Thursday, November 3, 2005

XO to Sell Wireline Assets to Carl Icahn, Enter Wireless Broadband Business

XO Communications will sell its national wireline telecommunications business for $700 million in cash and use the proceeds to become a leading provider of fixed broadband wireless services to businesses and service providers.

The company said it has entertained several bids over the past few months for its wireline assets and that the winning bidder was Elk Associates LLC, an entity owned by XO's controlling stockholder, Carl Icahn.

XO currently is one of the largest holders of fixed wireless licenses in the 28 GHz-31 GHz spectrum range covering more than 70 U.S. major metropolitan markets.

Once the sale is completed, the wireless business will be debt-free and is currently expected to have in excess of $300 million in cash to fund its operations and for other corporate purposes. The company's wireless services have already been made available to businesses and wireless service providers in select markets and, using its cash position and new strong balance sheet, the company plans to launch its services on a wider basis in the near future. The transaction is anticipated to close in late 2005 or early 2006.

The "XO Communications" brand name will be transferred to the private company and thereby will remain with the national wireline telecommunications business. XO anticipates operating its fixed wireless business under a new name.

It is anticipated that the wireless and wireline companies will enter into commercial agreements to sell each other's products and services at competitive rates in order to take advantage of market opportunities.

"The action we take today will create a pure-play fixed broadband wireless provider that combines significant resources with in-depth industry expertise to meet the growing demand for high-bandwidth broadband wireless services," said XO CEO Carl Grivner. "The market opportunity to provide these services has emerged, and our new focus on fixed wireless communications will enable us to offer robust fixed wireless solutions to businesses, mobile phone companies, and wireline telecommunications companies."

Devicescape Launches Secure Wireless

Devicescape Software introduced a Secure Wireless Client 1.0 (SWC) for consumer electronic devices. The embedded software package helps office and consumer electronics manufacturers bring Wi-Fi client devices such as converged mobile handsets, digital cameras and digital televisions to market quickly.

Devicescape said its Secure Wireless Client 1.0 can be used in fixed-mobile convergence, where handsets can switch between Wi-Fi and cellular, depending on the available network. Additionally, with SWC, OEMs have technology that gives end users that ability to manage their Wi-Fi connections.

Key features of the portable source code include:

  • Wi-Fi security, including WPA/WPA2 personal and enterprise, and a broad range of authentication methods

  • Off-the-shelf integration with the Windows CE 5.0, Windows Mobile 5.0 and Linux operating systems, and portability to most other embedded operating systems

  • Incorporation of SWC into the Wi-Fi Alliance test bed, giving manufacturers a high level of assurance that their SWC-based devices will be readily certifiable. Devicescape's software is the gold reference standard for the Wi-Fi Alliance.

Devicescape's SWC comes with pre-validated support for the latest client Wi-Fi chipsets from Atheros, Broadcom and Marvell. Pricing for licensing the Secure Wireless Client 1.0 begins at $50,000 per project.

Devicescape noted that its Secure Wireless Client has already been incorporated into a number of product designs, including Palm's Tungsten PDA, a WiFi-enabled LCD-TV from Sharp; and a multifunction WiFi-enabled printer from Brother.

Siemens Invests in Idiro for Data Mining in Wireless

Siemens Acceleration in Communications made an equity investment in Idiro Technologies, a start-up based in Dublin, Ireland. Siemens was joined in this first round of funding by Enterprise Ireland, the state development agency focused on backing innovative Irish companies.

Idiro has developed a new data mining approach for Mobile Network Operators (MNOs) that allows them to gain knowledge about inter-user behavior. The platform can handle huge amounts of activity data. In a second step, Idiro uses so-called Social Network Analysis (SNA) to further analyze the data, arranging subscribers into social communities. This knowledge about communities and which role within them a subscriber holds enables MNOs to tailor their marketing campaigns and reduce churn.

