Wednesday, October 20, 2010

Google Builds Fiber Broadband Network on Stanford Campus

As the next step in its FTTH broadband project, Google will build an ultra-high speed broadband network to approximately 850 faculty- and staff-owned homes on the Stanford University campus. Google confirmed that it is still moving ahead with its municipal fiber project in the U.S.

ADVA Posts Q3 Revenues of EUR 80.5 million

ADVA Optical Networking reported Q3 2010 revenues of EUR 80.5 million, slightly above guidance of between EUR 75 million and EUR 80 million, up a significant 38.6% vs. Q3 2009 at EUR 58.1 million and up 17.4% vs. EUR 68.6 million reported in Q2 2010. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR 4.4 million or 5.5% of revenues in Q3 2010, at the upper end of guidance of between 2% and 6% of revenues.

"We are extremely pleased with our Q3 2010 revenues of EUR 80.5 million, which slightly exceed guidance and are up strongly, 17.4% vs. the previous quarter and a significant 38.6% vs. Q3 2009. The quarter-on-quarter development is driven by higher sales in the enterprise business, specifically in the North American region, and the year-on-year progress also by a pick-up in our Ethernet access and carrier infrastructure businesses. Q3 2010 pro forma gross margin at 40.0% of revenues came in below the 41.0% seen in the previous quarter. This reduction is largely due to the strategic investments in new customers and market segments with lingering impact on our foreign exchange exposure," commented Jaswir Singh, chief financial officer & chief operating officer of ADVA Optical Networking.

BT To Expand Ultra-Low Latency Capabilities to Europe

BT is pursuing plans to offer ultra-low latency connectivity into continental Europe for financial firms. In particular, BT Radianz Ultra will provide Paris-to-London sub-millisecond access to market data and execution services, exchanges and Multilateral Trading Facilities (MTFs). A similar offering is currently available in the New York and Chicago markets.

Verizon Business Lands U.S. GSA Contract for Cloud Services

Verizon Business announced a new award from the U.S. General Services Administration to provide federal government agencies with secure on-demand cloud computing services -- including server, network and storage capacity. The company will provide infrastructure as a service (IaaS) offerings via a cloud computing platform.

The blanket purchase agreement is valued at as much as $76.5 million over five years.

Federal agencies will be able to implement on-demand computing via virtual server farms that consist of virtual and physical servers, storage services, backup services, and application support services. Verizon said that by converging computing and networking resources, it can manage -- in real time -- the capacity, security, performance and availability of infrastructure and applications for the agencies served.

FCC Spectrum Forecast Predicts 300 MHz Crunch by 2014

The United States is likely to face a spectrum deficit by 2014 as mobile broadband traffic soars by 35X in this 5-year period, according to a newly released technical and economic forecast from the FCC. Even if spectrum and device efficiency doubles and the number of cell towers continues to grow at its current pace, the country will need around 300 additional megahertz of spectrum in use by 2014 to accommodate this growing demand. The FCC estimates this near-term spectrum deficit to be 300 megahertz.

Earlier this year, the National Broadband Plan recommended that the FCC make available 500 megahertz (MHz) of new spectrum for wireless broadband within ten years, including 300 MHz for mobile flexible use within five years. In
addition, the President directed in a June 28, 2010, Executive Memorandum that 500 MHz of new spectrum be made available for mobile and fixed broadband use. However, the process of re-purposing spectrum historically has taken at least 6-10 years.

The newly published forecast calculates that the amount of mobile data demanded by American consumers is likely
to exceed capacity of our wireless networks in the near-term, and that meeting this demand by making
additional spectrum available is likely to create significant value for the mobile economy.

Some key findings of the report include:

  • Within the next five years, the spectrum deficit is likely to approach 300 megahertz.

  • This spectrum crunch will be driven by significant growth of mobile broadband traffic, on the
    order of 35 times recent levels.

  • Mobile broadband growth is likely to outpace the ability of technology and network
    improvements to keep up by an estimated factor of three.

  • Meeting this need may create $120 billion in spectrum value, with hundreds of billions more in
    total value to the economy.

At a "Spectrum Summit" in Washington, D.C., FCC Chairman Julius Genachowski stated "If we act thoughtfully and execute on a strategic vision to ensure the highest and best use of this precious national resource, we can drive billions of dollars in private investment, fueling world leading innovations, creating millions of new jobs, and enabling endless new products and services that can help improve the lives of all Americans.

