Thursday, July 28, 2005

Continuum Photonics and Polatis to Merge

Continuum Photonics and Polatis Ltd., makers of optical switch subsystems and module products, announced an agreement to merge.

Continuum Photonics, which was founded in 1998 and is located near Boston, offers a family of optical switch products based on its patented DirectLight switching technology. Due to a unique switching architecture, DirectLight provides integrated switching, optical attenuation (gain equalization), and power monitoring. Continuum has aimed its existing products at the Optical Automation Systems (OAS) market, with customers in carrier labs, data equipment companies, and telecom equipment manufacturers.

Polatis, which was founded in 2000 and is headquartered in Cambridge, UK, currently offers products based on its Micro-Actuation and Sensing System (MASS) platform, including a range of optical switch systems, modules, and cards for both single mode and multimode fiber applications. The patented MASS technology provides fast and ultra-low loss matrix switching, requiring no light to establish a connection. Polatis has aimed its existing products at communications, aerospace and defense customers. In March 2005, Polatis announced a worldwide sales distribution agreement with JDS Uniphase.

Continuum's investors include Flagship Ventures, Prism Venture Partners, JK&B Capital, Boston Millennia Partners, Harris and Harris Group, GE Capital, MTDC, Arcadian Venture Partners, and Gainesborough Investments.

Polatis is funded through investments by 3i, Alta Berkeley, Prelude, and EonTech.

Xten Moves to Per-Seat Licensing for SIP Softphones

Xten Networks, a developer of SIP softphones, reported revenue of $1,029,754 for the quarter ended 30-April-2005, compared to $928,608 for the quarter ended 31-January-2005, an increase of 11 percent quarter-over-quarter.

"February 1st represented a significant change in our business model with the company moving away from selling unlimited licenses. Consistent with management expectations, we believed that one-time revenue would be impacted as the company moved to a per-seat license model with a deliberate focus on annuity revenue," stated Mark Bruk, chairman of Xten Networks.

HomePlug Powerline Alliance Proposes Command & Control Standard

The HomePlug Powerline Alliance is seeking industry input for a a new advanced command and control specification, known as HPCC (HomePlug Command & Control). This low-speed, very low-cost specification is intended to complement the alliance's higher-speed powerline communications technologies: HomePlug 1.0, HomePlug AV, and HomePlug BPL. The alliance's Technical Evaluation Group (TEG) will conduct an RFP process. Companies that elect to propose technology will need to submit and present a proposal that details the technology capabilities, and submit their technology to validation tests.

The alliance said its command and control specification will enable advanced, whole-house control of lighting, appliances, climate control, security and other devices.

"Market projections indicate that by 2007 and 2008, millions of command and control nodes will be sold each month," said Pete Griffin, chairman of the alliance and Director of Technology for Radio Shack Corporation.

"For the past thirty years, home control over powerlines has struggled to reach an significant upward inflection point," said Oleg Logvinov, president of the alliance, and also president and CEO of Arkados, Inc. "With a common technology standard, companies can compete by making great products that work together using a common underlying technology. Product manufacturers and the consumer are the ultimate winners in this expanded marketplace."
  • In July, The HomePlug Powerline Alliance announced a co-existence solution that allows all powerline communications technologies, including HomePlug 1.0, HomePlug AV, and HomePlug BPL, to efficiently share the powerline network in both to-the-home and in-the-home applications. The solution would allow multiple powerline communications technologies to share the same wire while maintaining transmission speeds and effective QoS.

    The HomePlug Powerline Alliance has been developing a new HomePlug AV specification, which promises 200 Mbps capacity for sharing HDTV, Digital Audio, and Internet access around a home.

    The new co-existence technology, which is built-in to the HomePlug AV specification, fully coexists with HomePlug 1.0 data networking devices. When 1.0 devices are detected, the network switches to a Hybrid mode, allowing HomePlug AV devices to control the 1.0 devices and direct their communications, without compromising the AV network performance.

BT Reaches 5.6 Million Broadband Users

BT reported revenue of £4,783 million, up 5% in the quarter. Group operating profit before specific items1 was £648 million, up 10%, and earnings per share before specific items was 4.5 pence, up 25%.

