Sunday, August 14, 2011

XO Posts Revenue of $381.7 million, Down Slightly from Last Year

XO Holdings reported Q2 revenue of $381.7 million compared to $383.6 million in the same period last year. Adjusted EBITDA (a non-GAAP financial measure) was $43.4 million in the second quarter of 2011, an increase of 7%, or $2.9 million over the year-ago period. Adjusted EBITDA as a percentage of revenue remained flat at 11% for the current quarter compared to the same quarter of 2010.

Net loss for the second quarter 2011 was $10.1 million compared to $1.2 million for the year-ago period. XO's results for the second quarter of 2010 included net investment gains of $5.4 million. There were no investment gains recognized during the second quarter of 2011.

Q2 revenue for Strategic Core services (IP-based services as well as transport) generated $242.8 million in revenue, an increase of $26.5 million, or 12% over the year-ago period. This was offset by year-over-year decreases in Legacy and Non-Core products. Revenue from Legacy products, such as more mature and traditional wireline voice, retail long distance, and other TDM-related products and services, decreased $9.7 million, or 7%, during the second quarter, compared to the year-ago period.

China Mobile Launches Financial Services Arm

China Mobile announced the establishment of a new subsidiary, China Mobile Finance, whose primary business will be the provision of financial management services. The registered capital of the new subsidiary is proposed to be RMB 5 billion. The company said the new operation would strengthen its internal funds management and ensure better control of liquidity risks. Among its activities, China Mobile Finance will provide credit authentication, collection and payment of transaction money, and operate an insurance agency business.

Cortina Deliver Packet Processing Punch for Residential Gateways

Cortina Systems has begun sampling new high-performance silicon for the next wave of multi-service residential gateways.

The newly announced CS7542/CS7522 devices are designed for the convergence of IPTV with DVB, router gateways, and DVR set top boxes. Such platforms will need to deliver simultaneous line rate bandwidth for secured data, voice, video, and mobile services without service degradation.

Cortina Systems is basing its solution on dual ARM Cortex A9 processors with DSP extensions capable of driving 4,000 DMIPS of performance. The design integrates a Gigabit line rate network engine with the ability to support QoS streams from the Service Provider. Cortina is also packing in the processing power for content DRM/CA systems and for advanced security features. In addition, Cortina's SoC solution integrates six transport stream inputs with the expectation that next gen residential gateways will serve IPTV streams as well as DVB and over-the-top content flows. Active power management features are also provided for meeting energy efficiency mandates.

"The digital home is in a rapid transition period where a new single service delivery model is needed to meet the growing demands and requirements for digital content and distribution," said Dr. Stewart Wu, Vice President at Cortina Systems. "To ensure the system's longevity and to support ever increasing bandwidth, Cortina's CS7542/7522 combines hardware‐accelerated, enterprise‐class, networking performance and security features with a flexible and scalable architecture to enable future value‐added services."

LightSquared Signs EarthComm Solutions

Texas-based EarthComm Solutions will become a wholesale customer on LightSquared's planned 4G-LTE network. EarthComm focuses on small and mid-sized cities throughout the southwest United States and beyond.

Level 3 Offers Direct Connect to Amazon Web Services

Level 3 Communications is a solution provider for Amazon Web Services' new Direct Connect service.

AWS Direct Connect enables enterprises to set up a connection to an AWS region via a dedicated network circuit. Level 3 can provide end-users with 1G and 10G circuits to the AWS cloud at all Direct Connect sites.

Level 3 said its advanced network and cloud services enable an ultra-high availability, end-to-end cloud platform that optimizes business productivity by delivering AWS services over a network that meets the applications' availability, latency and security requirements.

"Enterprise adoption of Amazon Web Services is growing in both scale and complexity. With this increasing sophistication, many customers want network connectivity options that match their application-specific requirements for performance and security," said Andrew Crouch, president of Sales for Level 3. "AWS Direct Connect customers can leverage Level 3's network to meet the demands of high-end cloud adopters with extensive network reach, bandwidth scale and established connectivity to AWS Direct Connect sites."

Time Warner Cable Adds 750K Customers via Insight Acquisition

Time Warner Cable will acquire Insight Communications for $3 billion in cash. Insight serves more than 750,000 customers in Indiana, Kentucky and Ohio. The operator has approximately 537,000 high-speed data subscribers, 679,000 video subscribers and 297,000 voice subscribers. The company's DOCSIS 3.0 upgrade is largely complete.

Time Warner Cable expects that, after incurring onetime costs and capital expenditures, it will create annual cost efficiencies of approximately $100 million through programming expense savings and other cost reductions.

Insight is currently owned by The Carlyle Group, Crestview Partners, MidOcean Partners, members of Insight management and others. Carlyle and Insight management took the company private in December 2005, and Crestview and MidOcean purchased a significant stake in the company in April 2010.

