Wednesday, February 28, 2007

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Deutsche Telekom Posts Contiued Decline in Home Market, Growth Abroad

Deutsche Telekom reported its 2006 results. Two key trends stood out: in Germany, intense competition was met with a major drop in prices; meanwhile, significant growth continued in the company's international business.

Overall, net revenue increased by 2.9 percent year-on-year to EUR 61.3 billion. Based on adjusted net profit of EUR 3.9 billion and free cash flow (excluding the investment in Mobile Communications spectrum in the United States) of EUR 5.7 billion, the Board of Management and the Supervisory Board will propose a dividend of EUR 0.72 per share to the shareholders' meeting on May 3, 2007.

Some highlights:

  • Domestic revenue declined by around EUR 1.7 billion or 5.0 percent year-on-year to EUR 32.5 billion in 2006.

  • Revenue generated outside Germany increased by EUR 3.5 billion or 13.6 percent to EUR 28.9 billion. International business therefore generated 47.1 percent of the Group's net revenue, compared with 42.7 percent in 2005.

  • T-Mobile Deutschland recorded a decline in revenue of 4.7 percent to EUR 8.2 billion in the 2006 financial year. This decrease was attributable in part to the continued drop in prices of more than 10 percent in the German mobile communications market and the effects of the reduction in termination charges imposed by the regulator in November 2006.

  • Domestic revenue in the Broadband/Fixed Network business area decreased by around 6.1 percent in 2006 to EUR 21.8 billion. This is mainly the result of lower revenues from Network Communications where the migration of lines from T-Com's network to alternative fixed-network providers and to mobile communications as well as the continued decline in prices led to a drop in revenues of EUR 1.1 billion or 9 percent, mainly from lower call revenues.

  • Bundling continues to grow. At the end of 2006, the number of complete packages marketed had increased to 3.6 million. More than two thirds of the packages sold were double-play (telephone and Internet).

  • In Q4, T-Com recorded 880,000 new broadband lines, its highest ever quarterly DSL growth in Germany since market launch. The proportion of broadband lines that were marketed by T‑Com itself increased significantly in the last quarter of the year: from 19.0 percent in the third quarter to 64.0 percent in the fourth quarter.

  • As of the end of 2006, Deutsche Telekom was serving 11,716,000 total broadband lines, of which 10,280,000 were domestic, and 3,212,000 were resale.

  • As of the end of 2006, narrowband lines numbered 38,961,000 down from 41,243,000 a year earlier.

  • As of the end of 2006, total mobile subscribers across the group were 106,419,000, up from 97,846,000 a year earlier.

Deutsche Telekom Renews Focus on Broadband and Mobile Internet

Deutsche Telekom will center is long-term strategy on broadband services and the mobile Internet, said company CEO René Obermann, speaking at a press conference in Bonn.

Key points of the strategy include:

  • Simplifying the company's branding. T-Home will offer services for the home and T-Mobile for on the move. The new brand portfolio will be rounded off in Germany with a second brand comprising mobile communications and DSL offerings specifically aimed at extremely cost-conscious customers and launched before the summer holidays.

  • Securing the Group's competitiveness in its home market of Germany. "Germany is our most important market. The best successes abroad are only of limited use if we don't get business on our home market under control."

  • International expansion. DT intends to expand in the mobile communications sector, potentially also in new markets and regions. This might be accomplished through strategic acquisitions that would be partially financed by the sale of non-strategic business units. Specifically under review are the T-Systems Media & Broadcast unit (a service provider for the broadcasting and media industry), DeTeImmobilien (real estate), Club Internet and (the Internet companies in France and Spain) along with radio towers in Germany and the United States, plus the remaining shares in the real estate company Sireo.

  • DT hopes to have 1.5 million IPTV users by 2010.

"The Group intends to grow in the mobile communications and fixed-network market for consumers in the coming years, particularly on the strength of broadband offerings, said Obermann.

Cisco Teams with NTT DoCoMo Dual-Mode IP Telephony Solution

Cisco will provide a dual-mode IP telephony solution matched to NTT DoCoMo's N902iL FOMA / wireless LAN dual-mode mobile phone and 3G network.