If we don't, we will put our country's economic competitiveness at risk, and squander the chance we now have to lead the world in mobile."

Calix Posts Q3 Revenue of $76 Million, up 27% YoY

Calix reported Q3 revenue of $75.5 million, an increase of 27% from revenue reported for the third quarter of 2009 of $59.6 million. GAAP net loss for the third quarter of 2010 was $5.4 million, or $(0.14) per share, compared to a GAAP net loss of $6.8 million, or $(0.14) per share, reported for the third quarter of 2009 (assuming the conversion of preferred stock into common stock as of the beginning of the third quarter of 2009).

"Third quarter results were ahead of our expectations and continued to demonstrate growth and increased sales momentum. Our Unified Access portfolio continued to strengthen, and communications service providers leveraged new options to bring ‘Fiber Forward' in their networks. On September 16, 2010, we announced that Calix had entered into a definitive agreement for Calix to acquire Occam Networks. We believe that the acquisition of Occam Networks would allow us to accelerate our Unified Access vision by speeding product innovation and expanding our United Access portfolio, providing communications service providers with more options and new innovations delivered at a fast pace," said Calix president and CEO Carl Russo.

Nokia Sales Rise 3% Sequentially to EUR 10.3 billion

Nokia reported Q3 net sales of EUR 10.3 billion, up 5% year-on-year and 3% sequentially (down 2% and up 1% at constant currency). The company shipped a total of 110.4 million mobile devices during the quarter, up to 2% compared to last year but down 1% sequentially.

Stephen Elop, Nokia's new CEO, said the company faced a uniquely disruptive period in the mobile industry but that the company's technical depth provides unique opportunities for innovation.

Some highlights for the quarter.

  • Devices & Services net sales of EUR 7.2 billion, up 4% year-on-year and 6% sequentially (down 5% and up 2% at constant currency).

  • Services net sales of EUR 159 million, up 7% year-on-year and 1% sequentially; billings of EUR 325 million, up 89% year-on-year and 10% sequentially.

  • Nokia converged mobile device (smartphone and mobile computer) volumes of 26.5 million units, up 61% year-on-year and 10% sequentially.

  • Nokia mobile device ASP (including services revenue) of EUR 65, up from EUR 64 in Q3 2009 and EUR 61 in Q2 2010.

  • Devices & Services gross margin of 29.0%, down from 30.9% in Q3 2009 and 30.2% in Q2 2010.

  • Devices & Services non-IFRS operating margin of 10.5%, down from 11.4% in Q3 2009 and up from 9.5% in Q2 2010.

  • NAVTEQ non-IFRS net sales of EUR 252 million, up 52% year-on-year and flat sequentially (up 47% and down 2% at constant currency).

  • Nokia Siemens Networks net sales of EUR 2.9 billion, up 7% year-on-year and down 3% sequentially (flat and down 4% at constant currency). Nokia Siemens Networks non-IFRS operating margin of -3.9%, down from -1.9% in Q3 2009 and 1.7% in Q2 2010.

  • Nokia operating cash flow of EUR 439 million, and cash generated from operations EUR 1 206 million.

  • Total cash and other liquid assets of EUR 10.2 billion and net cash and other liquid assets of EUR 4.4 billion, at the end of Q3 2010.

Freescale's Q3 Sales Rise to $1.15 Billion

Freescale Semiconductor reported net sales of $1.15 billion, compared to $1.11 billion in the second quarter of 2010 and $893 million in the third quarter last year. Income from operations for the three months ended October 1, 2010 was $1 million, compared to a loss of $18 million in the second quarter of 2010 and a loss of $261 million in the third quarter of 2009.

"Third quarter results continued our momentum with growth in revenues and profitability for Freescale," said Rich Beyer, chairman and CEO. "All of our core businesses grew sequentially and year over year, and we continued to solidify our embedded processing solutions leadership with consecutive record quarterly design wins."

PMC-Sierra to Acquire Wintegra for Mobile Backhaul Network Processors

PMC-Sierra has agreed to acquire Wintegra, a privately-held developer of networking silicon based in Austin, Texas, for approximately $213 million in cash.