"We believe in our business and its long-term prospects and have long thought that Insight's well-run, technologically advanced systems would fit well with our Midwest operations. With the deal announced today, we are able to acquire those systems at an attractive price that is consistent with both our disciplined approach to M&A and our capital allocation strategy," said Glenn Britt, Chairman and CEO of Time Warner Cable. "We look forward to serving these customers, welcoming Insight employees to the Time Warner Cable team and building on Insight's successes."

Motorola Mobility Acquisition Brings 17.000 Patents in Wireless, Compression, Security

Google will acquire Motorola Mobility for $40.00 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on August 12, 2011.

Google sees the acquisition as a step to "supercharge the Android ecosystem" which it vowed to keep open for licensing by other handset manufacturers. Google will run Motorola Mobility as a separate business.

Motorola Mobility brings a a long history of innovation in mobile phones, including its DynaTAC, StarTAC and RAZR phones and, more recently the DROID by Motorola family of smartphones. In cable TV services, Motorola enabled the first pay-per-view event and launched the first all digital HDTV system. Its innovation also includes digital video compression and encryption, cable modems, the first HD set-top boxes with integrated DVR, and the first multi-room DVR content distribution system. The company has worked extensively on software application and services development for seamlessly integrating media content on multiple screens.

As of January 2011, Motorola owns approximately 24,500 patents and patent applications, worldwide. The patent portfolio generally relates to wireless, audio, video, security, user interface and product design, along with applications and services related to its products. The Mobile Devices business segment claims approximately 14,600 granted patents and 6,700 pending patent applications worldwide, including numerous patents related to various industry standards such as 2G, 3G, 4G, H.264, MPEG-4, 802.11, open mobile alliance (OMA) and near field communications (NFC). The Home business segment claims approximately 1,900 granted patents and 1,300 pending patent applications, worldwide.

Larry Page, CEO of Google, said, "Motorola Mobility's total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers."

Sanjay Jha, CEO of Motorola Mobility, said, "This transaction offers significant value for Motorola Mobility's stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses."

Andy Rubin, Senior Vice President of Mobile at Google, said, "We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices."

  • During Q2, Motorola Mobility shipped 4.4 million smart phoneunits and over 440,000 tablets. It also expanded the DROID family at Verizon with introduction of DROID X2 and DROID 3, and forged a renewed relationship with Sprint and its prepaid brands, Boost Mobile and Virgin Mobile USA, with the planned introduction of 10 new devices including the PHOTON 4G.

  • For the full year 2011, Motorola Mobility has issued guidance saying it expects total SP and tablet units of 21 -23 million, with 1.3 to 1.5 million tablets.

  • Motorola completed its separation into a Solutions business and a Mobility business on January 4, 2011.

  • In October 2010, Motorola Mobility filed a complaint with the U.S. International Trade Commission (ITC) alleging that Apple’s iPhone, iPad, iTouch and certain Mac computers infringe Motorola patents. Overall, Motorola Mobility’s three complaints include 18 patents, which relate to early-stage innovations developed by Motorola in key technology areas found on many of Apple’s core products and associated services, including MobileMe and the App Store. The Motorola patents include wireless communication technologies, such as WCDMA (3G), GPRS, 802.11 and antenna design, and key smartphone technologies including wireless email, proximity sensing, software application management, location-based services and multi-device synchronization.

  • In November 2010, Motorola Mobility filed complaints against Microsoft alleging infringement of sixteen patents by Microsoft’s PC and Server software, Windows mobile software and Xbox products. The Motorola patents directed to PC and Server software relate to Windows OS, digital video coding, email technology including Exchange, Messenger and Outlook, Windows Live instant messaging and object oriented software architecture. The Motorola patents directed to Windows mobile software relate to Windows Marketplace, Bing maps and object oriented software architecture. The Motorola patents directed to Xbox relate to digital video coding, WiFi technology, and graphical passwords. Motorola Mobility has requested that Microsoft cease using Motorola's patented technology and provide compensation for Microsoft's past infringement.

Xsigo Rewires the Data Center with Virtualized Server Fabric

Xsigo Systems, a start-up based in San Jose, California, unveiled its fully virtualized infrastructure for cloud-optimized data centers. The Xsigo Server Fabric aims to do for infrastructure what VMware did for the servers -- namely, to enable one-click network connections from virtual machines to any data center resource – including servers, networks, storage, and other virtual machines. By providing this "one click" tool to connect VMs to networks and storage while using existing Ethernet routers + FC directors, Xsigo calculates that it can reduce the number of I/O cables and cards in a data center by up to 70%, thereby significantly cutting deployment CAPEX and simplifying operations.

"Cloud data centers demand a different, far more flexible infrastructure, and everyone knows it," said Lloyd Carney, Xsigo CEO. "But while legacy networking vendors remain mired in the status quo, essentially trying to cross oceans with railroads, Xsigo has invented the equivalent of the airplane. Today, Xsigo is ushering in a new era of data center connectivity – virtualized infrastructure – that does for the data center infrastructure what server virtualization did for the servers themselves."