"This has been a great first quarter and builds on the momentum we have seen gathering for more than a year," said Ben Verwaayen, BT's Chief Executive. "The transformation of the business is delivering real value to our customers and shareholders."

BT posted strong growth in new wave revenue at £1,385 million, up 48% over last year. New wave revenue accounted for 29% of the group's revenue compared to 20% in the same quarter of last year.

Consumer revenue in the quarter was 6% lower (5% lower excluding the impact of reductions to mobile termination rates). New wave consumer revenue increased by 67%, driven by the continuing growth of broadband and mobility.

As of 30-June-2005, BT was serving 5.6 million broadband end users, of which BT Retail was serving 1,940,000 connections.

Net additions for BT Retail in the quarter were 188,000, representing a 28% share of the broadband DSL additions in the quarter.

BT's net debt stands at £8,121 million, 4% lower than the previous year, including additional finance lease liabilities recognised under IFRS.

NEC Utilizes Data Connection's Megaco/H.248 Solution

NEC has licensed Data Connection's DC-Megaco/H.248 software for use in its AM Series Multi-Service Access Platform, a high-density broadband DSL, telephony and fibre platform that supports Ethernet, IP and ATM technologies with integrated service management. NEC's platform is deployed by service providers such as PCCW, Singtel and Turk Telecom throughout Asia, Japan, Australia, Eastern Europe and the CIS states.

Data Connection's Megaco/H.248 (DC-Megaco) solution includes an integrated toolkit that simplifies the integration process. It includes sample applications/code, customization tools and testing environments. DC-Megaco is part of Data Connection's family of VoIP software solutions that includes DC-SIP, DC-MGCP, and DC-SBC (Session Border Controller).

Broadwing Sees Data/Internet and Broadband Revenue Grows 5% Sequentially

Broadwing Corporation reported Q2 revenue of $222.2 million, an increase of $80.1 million or 56% from $142.1 million in the second quarter 2004. Revenue in the second quarter 2005 was generated almost entirely from sales of communications services, which contributed $221.2 million to total company revenue in the quarter, an increase of 56% from the second quarter 2004. The year-over-year increase in communications services revenue was primarily the result of revenue contributions from Focal Communications Corporation, acquired in September 2004, and organic growth in legacy Broadwing services. Excluding the impact of acquired revenue, communications services revenue increased $18.3 million or 13% year-over-year, with strong growth in sales of data/Internet and broadband services.

The consolidated net loss for the second quarter was $38.3 million, or a loss of $0.52 per share, as compared to a reported net loss of $38.1 million, or a loss of $0.78 per share for the second quarter 2004. Net loss year-over-year was impacted primarily by increased depreciation expense related to assets acquired in the Focal acquisition, offset by higher gross margin and lower interest expense. The Company reduced its consolidated net loss by 12% from the first quarter 2005 due in part to reduced interest expense in the quarter.

Nortel Wins US$50 Million Contract in Trinidad

LaqTel, a new operator in Trinidad and Tobago, has signed a contract with Nortel, valued at approximately US$50 million, to build a 3G wireless network for nationwide delivery of mobile broadband services. Nortel will deploy its complete CDMA2000 1xEV-DO 3G wireless solution for LaqTel, including CDMA2000 1X radio base stations, base station controllers, and core network technology. The deployment is expected to be complete by the end of 2005.

France Telecom Reaches 66.7 Mobile, 6.4 Million BB and 116K TV/DSL Users

France Telecom topped earning estimates for the first half of 2005 driven strong growth in wireless and broadband services. The company also reported promising numbers for its TV-over-DSL consumer service, which has now topped 116,000 subscribers.