Wintegra's WinPath family of network processors is used in 3G/4G base stations, fiber and microwave cell-site routers, as well as radio network controllers deployed globally in mobile networks. The has 165 employees with the majority of its R&D development team located in Ra'anana, Israel, and Austin, Texas. The acquisition of Wintegra expands PMC-Sierra's presence in Israel, where its FTTH business is based. Wintegra's founders, Kobi Ben-Zvi and Robert O'Dell, will join PMC-Sierra and bring an exceptional team with strong expertise in silicon design, networking software, and system integration.

PMC-Sierra said the acquisition accelerates its product offering in the IP/Ethernet packet-based mobile backhaul equipment market segment, which is expected to grow 35 percent annually from $1.2 billion in 2009 to $5.5 billion in 2014.

"Carriers are moving rapidly to IP-based mobile backhaul, and Wintegra's product offering is uniquely positioned to enable this packet transition and breakthrough the bandwidth bottlenecks faced in mobile networks," said Greg Lang, president and chief executive officer of PMC-Sierra. "Combined with our broad portfolio of communications infrastructure products, PMC-Sierra is leading the industry in the migration to IP-based networks in mobile backhaul, metro optical transport, and residential Fiber To The Home."

"We've already been partnering with PMC-Sierra to create mobile backhaul solutions that combine our multi-service WinPath processors and networking software with PMC-Sierra's extensive portfolio of framers and mappers," said Kobi Ben-Zvi, founder and chief executive officer of Wintegra. "Given the strong strategic fit between the two companies, joining forces will allow us to further accelerate the industry's transition to IP-based networks."
  • Wintegra was founded in 2000.

AT&T Sees Continued Strength in Wireless

Led by strong mobile growth, AT&T reported consolidated revenues of $31.6 billion, up $847 million, or 2.8 percent, versus the year-earlier quarter, and up 2.5% over the previous quarter. This marks the company's third consecutive quarter with a year-over-year revenue increase. Net income totaled $12.3 billion, or $2.08 per diluted share, including $1.53 in one-time gains from a previously disclosed tax settlement and the sale of Sterling Commerce.

Capital expenditures totaled $5.5 billion, including a nearly 64 percent increase in wireless-related capital investment versus the year-earlier quarter, as AT&T aggressively deploys next-generation wireless broadband networks.

"This was a terrific mobile broadband quarter," said Randall Stephenson, AT&T chairman and chief executive officer. "A record number of customers signed new two-year contracts and integrated device sales outpaced our previous best by a wide margin. Wireless revenues continue to grow, churn is reaching record low levels, and postpaid ARPU increased for the seventh straight quarter.

Some highlights for the quarter:


  • AT&T posted a net gain in total wireless subscribers of 2.6 million, to reach 92.8 million in service.

  • Retail net adds for the quarter include postpaid net adds of 745,000 and prepaid net adds of 321,000. Connected device net adds were 1.2 million, and reseller net adds were 406,000.

  • Total Churn at Record Third-Quarter Level. Postpaid churn was 1.14 percent — matching the third-quarter record set in 2009 — and total churn reached a best-ever third-quarter level of 1.32 percent versus 1.42 percent in the third quarter of 2009.

  • More than 8 million postpaid integrated devices were activated in the third quarter, the most quarterly activations ever. More than 80 percent of postpaid sales were integrated devices. (Integrated devices are handsets with QWERTY or virtual keyboards in addition to voice functionality and are a key driver of wireless data usage.)

  • At the end of the quarter, 57.3 percent of AT&T's 67.7 million postpaid subscribers had integrated devices, up from 42.0 percent a year earlier. The average ARPU for integrated devices on AT&T's network is 1.7 times that of the company's non-integrated device base. More than 80 percent of integrated device subscribers are on FamilyTalk and/or business discount plans. Churn levels for these plans continue to run below the company's postpaid base.

  • There were 5.2 million iPhone activations, the most iPhone activations ever in a quarter. This is 62 percent more than the previous quarterly record of 3.2 million activated in the second quarter of 2010. Approximately 24 percent of those activations were for customers who were new to AT&T.

  • Wireless data revenues — from messaging, Internet access, access to applications and related services — increased $1.1 billion, or 30.5 percent, from the year-earlier quarter to $4.8 billion.

  • AT&T wireless subscribers on data plans increased by 21.5 percent over the past year.

