Thursday, August 10, 2006

AWS Auction Reaches $2.4 Billion in Bids, T-Mobile Leads

After 8 rounds, the FCC's auction of licenses for Advanced Wireless Services (AWS-1) spectrum has reached $2.4 billion in bids.

The Top Ten Bidders by Net Provisionally Winning Bids so far:

  • T-Mobile License

  • Dolan Family Holding (holder in Cablevision)

  • Spectrum Co. (backed by Comcast, Time Warner, Cox and Sprint Nextel)

  • Cricket Licensee

  • MetroPCS

  • AWS Wireless Inc.

  • Wireless DBS LLC - (backed by DirecTV, News Corp, Fox, EchoStar, Rupert Murdoch, and EchoStar)

  • Barat Wireless

  • Cavalier Wireless

  • Antares Holdings

Daily results from the bidding are posting online.
  • AWS-1 bands are currently being used for a variety of Government and non-Government services and require relocating incumbent operations. The lower half of these paired frequencies, i.e., 1710-1755 MHz, is currently a Government band and is covered by a Congressional mandate that requires that auction proceeds fund the estimated relocation costs of incumbent federal entities. The upper half of these paired frequencies, i.e., 2110-2150 MHz band, is used by private (including state and local governmental public safety services) and common carrier fixed microwave services (�FS�). The 2150-2155 MHz band is currently used by the Broadband Radio Service (BRS).

Motricity Raises $32 Million for Mobile Marketplace

Motricity, a start-up headquartered in Research Triangle Park, N.C., received $32 million for its solutions for the mobile content industry. Concurrently, the company announced the appointment of David Holland, vice president and treasurer of Cisco Systems and Steve Clark, former chief executive officer of SpectraSite Communications, to its board of directors.

The $32 million is part of a larger funding round that will close in stages in the coming weeks. It was led by Advanced Equities Inc. with participation from other existing investors.

Motricity's Mobile Marketplace Management enables consumers to receive the right content at the right time. Its mobile content delivery platform, "Fuel", is used by content partners such as BET, CBS, NBC, Turner, Cingular, Verizon Wireless, Alltel, Sprint,, Palm and others.
  • In July, Motricity acquired Los Angeles-based GoldPocket Wireless, a leader in mobile interactivity and marketing solutions for media and entertainment companies, broadening Motricity's customer footprint. The acquisition of GoldPocket Wireless extends Fuel's capabilities, adding messaging aggregation to more than 200 million mobile subscribers and marketing campaign management.

Telstra Reaches 1.48 million Broadband Users

Telstra announced a profit after tax of AUD$3.18 billion for the financial year ended 30 June 2006, a decrease of $1.13 billion or 26.2 percent on the prior year. Earnings before interest and tax (EBIT) declined by 20.7 percent or $1.44 billion to $5.50 billion, at the better end of the market guidance decline of 21 to 26 percent.

Some highlights:

  • Total income (excluding finance income) grew by 2.9 percent or $658 million to $23.10 billion due to increases in broadband, mobiles, Sensis, IP solutions, inter-carrier services and pay TV bundling, offset by a decline in revenues from PSTN, specialized data and ISDN products. Sales revenue grew 3.9 percent in the second half, more than double the first half growth rate, and 2.7 percent for the year.

  • Internet and IP services revenue grew $530 million or 38.5 percent to $1.91 billion, driven by retail broadband revenue growth of $267 million or 57.7 percent and increased use of data services by business customers.

  • Telstra added 303,000 retail broadband subscribers in the second half and 620,000 for the full year, bringing the subscriber base to 1.48 million. The company holds 44% of Australia's broadband market.

  • Total mobile goods and services revenue growth was 6.1 percent or $284 million to $4.97 billion. Construction of the new 3G 850 network is ahead of schedule and more than three-quarters completed.

  • PSTN products revenue was $7.48 billion, a decline of 6.7 percent or $540 million for the year, with a decline of 7.6 percent in the first half and 5.8 percent in the second. There has been a general reduction in PSTN volumes and yield declines due to competitive pricing pressure and continuing customer migration to other products. Since June 2005, Telstra has lost 270,000 retail lines, while wholesale gained 90,000 lines.