The Xsigo Server Fabric is a rack-based solution that works by virtualizing connections between networks, servers and storage, not by re-configuring switches, switch ports, or VLANs. It supports Ethernet and Fibre Channel connections at up to 40 Gbps. Environments can be scaled to 1,000 physical hosts with tens of thousands of virtual connections linking virtual machines to each other and to network and storage resources.

Xsigo said its fabric is fully interoperable with existing core networking products from Cisco, Brocade, Juniper and others.

Key components include the Xsigo I/O Director and Xsigo XMS Management Software – together with a software upgrade package called the SFS 1.0 Server Fabric Suite. The upgrade package includes host drivers, a management software plug-in, and operating software designed specifically to deliver the enhanced features and scalability of the Xsigo Server Fabric.

The SFS 1.0 Server Fabric Suite will be available in December 2011. It is licensed on a per-physical-host basis at a list price of $1,000 per host.

  • Xsigo Systems was founded in 2004 and is backed by Kleiner Perkins, Khosla Ventures, Greylock Partners, and North Bridge Venture Partners.

  • Xsigo Systems is headed by Lloyd Carne (CEO, who previously was general manager of IBM's Netcool Division, which acquired Micromuse where Carney had been chairman and CEO. Xsigo's Vice Chairman and Founder is Ashok Krishnamurthi, who previously held the positions of Vice President and General Manager of the Infrastructure Product Line at Juniper Networks.

F5 Acquires Assets of Crescendo Networks

F5 Networks has acquired the intellectual property assets of Crescendo Networks, a start-up founded in 2002 that pursued application acceleration technology.

The assets were acquired through liquidation proceedings in Israel, where Crescendo Networks was headquartered. In addition, a number of key Crescendo employees are joining F5's office in Tel Aviv.

"We welcome members of Crescendo's engineering team to F5 and look forward to enhancing our industry-leading ADN solutions with their technology," said Dan Matte, SVP of Marketing and Business Development at F5. "In particular, Crescendo's intellectual property and technical expertise provide compelling layer 7 FPGA capabilities for hardware and security solutions. With this acquisition, F5 will further strengthen its products' ability to address both the continuing exponential growth of Internet traffic and the rising number of sophisticated security threats impacting applications."

  • In July 2008, F5 secured $9.5 million in third round funding for its web application acceleration solutions. Crescendo Networks featured a multi-tier application architecture that improves the operation of existing application infrastructure. Investors included Evergreen Venture Partners, Apax Partners, Magma Venture Partners, StageOne Ventures and Convergent Capital. The company had raised a total of $36.2 million as of that date.

Huawei's Revenue Growth Slows to 11% in First Half of 2011

Huawei reported sales of CNY 98.3 Billion in 1H2011, up 11% year-over-year, as operating profit reached CNY 12.4 billion. Some notes highlighted by the company:

  • In the first half of 2011, Huawei launched the first multi-mode SingleRAN solution which supports both WiMAX and LTE, and helped Saudi Arabian operator Mobily deploy the world's first TD-LTE/WiMAX dual-mode commercial network.
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  • During this period, Huawei also deployed over 130 SingleRAN commercial networks around the world, all of which support LTE. More than 40 of those operators who have deployed the SingleRAN technology will have launched or will soon launch LTE networks.
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  • Huawei won optical supply contracts with six of the seven national broadband projects in the world.
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  • In early 2011, Huawei established its Enterprise Business Operation Center, actively promoting the ICT transformation of the enterprise market. Huawei Enterprise has expanded its businesses into over 100 countries, providing ICT infrastructure construction and information services to multiple industries including government, finance, transportation, power, energy and the Internet.
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  • Huawei Device saw its shipments jump by 40% year-over-year to 72 million units.

"Huawei's performance in the first half of 2011 was in line with our expectations, while growth was stable and robust," said Cathy Meng, Chief Financial Officer, Huawei. "Although the global economy continues to face uncertainty, we remain confident in achieving our annual sales target of CNY 199 billion with our Device and Enterprise businesses as new growth drivers."

  • For its full-year 2010, Huawei reported sales revenues of CNY 185.2 billion (US$28.36 billion), a 24.2% growth over the previous year. For 2010, Huawei also reported an increased net profit of CNY 23.8 billion (US$3.64 billion), up 30.0% from 2009, and net profit margin of 12.3%.

Charter Deploys Cisco CRS-3 and ASR 9000 Routers

Charter Communications, the fourth-largest cable operator in the United States,is deploying the Cisco CRS-3 Carrier Routing System and Cisco ASR 9000 Series Aggregation Services Routers to deliver enhanced video, data, voice and mobile backhaul services to residential and commercial customers. Financial terms were not disclosed.

The Cisco ASR 9000 includes unique video capabilities, such as high-performance multicast, integrated content caching, in-line video performance monitoring, and zero-loss video transport technology.