Wednesday, May 8, 2019

Private investors to acquire Zayo for $14.3 billion in cash

Affiliates of Digital Colony Partners and the EQT Infrastructure IV fund will acquire Zayo Group Holdings for $35.00 in cash per share of Zayo's common stock in a transaction valued at $14.3 billion, including the assumption of $5.9 billion of Zayo’s net debt obligations. The offer price represents a 32% premium to the volume-weighted price average of the last six months of $26.44.

The Zayo Board of Directors said the sale of the company to Digital Colony and EQT Infrastructure is in the best interest of Zayo and all its stakeholders, as it delivers immediate and substantial value to shareholders, will strengthen Zayo’s financial flexibility, enabling the company to increase investments and better position itself for long-term growth and profitability.

The companies hope to conclude the deal by the first half of 2020.

Marc Ganzi, Managing Partner of Digital Colony, said, “Zayo has a world-class digital infrastructure portfolio, including a highly-dense fiber network in some of the world’s most important metro markets. We believe the company has a unique opportunity to meet the growing demand for data associated with the connectivity and backhaul requirements of a range of customers. We are excited to work alongside the management team and EQT to grow the business and expand its presence in the global market."

Dan Caruso, Zayo’s Chairman and CEO, said, “Digital Colony and EQT share our vision that Zayo’s Fiber Fuels Global Innovation. Both are experienced global investors in the communications infrastructure space, and they appreciate our extraordinary fiber infrastructure assets, our highly talented team and our strong customer base. I am confident this partnership with EQT and Digital Colony will empower Zayo to accelerate its growth and strengthen its industry leadership.”

Separately, Zayo reported consolidated revenue of $647.2 million for the three months ended March 31, 2019, including $555.2 million from the Communications Infrastructure segments and $92.0 million from the Allstream segment. Net income was $34.7 million, including $39.2 million from the Communications Infrastructure segments and a net loss of $4.5 million from the Allstream segment.

https://investors.zayo.com/home/default.aspx

Telefónica to sell 11 data centers for €550 million

Telefónica agreed to sell 11 of its data centers to Asterion Industrial Partners, a pan-European infrastructure fund manager, for EUR 550 million.

The data centers covered by the sale have installed service capacity of 29 MW and are located in 7 countries: Argentina (2), Brazil (2), Chile (1), Spain (2), Mexico (1), Peru (2) and United States (1).

Telefonica will continue to offer its portfolio of services from a network of 23 Data Centers, including the 11 of the sale. The deal does not include the sale of servers owned by Telefónica, or the management and access to customers hosted on them.

The sale also includes the signing of a housing services agreement under which Telefónica will continue to provide and manage the services it has been offering its customers from these centers and Telefónicawill maintain a direct relationship with these customers. In turn, this agreement will allow Asterion to leverage the sales network of the Telefónica Group's operations to market the remaining capacity of the Data Centers.

Telefónica expects to incur capital gains before taxes and controlling interests of around EUR 260 million.

Altiostar raises $114 million for its open vRAN

Altiostar, a start-up based in  Tewksbury, Mass., closed a $114 million Series C round of financing for its open virtualized RAN (open vRAN) technology.

Rakuten, which is preparing to launch a greenfield mobile network in Japan later this year, is coming on board as an investor. Rakuten is deploying the Altiostar solution in their mobile network and the companies are collaborating on the development of 5G solutions.

In early 2018, Qualcomm Ventures LLC and Tech Mahindra also participated in the C-round as investors. Qualcomm has entered into a development collaboration agreement with Altiostar. Tech Mahindra has signed a value-added-reseller/system integrator contract with Altiostar.

"A round of this magnitude, backed by global technology leaders like Rakuten, Qualcomm Ventures and Tech Mahindra, signifies the immense 5G opportunity we have in front of us as well as the progress we have made developing our virtualized RAN technology. Our unique open vRAN solution is designed to improve the quality of experience, enhance spectral efficiency and significantly reduce Total Cost of Ownership. With this funding, and these strategic partners, we're excited about our ability to deliver this breakthrough software defined solution to network operators globally as they prepare for the 5G future," said Ashraf M. Dahod, president and chief executive officer at Altiostar.

http://www.altiostar.com

  • Altiostar provides a 5G-ready virtualized RAN software solution that supports open interfaces and disaggregates the hardware from the software to build an open multi-vendor web-scale network. The Altiostar solution supports macro and small cells, indoor and outdoor, enabling interference management, carrier aggregation and dual reception.