  • Telstra's total workforce has been reduced by 3,859 full time equivalent staff, contractors and agency staff excluding the CSL New World merger (3,262 allowing for the merger).

CommScope Drops Bid to Acquire Andrew

CommScope, which is the global leader in structured cabling systems for business enterprise applications and also the largest manufacturer of coaxial cable for Hybrid Fiber Coaxial (HFC), decided not to pursue its proposal to acquire Andrew Corporation at the present time.
  • A day earlier, Andrew Corporation had rejected CommScope's proposal to acquire all of Andrew's outstanding shares for $9.50 per share in cash.

AT&T Supplies MPLS-based Services to Geotech

AT&T was awarded a three-year contract to provide AT&T will provide a variety of network and voice services to Environmental Equipment, Inc., which is based in Denver and has offices across the U.S. and one in Spain. AT&T will provide MPLS Private Network Transport (PNT), Managed Internet Service, IP Telephony, and local and long distance voice services.

Deutsche Telekom Takes 10% Stake in Click&Buy

Deutsche Telekom's T-Online Venture Fund has made a 10% investment in Switzerland-based FIRSTGATE Holding AG, which owns Click&Buy, Europe's leading provider of Internet payment services.

Click&Buy makes it possible for providers to outsource complex billing for paid content, services and goods. The system handles both billing in various currencies and the processing of credit cards, direct debits and the 40 most commonly used payment procedures in Europe. Click&Buy's customers include Electronic Arts, T-Online Gamesload, Apple iTunes, Skype, Nero, Tiscali, and others.

In addition to expanding the business relations between T-Pay, the online payment system by T-Com, and Click&Buy, the plan is to achieve interoperability. In future, this will open up the possibility for T-Pay, one of the leading German payment systems, to offer payment of T-Com bills through Click&Buy as well.

More than 40 million telephone customers will then have the opportunity to pay simply, safely and quickly with T-Pay through Click&Buy.


Japan's JCSAT-10 Satellite Launched

The JCSAT-10 telecommunications satellite was successfully launched from Kourou, French Guiana aboard an Ariane 5 rocket. JCSAT-10, which was designed and built by Lockheed Martin for JSAT Corporation of Japan, is the fourth in a series of six A2100 satellites planned this year and the second of three satellites the company will deliver to JSAT. JCSAT-9 was launched earlier this year and JCSAT-11 is scheduled for launch in 2007.

JCSAT-10 is a high-power hybrid satellite consisting of 30 active Ku-band transponders and 12 active C- band transponders that will provide coverage to Japan, the Asia-Pacific region and Hawaii. JCSAT-10 will operate from 128 degrees east and is designed for a minimum service life of 15 years.

Lockheed Martin's A2100 geosynchronous spacecraft series is designed to meet a wide variety of telecommunications needs including Ka-band broadband and broadcast services, fixed satellite services in C-band and Ku-band, high- power direct broadcast services using the Ku-band frequency spectrum and mobile satellite services using UHF, L-band and S-band payloads.

Ericsson Selected by Poland's Polkomtel

Polkomtel awarded a 3 year managed services contract to Ericsson to manage the design, development, deployment and integration of a new multi-vendor 2G/3G network in Northern and Western Poland, starting October 1, 2006. Under the contract, 20 employees from technical departments will be transferred from Polkomtel to Ericsson and will further strengthen the services organization of Ericsson in Poland.

The managed services contract complements the previous network implementation agreement between Ericsson and the operator. Polkomtel will remain the owner of the network.

Wednesday, August 9, 2006

Cisco Takes 80% Stake in Nuova Systems for Data Center Solutions

Cisco Systems has committed certain technology and $50 million of funding to Nuova Systems, a start-up based in Santa Clara, California, with the possibility of up to $42 million in additional funding in the future. The subsidiary will be approximately 80% owned by Cisco, with the remaining 20% interest held by employees of the subsidiary. Sales from the subsidiary will be consolidated with the accounts of Cisco starting in fiscal year 2007.

Cisco said it made the investment in Nuova to accelerate next-generation product development in the data center. Nuova Systems' product development efforts will complement Cisco's current data center product portfolio which includes the Catalyst 6500, Cisco's core enterprise networking platform, the MDS line of storage switches, SFS server networking switches and application networking solutions for accelerating applications within the data center and to the rest of the enterprise.