  • Total text messages carried on the AT&T network increased about 34 percent to 161 billion and multimedia messages more than doubled to 2.8 billion.

  • Postpaid subscriber ARPU increased 2.0 percent versus the year-earlier quarter to $62.84. This marked the seventh consecutive quarter AT&T has posted a year-over-year increase in postpaid ARPU. Postpaid data ARPU reached $22.02, up 19.5 percent versus the year-earlier quarter, and total postpaid subscriber revenues continued recent trends, with double-digit growth, reflecting increases in both voice and data.

  • Wireless service revenues increased 10.5 percent to $13.7 billion in the third quarter. Total wireless revenues, which include equipment sales, were up 11.4 percent year over year to $15.2 billion and increased 6.6 percent from the second quarter of 2010.

  • Wireline Operational

    • Driven by strength in IP data services, in the third quarter, total revenue from residential customers totaled $5.3 billion, up 0.2 percent from the third quarter of 2009, the first year-over-year growth in more than two years.

    • AT&T U-verse TV subscribers increased by 236,000 in the quarter to reach 2.7 million.

    • The AT&T U-verse High Speed Internet attach rate continued to run above 90 percent, and nearly 60 percent of subscribers took AT&T U-verse Voice. More than three-fourths of AT&T U-verse TV subscribers have a triple- or quad-play option from AT&T. ARPU for U-verse triple-play customers was about $160.

    • AT&T's U-verse deployment now reaches more than 26 million living units. Companywide penetration of eligible living units is 14.1 percent, and across areas marketed to for 30 months or more, overall penetration is more than 22 percent. AT&T's total video subscribers, which combine the company's U-verse and bundled satellite customers, reached 4.7 million at the end of the quarter, representing 18.8 percent of households served.

    • Driven by U-verse High Speed Internet service, AT&T posted a 148,000 net gain in wireline broadband connections.

    • U-verse Revenues Exceed $1 Billion. Increased AT&T U-verse penetration drove 30.0 percent year-over-year growth in consumer IP revenues (broadband, U-verse TV and U-verse Voice).

    • In the third quarter, AT&T U-verse revenues were $1.1 billion, 84.5 percent higher than in the third quarter of 2009.

    • AT&T posted a decline in total consumer revenue connections due primarily to expected declines in traditional voice access lines, partially offset by increases in broadband, U-verse TV and VoIP (Voice over Internet Protocol) connections. Combined wireline consumer TV and broadband connections increased by 343,000 in the third quarter and 1.3 million over the past four quarters. AT&T U-verse Voice connections increased by 166,000 in the quarter and 759,000 over the past four quarters. Total consumer revenue connections at the end of the third quarter were 43.7 million, compared with 45.7 million at the end of the third quarter of 2009 and 44.3 million at the end of the second quarter of 2010.

    • Total business revenues were $9.5 billion, a decline of 3.9 percent versus the year-earlier quarter. Business service revenues, which exclude CPE, declined 3.7 percent year over year and decreased slightly sequentially, down 1.3 percent.

    • Business IP data revenues grew 8.0 percent overall, led by growth in VPN revenues. Global Enterprise Solutions IP data revenues grew 9.7 percent. Approximately 70 percent of AT&T's frame customers have made the transition to IP-based solutions, which allows them to easily add managed services such as network security, cloud services and IP conferencing on top of their infrastructures.

    • Revenues from new-generation capabilities that lead AT&T's most advanced business solutions — including Ethernet, VPNs, hosting, IP conferencing and application services — grew 15.4 percent versus the year-earlier quarter and were up 4.5 percent from the second quarter of 2010, continuing AT&T's strong trends in this category.

    • Total wireline revenues posted their smallest year-over-year decline in six quarters, down 3.0 percent, and down slightly sequentially. Third-quarter revenues in AT&T's wireline segment totaled $15.3 billion versus $15.7 billion in the year-earlier quarter. Third-quarter wireline operating expenses were $13.4 billion, down 3.9 percent versus the third quarter of 2009 and down 0.6 percent sequentially. Wireline operating income totaled $1.8 billion, compared to $1.8 billion in the third quarter of 2009 and $1.9 billion in the second quarter of 2010. AT&T's third-quarter wireline operating income margin was 12.0 percent, compared with 11.2 percent in the year-earlier quarter and 12.2 percent in the second quarter of 2010.