First half 2005 Group revenues were EUR 23.7 billion, up 2.3% on a pro forma basis (4.5% on an actual basis). France Telecom noted faster growth in Q2 2005 of 3.6%, up from 1.0% in Q1 2005 (pro forma figures). Some highlights:

Personal Communication Services:

  • 8.6% revenue growth in Q2 2005 on a pro forma basis (12.3% on an actual basis)

  • 66.7 million mobile customers at June 30, 2005 (up 16.3% on a pro forma basis compared to June 30, 2004)

  • 6.4 million broadband customers in Europe (including 3.7 million in France and 927,000 in Poland), an increase of 80% in one year

  • 116,000 TV-over-DSL subscribers (+69% in six months). Some 7 million lines are now eligible for MaLigne TV. Over 1,000 hours of VOD are currently available for subscribers.

  • In it home market, France Telecom now holds a 48.6% share of the retail ADSL market. There are now an estimated 7.8 million ADSL lines in France, of which 3.7 million are served by FT Consumer, 2.3 million are unbundled lines, and 1.8 million are other lines.

  • In Poland, France Telecom now has 888,000 ADSL customers

Enterprise Communication Services:

  • 364,000 Business Everywhere customers

  • 13% increase in revenues from services

Some additional highlights:

  • Gross operating margin of EUR 9.3 billion, up 5.1% on a pro forma basis (6.2% in actual figures)

  • Gross operating margin ratio of 39.3%, compared with 38.6% for the first half of 2004 (on an actual basis)

  • Operating income of EUR 6.5 billion, up from EUR 4.3 billion at June 30, 2004

  • Group share of net income equal to EUR 3.4 billion at June 30, 2005, up from 1.0 billion at June 30, 2004

  • CAPEX at EUR 2.7 billion, up 29.6% on a pro forma basis, with a CAPEX to revenues ratio of 11.5%

  • Organic cash flow of EUR 2.9 billion at June 30, 2005, compared with EUR 3.3 billion at June 30, 2004

  • Net financial debt of EUR 46.3 billion, with a ratio of net debt to gross operating margin of 2.50
  • In Q1 2005, 890,000 ADSL access points were added across France. This includes lines served by France Telecom and the unbundled lines served by other carriers. The total number of ADSL access points in France (including unbundled lines) topped 7.2 million, up from 4.1 million a year earlier. As of 31-March-2005, France Telecom had 5,150,000 ADSL lines in its home market, of which 3,364,000 were serviced by its own Internet service and 1,787,000 were using third party ISPs.

Vodafone Italy Deploys Marconi Optical Systems

Marconi announced the deployment of two optical line systems from the Italian mainland to the island of Sardinia for Vodafone Italy.

Vodafone Italy has deployed two links using Marconi's Multihaul 3000 photonic technology. The links have been specifically customised for submarine installations and will connect Sardinia's transport network to the rest of Italy. The first of the two links, which has been operational since May 2005, connects Civitavecchia, Lazio, to Olbia, Sardinia, over a distance of more than 280 km.

The second link connects Cagliari, Sardinia, to Mazara del Vallo, Sicily, over a distance of more than 370 km and was activated at the end of June 2005. The second link represents an important success for Marconi because it is a technological world first in terms of length and attenuation over a single span with non-amplified passive fibre, thus eliminating the need for costly regeneration.

MaxStream Offers ZigBee-Ready Stand-Alone Radios

MaxStream has released stand-alone ZigBee-ready radios that allow for quick connections to both RS-232 and USB enabled devices. The stand-alone XBee-PRO radio is compatible with networks operating on XBee and XBee-PRO technology.

The 2.4 GHz XBee-PRO stand-alone radio features the 100 mW (EIRP) XBee-PRO RF module, which is capable of transmitting up to 0.9 miles (1.4 km) in line-of-sight conditions. Communicating at up to 250 Kbps, the XBee-PRO is ZigBee-ready and will be upgradeable to the latest ZigBee compliant networking protocol as it becomes available.

Wednesday, July 27, 2005

ECI Telecom Reports Revenue of $153 Million, up 26% YoY

ECI Telecom reported Q2 revenues of $153 million, a 26% increase from $121 million in the second quarter of 2004 and compared with $145 million in the first quarter of 2005. Net income was $15.6 million, or $0.13 per share on a fully diluted basis.