Nutanix builds its multi-cloud strategy

Nutanix is extending its Xi Frame desktop-as-a-service solution from the public cloud to the private cloud, enabling the delivery of apps and desktops in a hybrid cloud environment.

Nutanix Xi Frame customers can already access applications and virtual desktops from popular public clouds like AWS and Azure. The new support enables customers to extend desktop delivery to their Nutanix private cloud, integrating virtual desktop infrastructure (VDI) services with the Nutanix Enterprise Cloud platform. Xi Frame desktops can be simultaneously delivered via multiple clouds and managed via a single console for seamless control and administration.

In addition, the company is announcing new functionality and additional planned availability zones for its cloud-based disaster recovery (DR) service, Xi Leap. Nutanix Xi Leap is expanding beyond its current availability zones in US West, US East and the U.K. to include Italy through Nutanix’s partnership with Sparkle, the international services arm of Telecom Italia Group, as well as in Japan and Germany. Also, Xi Leap can now deliver DR services for enterprise workloads running on Nutanix private clouds using VMware ESXi, making it even simpler to transform existing applications into a hybrid service.

One further announcement is the introduction of Nutanix Mine, a new open solution that integrates secondary storage operations with the Nutanix Enterprise Cloud Platform, delivering a complete platform for primary and secondary storage within the private cloud.

Deutsche Telekom's sales grow 3.5% to EUR 19.5 billion

Deutsche Telekom's Q1 2019 net revenue increased by 3.5% in organic terms to 19.5 billion euros. Adjusted EBITDA AL rose 3.9 percent year-on-year to 5.9 billion euros in organic terms. Free cash flow AL totaled 1.6 billion euros. In organic terms, it increased by 9.6 percent.

“We got off to a successful start to the year,” said Tim Höttges, CEO of Deutsche Telekom. “Deutsche Telekom has much more to offer than just our sensational success in the United States. We are seeing positive trends throughout the Group.”

Cash CAPEX excluding expenses for mobile spectrum stood at 3.7 billion euros, up 19.7 percent against the first quarter of 2018. This increase was attributable to the accelerated network build-out in the United States and further extensive investments to build out and modernize the network in Germany.

Some highlights:

Germany – MagentaTV gains ground

  • 4.4 million customers now use MagentaEINS, a convergence product package of fixed-network and mobile communications, up 17.1 percent yoy. 53 percent of branded mobile contract customers now use MagentaEINS packages, an increase of 9 percentage points in a year. 
  • The number of customers with fiber-optic-based products (FTTH, FTTC/vectoring) increased by 688,000 in the quarter, reaching 12.9 million at the end of March, up 24 percent year-on-year. 
  • 66,000 new MagentaTV customers were recorded in the quarter just ended, taking the total number to 3.4 million, an increase of 7.1 percent compared with March 2018.
  • German mobile service revenues increased again substantially by 2.8 percent compared with the first quarter of 2018. The trend in adjusted EBITDA AL in the Germany operating segment was also very positive in the reporting period, with an increase of 2.4 percent to 2.1 billion euros. Revenue increased 0.6 percent to 5.4 billion euros.

United States

  • For the last six years now, T-Mobile US has recorded more than one million customer additions in every single quarter. 
  • Between January and March 2019, 1.65 million net additions were recorded, including one million branded postpaid customers. 
  • Total revenue increased by 7.0 percent to 11.1 billion U.S. dollars. Adjusted EBITDA AL reached 3.0 billion U.S. dollars, an increase of 6.2 percent year-on-year.

Europe

  • European national companies' revenue increased by 2.8 percent to 2.9 billion euros compared with the first quarter of 2018. Adjusted EBITDA AL increased by as much as 5.2 percent to 0.9 billion euros. 


T-Systems Solutions

  • At 1.6 billion euros, order entry was up 6.8 percent against the first quarter of 2018, primarily driven by new deals in growth areas such as SAP, public cloud, and health.
  • Revenue declined 2.1 percent to 1.6 billion euros. 
  • There was a general decline in the volume of traditional IT and telecommunications business in Western Europe. T-Systems also terminated contracts in unprofitable business areas. 