NEC Tests HSDPA with Vodafone in Japan

NEC completed field trials of its High Speed Download Packet Access (HSDPA) platform with Vodafone K.K. in Japan. During the trial, Node-Bs and radio network controllers (RNC) based on NEC's HSDPA were tested, including high-speed Internet access among HSDPA-based 3G mobile terminals, consecutive data transmission and handover in a HSDPA service environment and flexible and variable change in transmission speed.

"The success of this trial highlights NEC's confidence in the performance of its commercial HSDPA system. Delivery of our HSDPA to commercial networks worldwide will begin this autumn. We also intend to carry out operation trials in Europe and Asia through the cooperation of local mobile operators to ensure its successful spread." said Ryuichi Takanohashi, General Manager of Mobile Solutions Operations Unit.

NEC's HSDPA system is jointly developed by NEC and Siemens. The companies said that over 90% of the world's 3G subscribers are
currently communicating with 3G network technology provided by Siemens/NEC.

Trust Digital Raises $9 Million for Mobile Security Software

Trust Digital, a start-up based in McLean, Virginia, raised $9 million in Series B funding for its enterprise mobile security software solutions.

Trust Digital's software resides at the edge of the network where Smartphones and mobile devices have access to corporate information. The policy-based software helps corporations eliminate the regulatory and financial risks associated with the accidental or malicious disclosure of data. The software secures all forms of data resident on mobile devices at all times, independent of the method of data transfer or synchronization. It also meets the U.S. government's FIPS 140-2 validated encryption criteria for every mobile devices, including laptop PCs.

The funding was led by new investor BCE Capital (affiliated with Bell Canada Enterprises). Current investors Core Capital and Avansis Ventures participated in the Series B funding round. The company said this investment comes directly on the heels of several key carrier and enterprise wins.

Trust Digital also announced a significant expansion of its successful mobile carrier initiative, leveraging its market leadership position to enlist the most innovative mobile carriers to become key suppliers of security to the mobile enterprise. As such, Trust Digital recently won a contract to provide enterprise security on all mobile devices for one of the largest U.S. wireless carrier's internal operations.

Time Warner Cable Selects RAD's Pseudowire for TDM over Metro Ethernet

Time Warner Cable has deployed RAD Data Communications' TDMoIP pseudowire technology to support its metro Ethernet service in its Houston, Texas market.

RAD's IPmux family of TDMoIP gateways enable customers to take advantage of Time Warner Cable's Ethernet services while providing integrated support for existing TDM services over the same Ethernet transport network. RAD's IPmux family supports TDMoIP pseudowires -- the ability to transparently transport TDM circuits such as T1 and T3 across Ethernet, IP or MPLS networks.

Cellular Backhaul

One of Time Warner Cable's first customers for integrated Ethernet and TDM access was a large, nationwide cellular telephone provider. With the Time Warner Cable service, operators have access to high bandwidth, low latency Ethernet connections for tower-to-MSC connectivity and use RAD's IPmux pseudowire solution to transport the TDM traffic across the same Ethernet link. Cellular traffic is extremely sensitive to latency and packet loss. RAD's ASIC-based IPmux ensures very low latency with jitter buffers starting at 0.5ms and adaptive clock recovery accurate to within 16 parts per billion. The link redundancy feature helps provide Time Warner Cable's customers with rapid failover and reliable TDM transport.

RAD said it has shipped over 30,0000 ports of its pseudowire solutions over the past several years.

Ericsson to test HSDPA with Vodafone in Tokyo

Ericsson successfully upgraded Vodafone K.K.'s commercial network in central parts of Tokyo to support High Speed Downlink Packet Access (HSDPA), as specified in Release 5 of the 3GPP standard, in order to test HSDPA with Vodafone K.K.'s live network. The software and hardware in the HSDPA-enabled base stations supports downlink bit-rates up to 3.6 Mbps and uplink rates up to 384 Kbps; however, this capability has not been enabled for Vodafone K.K. customers at this time.