The SIP-based solution will leverage the Cisco Unified CallManager and the Cisco Unified Wireless Network to extend rich office IP communications capabilities to NTT DoCoMo dual-mode mobile handset.

When connected to the Cisco Unified Wireless Network in the office environment, employees will be able to place, receive, hold and forward calls just as they would from a desktop IP phone. Additionally, employees will be able to access office voicemail and interact with other office IP telephony features from their mobile phones. The mobile handset and Cisco Unified Wireless Network both support 54 Mbps Wi-Fi standard IEEE 802.11g along with IEEE 802.11e to ensure network performance and quality of service for voice traffic on the wireless LAN. Outside the office, the N902iL will operate on the NTT DoCoMo FOMA network and will receive incoming office calls using Cisco's mobile solutions for unified communications.

"NTT DoCoMo welcomes the support of Cisco Unified CallManager and Cisco's Unified Wireless Network, which are used by many people in the wireless LAN market. This integration was something our customers had requested since the release of our previous model, N900iL," said Hiroshi Sawada, Managing Director of NTT DoCoMo's Solution Business Department.

PMC-Sierra Appoints Former Wind River Exec as CFO

PMC-Sierra named Michael W. Zellner as vice president, chief financial officer (CFO). Prior to this appointment, Mr. Zellner was senior vice president of finance and administration and chief financial officer at Wind River Systems, Inc., a device software solutions provider to the electronics industry. Prior to Wind River, Mr. Zellner was senior director of finance at Applied Materials, Inc. where he was responsible for two separate business units with revenues in excess of $1 billion.

Zarlink Releases Single-Chip Gigabit Ethernet Line Card Synchronizer

Zarlink Semiconductor expanded its family of Synchronous Ethernet timing solutions with a new single-chip Gigabit Ethernet line card synchronizer. The new chip provides timing and synchronization for Ethernet line cards in next-generation networking equipment supporting circuit services over IP-based architectures.

The device integrates independent analog and digital PLLs, the device synchronizes with standard telecom and Ethernet clocks, and generates an IEEE 802.3 jitter compliant 25 MHz Gigabit Ethernet output clock.

"Synchronous Ethernet is a key technology as service providers aggressively seek new ways to more efficiently support time-sensitive applications over packet networks," said Darren Ladouceur, marketing manager, Timing and Synchronization, Zarlink Semiconductor.

U.S. Fiber Subscribers to reach 18 million by 2011

The number of U.S. households subscribing to FTTx (fiber connections) will increase from three million in 2007 to 18 million by the end of 2011, according to a new report from Parks Associates.

"FTTx and BPL: Analysis and Outlook" analyzes the market trends and significant events that will impact FTTx and BPL deployments over the next five years. It also addresses the consumer and competitive pressures that will influence these methods, the economics associated with the deployment of these technologies, and the opportunities FTTx and BPL provides for vendors and service providers.

"While fiber is a small percentage of total U.S. broadband household subscriptions today, it will achieve a faster growth rate than what DSL and cable did after their inception," said Chris Roden, research analyst at Parks Associates.

Huawei Records 28 New UMTS/HSPA contracts in 2006

Huawei Technologies signed 28 new UMTS/HSPA contracts in 2006, giving it a total of 47 such projects worldwide. The company reckons it is now one of the top three players in this space.

FCC Clarifies VoIP-PSTN Interconnection Rules

The FCC granted a petition from Time Warner petition that clarifies rules of how voice traffic can be exchanged between broadband providers and the PSTN. By granting the petition, the FCC affirmed that competitive local exchange carriers (CLECs) are entitled to interconnect with incumbent local exchange carriers (ILECs) pursuant to section 251 of the Telecommunications Act for the purpose of exchanging traffic on behalf of VoIP-based service providers.

FCC Chairman Kevin Martin stated: "Our decision will enhance consumers' choice for phone service by making clear that cable and other VoIP providers must be able to use local phone numbers and be allowed to put calls through to other phone networks."

