVO on June 4.

Retail cost per gross subscriber addition (CPGA) improved to $443 in the second quarter, down from $524 in the second quarter 2009. Retail monthly churn was 3.2% in the second quarter.

The second quarter 2010 net loss attributable to Clearwire was ($125.9) million, or ($0.61) per basic share, and includes the impact of $79.0 million incurred in the second quarter, or ($0.09) per share, related to inventory allowance increases and write-offs. The second quarter 2009 net loss attributable to Clearwire was ($73.4) million, or ($0.38) per basic share.

Clearwire to Test LTE, Considers WiMAX Coexistence Strategy

Clearwire announced plans to conduct LTE technical trials this year as it considers its WiMAX strategy going forward. Specifically, Clearwire will conduct trials with Huawei Technologies and with Samsung Electronics to test multiple coexistence scenarios between LTE and WiMAX radio technologies. The company restated its commitment to use WiMAX technology for its current 4G build plan, but said the significant number of LTE devices coming to market leads it to consider how it can potentially add LTE to its network to coexist with WiMAX.

During the trials, Clearwire will collaborate with Beceem, and other partners, to determine the best methods for enabling end-user devices to take advantage of a potential multi-mode WiMAX/LTE network. Other participating vendors for Clearwire's technical trials are expected to be named at a later date.

In addition, due to the global dominance of the 2.5 GHz - 2.6 GHz spectrum band, a number of large wireless operators are expected to participate with Clearwire on these tests. Additional details about those companies are also expected to be disclosed at a later date. The tests will be conducted in the fall and throughout early 2011 in Phoenix, Arizona.

Clearwire outlined the following test scenarios:

FDD LTE: Clearwire intends to conduct FDD LTE (Frequency Division Duplex) tests using 40 MHz of spectrum, paired in 20 MHz contiguous channels, of its 2.5 GHz spectrum. Clearwire expects to confirm the capability to produce real-world download speeds that range from 20-70 Mbps. This is expected to be significantly faster than the 5-12 Mbps speeds currently envisioned by other LTE deployments in the U.S., which will rely on smaller pairs of 10 MHz channels or less.

TDD LTE: Clearwire will concurrently test TDD LTE (Time Division Duplex), in a 20 MHz configuration, which is twice the channel size currently used in its 4G WiMAX deployments.

WiMAX and LTE: Clearwire will also test WiMAX co-existence with both FDD LTE and TDD LTE to confirm the flexibility of its network and spectrum strength to simultaneously support a wide-range of devices across its all-IP network.

Google Drops Google Wave

A little over one year after unveiling its new "Wave" paradigm for rich IP communications, Google had decided to drop the project. Google Wave was an HTML 5 application for integrating email, instant messaging, whiteboarding, wikis, blogging, Twitter and social networking. However, Google said that the service has not generated the user interest or enthusiasm that it wished. Google will not continue to pursue Wave as a standalone product.http://googleblog.blogspot.com/

Pyramid: U.S. Mobile Revenue to Overtake Fixed-Line by 2015

Mobile revenue in the U.S. will surpass all fixed-line services in the country by end of 2015, according to a new report from Pyramid Research. The U.S. is expected to add 80 million mobile users over the period -- the most of any developed country.

Pyramid is forecasting that service revenue in the U.S. will reach $362 billion in 2010, making the U.S. more than twice as large as the next most sizable markets - Japan and China - throughout the forecast period. Over the next five years, Pyramid expects total communications service revenue to grow at a CAGR of 2.53 percent to reach $410.2 billion in 2015.

East Africa's EASSy Submarine Cable Offer 1.4 Tbps Capacity

E-Marine was awarded a maintenance and storage agreement with the East African Submarine System (EASSy), a fiber-optic cable that will serve twenty-one African nations. E-marine will now take responsibility for maintaining up to an 8,600km-strech of the EASSy submarine cable network. It will also provide secure storage for supplies and accessories in its Bonded Cable Depot in the Port of Salalah, Oman.

E-Marine owns three Cable Ships and One Special Purpose Cable laying support vessel.
  • As of 19-July-2010, all the Eassy landing stations have been completed, tested and are fully operational. Construction of the 1.4 Tbps, 10,000km submarine cable project was completed on time and on budget, according to the WIOCC, the specially-created investment company owned by 14 African telcos, although planning for the project had begun before the SEACOM cable was envisioned and deployed.

  • The nine landing countries for the EASSy cable are: South Africa, Mozambique, Madagascar, the Comores, Tanzania, Kenya, Somalia, Djibouti and Sudan.

  • EASSy Consortium Members include Bharti Airtel (India), Botswana Telecom, BT (UK), Comores Telecom (Union of Comoros), Etisalat (United Arab Emirates), France Telecom, Mauritius Telecom, MTN International Group (India), Neotel (South Africa), Saudi Telecom, Sudatel (Sudan), TTCL (Tanzania), Telkom South Africa/Vodacom (South Africa), Telma (Madagascar), and Zambia Telecom.

  • Alcatel-Lucent was the lead supplier for the EASSy project
  • In July 2010, Main One Cable has activated commercial service on its new 7,000 km undersea cable connecting West Africa to Europe. The terabit capacity cable has landing stations in Nigeria and Ghana and branching units in Morocco, Canary Islands, Senegal and Ivory Coast. The company, which is wholly African, calculates that its cable offer more than ten times the bandwidth of what was previously available. Tyco Electronics Subsea Communications (SubCom) was the lead contractor on the Main One project.
  • In July 2009, SEACOM's 17,000 km, submarine fiber optic cable system entered into commercial service, linking south and east Africa to global networks via India and Europe with 1.28 Terabit per second (Tbps) of capacity. Backhauls linking Johannesburg, Nairobi and Kampala with the coastal landing stations have been established and SEACOM is also working with its national partners to commission the final links to Kigali and Addis Ababa shortly. The entire system will be operated and controlled through SEACOM's Network Operations Centre which is based in Pune, India. The SEACOM system was designed and installed by Tyco Telecommunications.
  • In July 2010, a fault with a undersea repeater system on the Seacom cable disrupted Internet traffic in east Africa for three weeks.