The two companies have been jointly performing lab trials of pre-commercial HSDPA equipment since September 2004 and field trials have been continuing since early 2005.

Performance Technologies Names CEO

Performance Technologies named Michael P. Skarzynski as President and CEO, replacing Donald L. Turrell who earlier this year announced his interest in a leadership transition in order to pursue his personal interests.

Michael Skarzynski most recently served as a senior advisor to Hudson Abel Partners, LLP, an investment bank in New York. For the previous six years, Mr. Skarzynski has led as CEO, two ventures -- Xebeo, an IP broadband switch acquired by UTStarcom, Inc., and Predictive Networks, an application service provider offering a business intelligence and analytics overlay network. From 1992 to 1999, he held various executive roles at AT&T, Bell Labs and Lucent Technologies.

Festoon Plug-in Adds Video to GoogleTalk

Santa Cruz Networks launched a Festoon update enabling Google Talk users to see who they are talking to and to share applications. The company already offers a similar plug-in for Skype that has more than 2.75 million downloads and more than 40 million video call user minutes.

Festoon is available for no charge thanks to sponsors.

Wednesday, November 2, 2005

Infineon and Kineto Test IMS over UMA

Infineon Technologies and Kineto Wireless demonstrated the delivery of several IMS-based applications using Unlicensed Mobile Access (UMA) technology to show the seamless handover between mobile and Wi-Fi access networks.

IMS is the open, standardized IP multimedia and telephony core network specification for mobile and fixed operators that is defined by 3GPP (3rd Generation Partnership Project). UMA is the 3GPP global standard for Mobile/Wi-Fi convergence that enables mobile subscribers to roam and handover between cellular networks and WLANs using multi-mode mobile handsets.

The demonstration consisted of Infineon's IMS client for mobile phones, operating with Kineto's UMA client on a GSM/GPRS/EDGE-WiFi handset platform. The demonstration showed how UMA provides session continuity of IMS-based presence and push-to-talk applications when the handset platform passed between a live GPRS network and Wi-Fi connection.


Deutsche Telekom Faces Major Staff Reductions, 32,000 Cuts in 3 Years

Deutsche Telekom announced a major staff reduction program that will see employment levels fall by 32,000 workers in Germany over the next three years. This includes about 7,000 employees whose positions will be outsourced from DT subsidiary Vivento on a permanent basis. These employees will no longer work for Deutsche Telekom, but for other companies. One example of this are the Vivento Call Centers. While a further 25,000 employees are to leave the Group, around 6,000 new staff are to be employed. The new positions might include young technical staff and trainees for T-Punkt shops. This would put the net reduction of jobs over the next three years at 19,000.

A majority of the cuts are expected to occur at T-COM, where some 20,000 jobs will be cut as part of the company's "Simplicity" project. Other cuts will include 1,500 in the Group's centralized functions and 5,500 at T-Systems. However, 5,000 jobs will be created for the rollout of the company's fiber-optic network.

"The worldwide realignment of the industry, the rapid pace of technological development and, in particular, the tough competitive environment in the fixed network and broadband sector in Germany imposed by the regulatory situation, intensify the challenges facing the entire Deutsche Telekom Group," CEO Kai-Uwe Ricke emphasized. "On the one hand, we have to cut jobs in old core markets; on the other, there are opportunities to create jobs in new innovative markets."

Deutsche Telekom said the reductions initially would occur by voluntary measures. Talks with the German federal government are expected to begin once the country's new government is in place.

Tropic Networks Names David Orr as Chairman

Tropic Networks, a developer of Wavelength Tracker powered DWDM systems, named David Orr as is Executive Chairman.