Cisco has the option to purchase the remaining 20%. The potential payouts made under the call option are primarily based on the success of Nuova Systems' products sold through Cisco, with a minimum potential payout of $10 million and a maximum total payout of $578 million.

Nuova Systems, which has not yet announced any products or plans, has 76 employees and is based in Santa Clara, California. Nuova Systems' founders include former Cisco executive Mario Mazzola.
  • In July 2005, Cisco Systems named Charles H. Giancarlo as chief development officer, replacing Mario Mazzola who retired from Cisco after serving over 12 years in engineering leadership roles.

Andrew and ADC Terminate Merger Agreement

Andrew Corporation and ADC Telecommunications Inc. have mutually agreed to terminate the merger agreement announced on May 31, 2006 without liability to either partner. To effect the mutual termination, Andrew has agreed to pay ADC $10 million. In addition, Andrew has agreed that ADC would be paid another $65 million in the event Andrew effects a business combination transaction within 12 months.

"While we still believe in the convergence strategy, the merger of Andrew and ADC was only one method to execute against that," said Ralph Faison, president and chief executive officer, Andrew Corporation.

"While we believed in the strategic rationale of this combination and are disappointed that the merits of the transaction were unrecognized in the marketplace, we will continue to execute on our strategy to become the leading supplier of network infrastructure solutions to our customers worldwide," stated Robert E. Switz, president and CEO of ADC.

Separately, board of directors of Andrew Corporation voted unanimously to reject an unsolicited proposal from CommScope, to acquire Andrew for $9.50 per share in cash. The board described CommScope's proposal as "wholly inadequate and not in the best interests of its shareholders."http://www.andrew.com
  • Under the stock swap deal announced in May, the combined company would have been based at ADC's world headquarters in Minnesota with ADC's John A. Blanchard continuing as non-executive chairman, and ADC's Robert E. Switz continuing as its president and CEO. The combined would have had and estimated $3.3 billion in annual global sales of wireline and wireless equipment.

    ADC supplies broad-based connectivity solutions for copper, coaxial, fiber, radio frequency, broadcast and enterprise networks. Andrew provides broad-based wireless solutions for antennas, cable products, base station subsystems, in-building and distributed coverage, geolocation systems and satellite communications.

Deutsche Telekom Plans Aggressive Price Cuts, Accelerated Move to IP Platform

In a press conference to review its half year performance, senior managers of Deutsche Telekom vowed to take a much more aggressive approach to competition in its domestic markets in the second half of 2006 with price cuts, bundled products and the launch of new services. The company is losing high-margin revenue in Germany while growing internationally where margins generally tend to be lower. DT plans to respond by defending its market share and revenues in Germany.

Earlier in the week, the company trimmed its financial outlook for the remainder of the year.

The newly released financial report shows DT's net revenue rose by 3.2 percent to 30.0 billion EURs in the first half of the year. Adjusted EBITDA fell by 2.4 percent to 9.8 billion EURs. Cash flow from operating activities remained almost stable at 5.7 billion EURs. At 2.1 billion EURs, net profit was also at the prior-year level.

In contrast, revenues generated outside of Germany increased 13.5% to EUR 13.6 billion.

DT said the mobile business in Germany is marked by aggressive competition, a massive drop in prices and cuts in termination charges. In the first half of 2006, T-Mobile Deutschland's revenue declined by 3.3 percent despite an increasing customer base.

T-Mobile plans to respond with a highly simplified and lower prices. New bundled offers will cost under 10 cents per minute regardless of network termination.

More than 700,000 customers are now signed up for the T-Mobile@home service, including the addition of 187,000 users in Q2.

Domestic revenue in DT's broadband/fixed network strategic business area declined by 6.5 percent year-on-year in the first six months of 2006. The decrease in access, call and interconnection revenue had a negative impact on development, as in previous quarters.

T-Com lost approximately 500,000 lines in the second quarter of 2006 as a result of customers' switching to other network operators and to the cable network, and as a result of mobile substitution. Over 1 million lines losses have been recorded this year -- more than expected.