Some highlights:

  • Revenues for the Broadband Access Division, at $63 million for the quarter, were up 24% from a year ago and unchanged from last quarter.

  • Revenues for the Optical Networks Division increased 34% from a year ago and reached $82 million for the quarter, compared to $77 million in the first quarter of 2005.

  • Following the $88 million all-cash acquisition of Laurel Networks, ECI's cash, including short and long term deposits and marketable securities, now totals $214 million, or $1.82 per share.

Commenting on the results, Doron Inbar, President and CEO said, "We are pleased to report yet another quarter of strong growth and solid profits, as ECI continues to demonstrate leadership in its markets, which remain among the fastest growing sectors in telecom.

Telefónica Reaches 4.0 million Retail ADSL Lines

As of 30-June-2005, the Telefónica Group was serving 4.0 million retail ADSL lines in Spain, Latin America and the Czech Republic, an increase of +57.6% over last year. Telefónica's retail ADSL accesses in Spain rose to 2.3 million (+41.8% vs. June 2004), representing an estimated market share of 54.1% of the total broadband market. In Latin America, retail ADSL accesses stood at 1.7 million and grew by 70.9% over the same period last year, highlighting Telesp, with almost one million ADSL access lines (exceeded during July).

Telefónica Moviles reported strong growth across all its markets. Net adds were of 5.4 million for the quarter vs. more than 3 million in January-March of 2005, bringing its managed customer base to 86.5 million. Of the total customer base, 63.7 million corresponded to the Latin American operators, 19.4 million to Telefónica Moviles España and more than 3.4 million to Medi Telecom.

Revenues for the first half of 2005 amounted to EUR 17.359 billion , 20.0% higher than the same period in 2004. Revenues from Spain represented 55.4% of consolidated revenues, a decrease of a 6.8 percentage points over the same period in 2004. In turn, the contribution from Latin America increased to 40.6% (33.0% a year ago) due to the acquisition of the BellSouth Latin American operators. Brazil maintains its revenue contribution up to 17.4%.

Softbank BBTV Secures IPTV with NDS Content Protection

Softbank's newly launched BBTV service in Japan has deployed NDS' content protection system integrated with UTStarcom's IPTV headend system, set-top box and electronic program guide.

BBTV is using NDS's "Synamedia" software suite at the head-end and NDS smart cards in subscriber set-top boxes (STB).

BBTV will deliver more than 40 channels through STBs, offer a sophisticated electronic program guide, and provide access to more than 5,200 VOD titles.

NDS said this new contract further enhances its IPTV solution following deployments by Sistema in Russia, AUNA in Spain, CYTA in Cyprus, and recent announcements with Viasat in Sweden and SuperSun in Hong Kong. Financial terms were not disclosed.

Softbank BB's triple play service will be available in several service tiers, with pricing starting at 4540 Yen, approximately US$40.00 per month.
  • NDS is a majority-owned subsidiary of News Corporation.

Portugals' Optimus Deploys Motorola's Push-To-Talk over Cellular (PoC)

Motorola announced the deployment of a Push-To-Talk over Cellular (PoC) network for Optimus in Portugal. Optimus' subscribers will initially have a choice of PoC handsets; the Motorola V400p and Symbian Series 60 devices with the Motorola PoC Client. Each Motorola handset delivers a distinct 'walkie-talkie' experience, including one-touch access to presence-enabled phone contacts, giving subscribers flexibility and speed in how they communicate.

The PoC deployment further develops Motorola's relationship with Optimus, following Motorola's successful 3G network deployment for the operator in 2004.

WebEx Sees 23% Increase in Q2 Revenues over Last Year

WebEx Communications reported Q2 revenues of $75.3 million, a 23% increase from $61.1 million in the second quarter of 2004. Net income was $13.9 million, a 35% increase from $10.3 million in the second quarter of 2004. Diluted earnings per share, ("EPS") were $0.29, an increase of 32% from $0.22 in the second quarter of 2004.

"We had another good quarter, demonstrating the expanding market for collaborative application services," said Subrah Iyar, chief executive officer of WebEx. "As companies realize the huge cost advantages of on-demand solutions, we continue to see new customer requirements like the WebEx Retention Solution we announced during second quarter."