Before joining Tropic Networks, Mr. Orr was an operating partner at JP Morgan Partners. Previously, he served as CEO and President of Alcatel North America from 1991 to 1997, CEO and President, Broadband Technologies from 1998 to 2001, and CEO and President of Metro-Optix, which was acquired by Xtera Communications in 2003.
  • Tropic Networks, which is based in Ottawa, Ontario, Canada, developed a Reconfigurable OADM (ROADM) that enables service providers to remotely reconfigure add and drop capacity at each node. Tropic's system features an advanced optical layer management technology called "Wavelength Tracker".

  • In April 2005, Tropic announced that Scientific-Atlanta had agree to resell and support its intelligent wavelength transport platform to cable operators on an OEM basis.

  • In July 2004, Alcatel made an equity investment in Tropic Networks, a start-up offering metro-area optical networking gear. In addition to the financial investment, Alcatel also entered into a global agreement to market and distribute Tropic Networks products and technology. Financial terms were not disclosed.

  • Tropic Networks was founded in May 2000 by Kevin Rankin, formerly co-founder of the Broadband Copper Access division at Newbridge Networks; Dr. Dan Oprea, former senior architect at Nortel Networks and Mitel; Dave Coomber, former assistant VP of xDSL at Newbridge Networks; and Ben Bacque, co-founder of the Broadband Copper Access division at Newbridge Networks.

Pandatel Adds 10 Gbps Modules to WDM Platform

Pandatel AG introduced a 10 Gbps DWDM-module for its YUMIX 4ooo optical transmission platform. The 10 Gbps module is based on XFP technology and enables DWDM technology over 40 and 80 km. The protocols provided by YUMIX 10G modules are 10 Gigabit Ethernet, OC-192, and STM-64.

Comcast Sees Growth in VOD & Premium Services, Tops 8 Million Broadband Users

Citing strong consumer demand for new digital features including Comcast ON DEMAND, HDTV programming and digital video recorders (DVRs), Comcast Cable reported revenue of $5.3 billion for the quarter ended September 30, 2005, representing a 9.8% increase from the third quarter of 2004. Video revenue increased $184 million or 5.7% to $3.4 billion in the third quarter of 2005, driven by higher monthly revenue per basic subscriber and a 12.4% increase in the number of digital customers. Comcast Cable added 307,000 new digital customers in the third quarter of 2005 and with more than 9.4 million subscribers, digital cable penetration reached 44.1% of basic subscribers. Basic subscribers are essentially unchanged at 21.4 million, a modest decline of 0.4% from one year ago.

VOD and HDTV: Pay-per- view revenues increased 7.9% from the same period last year driven by movie and event purchases through the Comcast ON DEMAND service. During the third quarter, Comcast Cable deployed 326,000 advanced set-top boxes with DVR and/or HDTV programming capability, ending the quarter with a total of 2.3 million advanced set-top boxes in service. At September 30, 2005, 21.8% of digital customers have one or more advanced set-top boxes.

Broadband:: Comcast High-Speed Internet service revenues increased 26.1% to $1.0 billion in the third quarter of 2005, reflecting a 24.2% increase in subscribers and strong average revenue per subscriber. Comcast Cable ended the third quarter of 2005 with more than 8.1 million high-speed Internet subscribers, adding 437,000 subscribers during the quarter and resulting in a penetration rate of 19.9% of available homes. Average monthly revenue per high-speed Internet subscriber in the third quarter of 2005 of $42.88 was in line with a year ago.

Telephony: Comcast Cable added 46,000 Comcast Digital Voice (CDV) customers, reflecting the rollout of CDV in new markets including Washington, D.C., Seattle, Baltimore and Denver. As expected, CDV customer additions were offset by a decline in the number of Comcast's circuit-switched telephone customers as Comcast transitions to marketing Comcast Digital Voice. As a result, Comcast Cable reported 12,000 net new phone customers in the third quarter of 2005. Cable phone revenue remained relatively unchanged from the third quarter of the prior year at $171 million.

Advertising: Advertising revenue for the third quarter of 2005 increased 4.5% to $333 million, reflecting growth of 2.9% in local advertising and growth of 11.8% in regional/national advertising.