Infinera posts Q1 revenue of $292.7 million

Infinera reported GAAP revenue of $292.7 million for its first quarter ended March 30, 2019, compared to $332.1 million in the fourth quarter of 2018 and $202.7 million in the first quarter of 2018. GAAP gross margin for the quarter was 22.7% compared to 25.4% in the fourth quarter of 2018 and 40.5% in the first quarter of 2018. GAAP operating margin for the quarter was (38.2)% compared to (34.4)% in the fourth quarter of 2018 and (12.2)% in the first quarter of 2018.

GAAP net loss for the quarter was $121.6 million, or $(0.69) per share, compared to a net loss of $133.5 million, or $(0.76) per share, in the fourth quarter of 2018, and net loss of $26.3 million, or $(0.17) per share, in the first quarter of 2018. Non-GAAP net loss for the quarter was $41.2 million, or $(0.23) per share, compared to a net loss of $44.2 million, or $(0.25) per share, in the fourth quarter of 2018, and net loss of $7.2 million, or $(0.05) per share, in the first quarter of 2018.

“In the first quarter of 2019, we made significant progress on the integration of our new company and in executing on our committed synergies,” said Tom Fallon, Infinera CEO. “While a significant deployment did not progress as expected, I am encouraged by the strong bookings outlook we see for second quarter of 2019 and our continued trend of building backlog and engaging with a much larger customer base. We are committed to capitalizing on this momentum and expect to return to non-GAAP profitability in the fourth quarter of this year.”

Separately, Brad Feller, the Chief Financial Officer (CFO) of Infinera, informed Infinera of his intention to resign as CFO effective as of a date still to be determined no later than the end of the third quarter of fiscal 2019. Infinera has agreed with Mr. Feller that he will continue to serve as CFO during this transition period while Infinera conducts a search for his successor.

https://www.infinera.com/infinera-reports-first-quarter-2019-financial-results/

ECI partners with UK-based Cherry & White

ECI announced a partnership with Cherry & White, an IT and telecommunications solutions provider, located in Cheltenham, England, supporing major utility network operators, government organizations and incumbent telecom network operators in the UK.

With this partnership, Cherry & White can leverage the complete set of products and systems from across the ECI portfolio.

“The market for ICT modernization has seen considerable growth in the past few years as more companies look for adaptive, flexible solutions to meet their needs, which is why we’re very excited about working alongside industry veterans like Cherry & White,” said Christian Erbe, VP Sales EMEA at ECI. “Critical infrastructure is an important market for ECI, and with more than 50 years of experience servicing hundreds of customers around the world, this partnership is an opportunity for both our companies to help others make the transition. This is yet another indication of our considerable positive momentum, particularly in the United Kingdom, and we’re looking forward to a bright future ahead.”

https://www.ecitele.com/elastigrid

Orange Spain tests Huawei's 400G

Orange Spain has completed a pilot deployment of a 400G/wavelength WDM link in its network using equipment from Huawei.

This marks the first pilot deployment of 400G/wavelength both in Spain and inside Orange Group.

In addition, Orange Spain is one of the first Service Providers to test Huawei's AI-based tools to help and enhance their Operation and Maintenance in the Optical Domain while providing the foundation towards Automation in its Transport Network.

Manuel Sánchez, Network Planning Director at Orange Spain, pointed out: "This joint test is very important for Orange. We have been seeking for technological innovation to efficiently and reliably expand our network bearing capabilities, thereby providing the best service for customers. Based on the new 400G/wavelength and AI-based Intelligence O&M technologies, Orange has confidence in providing high-quality connections to accommodate the yearly increasing traffic growth and to prepare the network for future evolutions such as 5G".

Richard Jin, President of Huawei Transmission & Access Product Line, said: "Huawei has maintained its technological innovation in the optical network field and promoted the optical network industry to the Optical Networking 2.0 era. The successful pilot deployment of 400G/wavelength and testing of Optical Intelligence (OI) are the full verification of Huawei's Optical Networking 2.0 solution. In the future, we will keep on supporting Orange Spain in coping with service challenges in the 5G era to achieve its business success."

See also