Jim Kohlenberger, Executive Director of VON Coalition, stated "The VON Coalition applauds today's FCC decision to answer the call for voice competition by ensuring that voice traffic can be exchanged between broadband and telephone networks. The FCC was right to find that states cannot unilaterally twist the meaning of the Telecom Act to hang up on broadband enabled voice competition. Today's decision helps ensure that millions more American consumers can take advantage of power and potential of Internet based communications. The problems that Time Warner faced in South Carolina and Nebraska were not isolated, they threatened the competitive availability of VoIP services overall, and they effectively created "digital divides" between those Americans who can enjoy the full potential of broadband and those who cannot."

Tundra Posts Revenues of $21.7 Million, Partners with Enea

Tundra Semiconductor reported revenue $21.7 million for its third quarter of fiscal 2007, a 16% increase over the third quarter in fiscal year 2006, and a 1% decrease from the second quarter of fiscal year 2007. Pro forma earnings of $3.0 million represent a 34% increase compared to the third quarter of fiscal year 2006, and a 26% increase over the second quarter of fiscal year 2007. Pro forma diluted earnings per share of $0.15 were at the top of range of the company's per share earnings guidance for the quarter of $0.11 to $0.15. GAAP earnings for the quarter were $1.3 million or $0.06 per diluted share, down from earnings of $1.5 million or $0.08 in the third quarter fiscal year 2006, up from a loss of $0.2 million or $0.01 per diluted share in the second quarter in fiscal year 2007.

Tundra also announced a partnership with Enea, a leading provider of network software and services, to deliver the first RapidIO-based system level software for the wireless communications infrastructure market.

FOX to Offer On-Demand Downloads via Affiliate Websites

Fox Broadcasting Company (FOX) unveiled a plan to offer its television programming to its affiliate Web sites, enabling more than 200 broadcast network affiliates to offer their local viewers the ability to watch or buy FOX's top shows. Fox will share both transactional and advertising revenues with the local affiliates.

Programming will be delivered via "FOX on Demand," the company's leading video distribution platform. To date, "FOX on Demand" has offered an ad-supported, streaming-only platform; now, it will enable visitors to purchase television shows for play on the go on a computer or portable device.

"FOX on Demand's" new commerce functionality is powered by Fox Interactive Media's Direct2Drive digital retail store, which also offers top-selling video games, blockbuster movies, anime, etc.

Since launching in October, "FOX on Demand" has streamed free, full episodes of hit FOX shows such as "24," "Prison Break" and "Bones" on MySpace and on 24 of FOX's owned-and-operated MyFOX local Web sites.

OPNET Awarded Additional NETWARS Contract

OPNET Technologies was awarded a two-year sole-source contract to continue to work as prime contractor on the U.S. Department of Defense's Network Warfare Simulation (NETWARS) program. NETWARS is a software application for analyzing defense-related network communications.

OPNET said it was awarded $2.1 million for the first year of the new contract. Since NETWARS program inception, OPNET funding to date has totaled $22.3 million.

The NETWARS project is part of the DoD's vision for achieving information superiority by optimizing military communications in realistic warfighter scenarios. The objectives for the NETWARS software environment include simulating major theaters of war involving thousands of communications nodes, conducting communications burden analysis, contingency planning analysis, and evaluating emerging technologies in full Joint Task Force warfighting scenarios.

California Approves State-wide Video Franchising

The California Public Utilities Commission unanimously approved rules for the state's new video-franchising process. The new rules, mandated by the California Digital Infrastructure and Cable Competition Act of 2006, streamline the video-franchise process and open the cable TV market to new competitors.

The PUC's decision allows video service providers to seek one video franchise for operating in multiple regions.

Verizon immediately announced its intent to file its first state-issued video franchise application under California's new law.

Siemens Selects Verizon Business for Global MPLS

Siemens has awarded a global networking services contract to Verizon Business. Financial terms were not disclosed.