Cable CAPEX: Cable capital expenditures increased 3.2% to $899 million compared to the $871 million in the third quarter of 2004 reflecting increased purchases of digital set-top boxes to meet strong demand for digital services and higher costs associated with readiness and deployment of CDV.

Including its content and other divisions, Comcast reported consolidated revenues of $5.6 billion, a 9.4% increase from the $5.1 billion reported in the same period of 2004. Consolidated Operating Cash Flow increased to $2.1 billion or 12.9%, in the third quarter of 2005, from the $1.9 billion reported in the same prior year period. Operating income increased to $883 million in the third quarter of 2005 compared to operating income of $686 million in the third quarter of 2004.

Brian L. Roberts, Chairman and CEO of Comcast, commented: "Last month, we delivered our 1 billionth ON DEMAND program this year. Comcast High-Speed Internet exceeded $1 billion in revenue this quarter and at 20% penetration, we believe this business has significant growth potential. Comcast Digital Voice service is now available to 12 million households in 21 markets. The rollout of this new service is just getting started, and we expect Comcast Digital Voice to be another meaningful driver of growth for years to come."http//

ntl Cites Demand for Triple Play Services

ntl reported Q3 revenue of GBP 482.7 million, down 3.2% compared to the prior year period due to lower business revenue.

Consumer revenue in the third quarter was GBP 377.5 million, with strong broadband revenue offsetting lower revenue in telephony and TV. Net residential customers increased by 53,900 (41,400 on-net) to end the quarter with 3.32 million customers (3.10 million on-net), a 6.9% increase over Q3 2004 (2.8% on-net).

ntl added 140,500 net RGUs (121,300 on-net), ending the quarter with 6.32 million RGUs (6.09 million on-net), a 7.0% increase over Q3 2004 (4.5% on-net). On-net RGUs per customer improved to 1.96, up from 1.93 in the same period last year. This strong performance reflects the success of targeted offers and bundled packages with superior value over standalone offers. As expected, churn was up sequentially due to seasonality and is expected to return to customary ranges in the fourth quarter. Strong RGU growth, particularly in broadband, which increased by 484,400 or 41.2% (372,800 on-net or 31.8%) compared to the same period last year, was offset by weakness in telephony revenue, which was down due to reduced usage, and lower TV revenue resulting from fewer Sky premium subscribers and lower second set-top box revenue.

Over the past two quarters ntl has increased subscribers in telephony, broadband and DTV, adding 16,300 telephony RGUs (26,900 on-net) and 21,400 DTV RGUs, which were offset by a decline of 41,400 ATV RGUs. More significantly, ntl added 277,400 (221,400 on-net) broadband RGUs, bringing total broadband customer base to 1.72 million (1.55 million on-net), the largest of any residential broadband provider in the U.K.

Customers taking all three services increased 21.1% cent from the third quarter of last year, and 8.4% sequentially, bringing triple customer penetration to 27.2% on-net.

VoD deployment continues on schedule and ntl anticipates the service will be available to 600,000 customers by year-end. During the quarter ntl secured an additional 242 hours of programming content ranging from movies to music. In addition ntl has also launched a new TV Hits VoD service, offering over 50 hours of hit TV shows from the past.

Commenting on the results, Simon Duffy, Chief Executive Officer of ntl, said: "As we have intensified our focus on RGU growth and triple-play penetration, with an increased emphasis on quality and value of acquisitions, we are delivering more services at the point of sale than at any time in our history. Complemented by our cross-sell and up-sell initiatives, this has yielded an additional 147,100 triple-play customers, which bodes well for revenue and ARPU growth in subsequent periods.