Alcatel Revenues Rise 8.5% YoY to EUR 3.145 Billion

Alcatel reported Q2 revenues of EUR 3.145 billion, an increase of 8.5% at a current EUR/US$ exchange rate (an increase of 10.7% at a constant EUR/US$ exchange rate). Net income (group share) amounted to EUR 196 million, or a diluted EPS of EUR 0.14 (US$ 0.17 per ADS).

Some highlights from the quarter:

  • The gross margin was registered at 35.6%

  • Operating profit amounted to EUR 263 million, representing an 8.4% operating margin.

  • Fixed communications revenues in Q2 decreased by 6.2% to EUR 1.224 billion from EUR 1.305 billion in the same period last year. The company cited good momentum in optical transmission and IP routing driven by a ramp in Triple Play deployments. The decrease in the segment's revenues is primarily due to the continued drop in traditional TDM switching, as well as some decline in broadband access revenues compared to the particularly solid second quarter 2004 in North America.

  • Volumes in DSL lines reached 5.9 million during the second quarter registering a market share gain and a return to the historical market position, with strength in Europe and China. The IP DSLAM continued to drive revenues with substantial volume deliveries during the quarter, while the market transitions to ADSL2plus technology.

  • Mobile communications revenues in Q2 increased by 34.6% to EUR 958 million from EUR 712 million in the same period last year, with growth across all product lines. Alcatel said emerging markets continued to be dynamic and hybrid 2G/3G infrastructure revenues were driven by activity in Brazil, Nigeria, Russia, and China. A new radio WCDMA customer was registered in the Middle East, confirming that a number of emerging countries are moving to 3G technologies.

  • Alcatel saw momentum continuing to build in next generation solutions, such as NGN-IMS core, where two flagship contracts were won in Western Europe and SE Asia. Over 20 trials with new customers have now been registered.

  • Mobile applications recorded significant growth with strong volumes in payment applications where the market is shifting to full converged payment solutions. Market traction was registered in video/music services where Alcatel now has over 60 customers.

  • Private communications revenues in Q2 increased by 6.5% to EUR 981 million compared with EUR 921 million in the same period last year. In the enterprise market, revenues bounced back more than expected after a slow start at the beginning of the year and voice services grew, especially in Eastern and Northern Europe.

  • IP telephony continued to register a strong progression, representing more than a third of the total shipments. Genesys again turned in a solid performance.

Serge Tchuruk, Chairman and CEO, summarized the Board's observations:

"Second quarter results came in above expectations. Sales were higher than anticipated in all three business segments. In particular, the mobile communication business grew around 30% year over year for the second quarter in a row, with a return to double digit profitability, confirming the strength of our product offering and regional strategy. While the fixed communication business continued to shrink as expected during the quarter, our market dynamics clearly point towards the forecasted rebound in the second half. We are also pleased by the return to growth of our private communication business, despite the weakness associated with the low cycle in space activities."

"We continue to operate in a competitive environment leading to pricing pressure. With product cost improvements offsetting price trends, our gross margin has been stabilizing for the last three quarters. "

Sprint to Support Comcast's Digital Voice

Sprint announced an arrangement with Comcast to provide connectivity between traditional phone providers and Comcast Digital Voice in select markets. This deal represents Sprint's continued expansion into the cable market.

BellSouth Adds Security Apps to DSL Service

BellSouth announced a number security applications designed to help keep residential and small business customers safe while online and their PCs free of spyware, viruses and tracking cookies.

BellSouth FastAccess DSL customers can add the following security applications: BellSouth Anti-Virus; BellSouth Anti-Spyware; and BellSouth Firewall.

BellSouth customers who wish to secure one computer can order individual software products for $2.99 per month, or the entire suite of three products for $6.99 per month. For customers with two to four computers, the cost to order individual products is $4.99 per month, or $11.99 per month for the entire suite. Business customers with up to 10 computers can purchase individual products for $12.99 per month, or the entire suite for $24.99 per month.

See also