In Q2, there were about 400,000 domestic DSL additions, bringing the total count to 8.96 million. At the same time, 387,000 of the DSL additions were sold by other retailers. That means the DSL resellers are now accounting for 96% of growth.

T-Com plans to respond with a new pricing and product structure in the fall that is geared towards bundled products and is aimed at customers considering changing to bundled offers of alternative network operators. There will be new pricing plans for single-play, double-play and triple-play bundles. Double-play (telephony + broadband will cost under EUR 40).

T-Systems revenue is down around 2.7% year-on-year. Revenue in Germany has declined by 5.2%, as voice and access prices have fallen faster than expected. On the positive side, business process outsourcing continues to grow.

Internationally, T-Mobile USA added 613,000 users in Q2, giving it a total customer base of 23.3 million. This is below the 972,000 new adds recorded in Q2 2005, although the contract periods have been increased from one-year to two-years.

DT is trimming its CAPEX budget from EUR 10 billion to EUR 9 billion for the current year, not including potential spectrum acquisition costs in the U.S.

DT also faces staff restructuring costs affecting 32,000 employees by 2008. By the end of June, 5,100 employees had decided to leave the company.

"The industry is in the middle of a transformation phase... We will take an even more systematic approach to defending our market share and revenues in Germany -- by slashing costs and implementing simpler, cleaner price structures. At the same time, we plan to develop new products to retain our existing customers and attract new ones where possible.

"We will substantially reduce our cost base, mainly by accelerating the expansion of our IP-based broadband network platform.... To this end, our investments in the IP-based production platform will be made earlier than we planned."

T-Com Selects Ericsson for Broadband Rollout

Deutsche Telekom's T-Com broadband/fixed-network business unit has selected Ericsson's EDA solution for the expansion of its German broadband network. The rollout has already started for fiber-to-the-curb areas in Germany. Financial terms were not disclosed.

Ericsson EDA is an IP-DSLAM solution.

Under the agreement, Ericsson will deliver all nodes required for the different areas of the access network. Ericsson EDA will integrated into the existing T-Com network architecture, allowing the operator to increase coverage nationwide and increase speed up to 6Mbps.

Sprint Nextel Suffers Outage in NYC

Sprint Nextel suffered an outage in the borough of Queens, New York that was attributed to water damage at a central office operated by Verizon Communications.

The outage affected customers on the Nextel network and not the Sprint PCS network.

The incident was first reported by Reuters.

hanarotelecom Cites Gain in Broadband, Launches hanaTV

Korea's hanarotelecom announced a 21.2% gain in revenues to KRW 428.7 billion and a 22.4% increase in EBITDA to KRW 132.8 billion for the second quarter of 2006.

The company reported a broadband net addition of about 30,000 subscribers in Q2, a turnaround from net decrease in the previous quarter. The number of voice subscribers has continued to grow by around 20,000 net subscribers per month on average.

The company also noted the expansion of its 100 Mbps optical LAN coverage to 3.2 million households, which accounts for 60% of its apartment DSL coverage.

hanaro also highlighted the launch of "hanaTV", a commercial VOD-based TV-Portal service that provides various contents including movies, dramas, and educational programs through a broadband Internet connection and an IP Set-Top Box. The company said it is adding nearly 2,000 new subscribers each day and that it has attracted a total of about 30,000 subscribers since launching the service at the end of July. HanaTV has secured more than 16,000 hours of VOD content through agreements with more than 50 domestic/foreign content providers, including the Walt Disney Television, CJ Entertainment, SBS, BBC Worldwide, YTN, EBS, Daum, and National Geographic.

Hanaro has a target of attracting 250,000 subscribers by the end of 2006. The company will offer a full-blown Triple Play Service in the second half of the year, bundling a TV-Portal with broadband and voice services.

Alltel Wireless Offers XM Satellite Radio

Alltel Wireless will begin offering XM Satellite Radio programming via mobile phone for $7.99 per month. The mobile phone application was developed by MobiTV.

Alltel Wireless customers will receive audio streams of 20 popular commercial-free XM music channels including: The 70s, 80s and 90s decades channels, Top 20 on 20 (Top 20 Hits), Ethel (New Alternative Rock), The City (Hip-Hop/R&B Hits), XMU (Indie Rock), Bluesville (Blues), Highway 16 (New Country Hits), and Viva (Latin Pop Hits).