Total broadband growth of 484,400 and on-net growth of 372,800 over the past 12 months have been particularly strong and we are upping our guidance for on-net broadband growth in 2005 from 20-25 percent to 25-30 per cent."
  • Last month, ntl confirmed plans to acquire Telewest for GBP 3.4 billion ($6 billion), creating the UK's second largest communications company with a cable footprint covering more than 50% of the nation's households. The combined company will have nearly 5 million customers, including 2.5 million residential broadband subscribers and the second largest fixed telephony supplier with 4.3 million subscribers. The companies said their merger would allow an accelerated deployment of next generation services, including HDTV, VOD and VoIP.

ECI Telecom Reports Q3 Revenue of $162 Million, up 26% yoy

ECI Telecom reported Q3 2005 revenue of $162 million, a 26% increase from the $128 million recorded in the third quarter of 2004 and up 6% compared to the $153 million recorded in the second quarter of 2005.
Net income for the third quarter of 2005 reached $6.2 million, or $0.05 per share on a fully diluted basis, compared with third quarter 2004 net income of $6.0 million, or $0.05 per share and compared with $15.6 million, or $0.13 per share, in the second quarter of 2005.

Optical Networks: Revenues for the Optical Networks Division totaled $85 million for the third quarter of 2005, up 23% from the year ago period and up 4% from the second quarter of 2005. Operating income for the Optical Networks Division jumped 472% over the third quarter last year and reached $12.7 million, up 43% compared to the second quarter of 2005. The Division's operating margin reached 15% in the quarter. The very strong sequential and year-over-year growth in operating income was driven by the continued strong demand from carriers for ECI's optical solutions. This resulted in increased revenues and improved gross margins for the Division.

Broadband Access: Revenues for the Broadband Access Division totaled $68 million for the third quarter of 2005, up 26% from the year ago period and up 8% from the second quarter of 2005. Operating income for the Broadband Access Division reached $4.5 million, compared to $6.4 million in both the year ago and second quarter 2005 periods. The decline in operating income was primarily related to the geographical sales mix during the quarter as well as the ramping up of new IPTV deployments in Europe.

Data Networking: Revenues for the new Data Networking Division (formerly Laurel Networks) were still minimal and totaled $2 million for the third quarter of 2005, while the operating loss was $7.7 million, reflecting the relatively low revenues and intensive R&D efforts currently underway in the Division. ECI's second quarter 2005 results reflected less than one month of Laurel's operations, following its acquisition in June 2005 and included an operating loss of $2.3 million on sales of $0.4 million.

Mexico's MCM Deploys Juniper/Lucent for IP/MPLS

MCM Telecom has deployed Juniper Networks' M-series Multiservice Edge routers to upgrade its IP/MPLS routers in Mexico City. The carrier operates metropolitan fiber optic networks in Mexico City, Monterrey, and Guadalajara and offers a complete range of voice and data services to businesses. Services include IP-based voice solutions, business-focused high capacity data services, and point-to-point and point-to-multipoint optical network transport.

Working with Lucent, MCM has deployed Juniper Networks M10i and M7i Multiservice Edge Routers.

HNS Acquires Additional Capacity Aboard SES AMERICOM AMC-9 Satellite

Hughes Network Systems HNS has contracted for additional transponders aboard the AMC-9 satellite to serve its growing base of DIRECWAY broadband satellite customers throughout North America. SES AMERICOM also announced its full support of HNS's new DIRECWAY DW7000 broadband platform and the global Internet Protocol over Satellite (IPoS) standard on which it is based, as part of an ongoing effort to deliver high-speed, high quality satellite connections virtually anywhere.

Under the multi-year agreement, HNS, the world's largest provider of satellite broadband products and services, will expand its use of Ku-band transponders aboard the dependable AMC-9 spacecraft. HNS, which has relied on SES AMERICOM satellites for nearly a decade, is already using the AMC-3 and AMC-4 satellites to deliver a broad range of IP-based private network solutions and high-speed Internet services.

Launched in 2003, AMC-9 is an Alcatel Spacebus 3000B3 hybrid C- and Ku-band satellite, which is located at 83 degrees west longitude.