Juniper Finds Problems in Past Stock Option Practices

Juniper Networks issued a statement saying that its Audit Committee has reached a preliminary conclusion that the actual measurement dates for financial accounting purposes of certain stock option grants issued in the past differ from the recorded grant dates of such awards.

Juniper now plans to restate historical financial statements to record additional non-cash charges for stock-based compensation expense related to past option grants. The company has not determined the amount of such charges, the resulting tax and accounting impact, or which specific periods require restatement.

Axiom Signs Czech-based Vegacom as Reseller

Axiom Systems, which supplies service fulfillment software for telecommunication service providers, has signed Czech Republic-based systems integrator Vegacom as a Value Added Reseller for the company. The two companies join forces in order to provide regional service providers in the Czech Republic and Eastern European markets with Axiom Systems' 3rd generation AXIOSS OSS platform and Vegacom's integration expertise and consulting skills.

Sea Launch Prepares to Launch Koreasat 5 Satellite

Sea Launch is entering final preparations to launch the Koreasat 5 communications satellite on August 21 into an orbital position of 113 degrees East Longitude.

Built by Alcatel Alenia Space in Cannes, France, the hybrid spacecraft carries 36 active transponders in multi-band frequencies. Koreasat 5 is owned jointly by the Agency for Defense Development of Korea and KT Corporation. The Agency for Defense Development has managed the military side of the Koreasat 5 program and the Joint Chief of Staff of Korean Armed Forces will operate SHF and Ka-band transponders on the spacecraft to provide satellite communications services.

KT will operate 24 Ku-band transponders. Half of these will be capable of switching to regional beams to provide advanced broadband multimedia and digital television transmission services, as well as conventional telecom services to operators in the Asia-Pacific region. The remaining 12 Ku-band transponders will replace Koreasat 2 capacity for domestic use in South Korea.

Tuesday, August 8, 2006

Lucent to Resell TCS' Location-based Application in IMS Portfolio

Lucent Technologies will resell TeleCommunication Systems' (TCS')location-based solutions and applications. Specifically, Lucent will offer the TCS Xypoint Location Platform and Xypoint Secure User Plane for Location (SUPL) Server with its IP Multimedia Subsystems (IMS) solutions portfolio, including the Lucent Intelligent Services Gateway (ISG), iLocator application and managed service offerings to provide network operators integrated location-based solutions. The location-based services include navigation, "family finder", asset and fleet tracking, location-specific traffic and weather information, and location-based mobile alerts and advertising.

TCS said its location technology originated from its experience working with CDMA, TDMA, GSM, and UMTS operators over the last eight years. Its track record in location-based solutions include:

  • First location-based call placed by a wireless operator (supporting E9-1-1)

  • First location solution to support UMTS

  • Used by more than 45 wireless operators around the world

  • Supports handset-based (AGPS) or network-based (triangulation) location technologies

  • Supports UMTS, GSM, CDMA, and iDEN wireless infrastructure

  • Currently deployed to support multiple wireless operators from a single infrastructure

Deutsche Telekom Trims Guidance, Warns of Competitive Pressure

Citing competitive pressures in its home market, Deutsche Telekom AG trimmed its revenue guidance from the previous range of between EUR 62.1 billion and EUR 62.7 billion to between EUR 61.5 billion and EUR 62.1 billion. Revenue is expected to continue to grow at a moderate rate in 2007.

The company said the reduction in high-margin revenues in Germany will lead to a drop in expectations for adjusted EBITDA for the 2006 financial year to between EUR 19.2 billion and EUR 19.7 billion. Previous guidance was between EUR 20.2 billion and EUR 20.7 billion. Adjusted EBITDA for 2007 is expected to remain at approximately the 2006 level.


billions of EUR
Revenue Adjusted
Guidance old new old new
Fixed network
- 25.2
- 25.0
- 9.6
- 9.0
- 32.3
- 32.3
- 10.2
- 10.0
- 13.6
- 12.8
- 1.6
- 1.3
Group 62.1
- 62.7
- 62.1
- 20.7
- 19.7