Under the deal, Verizon will provide Private IP service to support the Siemens corporate network, which carries all of the company's business-critical applications as well as VoIP, SAP and e-mail applications.

Verizon Business is one of only three certified providers supporting Siemens' global network and is currently charged with the deployment of network services to several newly opened Siemens enterprise locations in Europe and the United States.

Verizon Private IP is a high-performance, MPLS-based network that carries all types of traffic on a single VPN.

Arianespace Replaces Sea Launch for Hughes' SPACEWAY 3 Broadband Satellite

Arianespace was selected to launch the SPACEWAY 3 communications satellite for Hughes from the Guiana Space Center in August 2007.

Hughes Network Systems will operate the all Ka-band SPACEWAY 3 satellite as part of its new broadband satellite network that will provide multimedia services throughout North America.

SPACEWAY 3 will combine on-board switching and spot beams to enable on-demand services. The satellite is being built by Boeing Satellites Systems.

http://www.arianespace.comIn December 2005, Hughes Network System (HNS) awarded a launch services contract to Sea Launch for the launch of the SPACEWAY 3 satellite projected for early 2007.

On January 30, 2006 Sea Launch suffered a failed launch of the NSS-8 spacecraft from its Odyssey Platform in the equatorial Pacific. The Odyssey Launch Platform has sustained damage from the event.

Verizon to Repurchase up to 100 Million Shares

Verizon Communications' Board of Directors authorized the repurchase of up to 100 million shares of its common stock. The board also determined that no additional shares may be acquired under a previously approved program to repurchase up to 100 million shares. Under the previous program, which was due to end Feb. 28, 2008, approval remained to purchase approximately 43 million shares.

Approximately 2.9 billion shares of Verizon common stock are outstanding.

Verizon Argues Universal Service Phone Subsidy Too Costly

The Universal Service Phone Subsidy system is broken because it has failed to adapt to the changing marketplace, said Tom Tauke, Verizon executive vice president for public affairs, testifying before the Senate Committee on Commerce, Science and Transportation.

While the price of basic telecommunications service has gone down, the percentage rate of the surcharge on phone bills has gone up, said Tauke. In the last eight years, he explained, the cost of the program that provides subsidies in parts of the country that are expensive to serve has grown from $1.7 billion to $4.1 billion -- a 142 percent increase. He argued that the increase is due, in part, to the fact that there are "three, four, even five wireless carriers receiving universal funding" in many areas.

As wireline carriers lose traditional lines to wireless, the cost-per-line increases, thus driving up the subsidy per customer. Carriers with higher costs are rewarded with higher subsidies, thus depleting funds available for other, lower-cost carriers.

Tauke said Verizon supports reforms of how funds for the high-cost program are collected and dispersed. The former would be based on telephone numbers, so the fund is supported by all voice customers; the latter would include a "reverse auction," or competitive bidding mechanism, through which the carrier with the lowest bid would gain the support.

Verizon filed a "reverse auction" proposal with a joint state-Federal Communications Commission board late last month.

He suggested four steps for determining the payment of universal service support: Initially capping the funding in each area at current levels; adopting a "reverse auction," or competitive bidding, to select the most efficient provider and the best terms; starting the new market-based process in areas where there are at least two wireless carriers in the program; and, after the initial wireless auctions, opening a new FCC proceeding to review the auction process and determine next steps.

Comcast Reaches 2 Millionth Digital Voice Customers

Comcast has surpassed the two million-customer milestone for its Digital Voice home phone service.

Comcast said reaching the two million Digital Voice milestone underscores the record growth it continues to experience as it aggressively rolls out its Triple Play package of services.

Tuesday, February 27, 2007

Hokkaido-Sakhalin Undersea Cable -- Shortest Fiber Route from Tokyo to Europe

Japan's NTT Communications (NTT Com), TransTeleCom (TTC), Russia's leading backbone telecom operator, signed a Memorandum of Understanding (MoU) to build a 500 km high-capacity undersea fiber-optic cable linking the two countries.

The Hokkaido-Sakhalin Cable System (HSCS) will transmit data at up to 640 Gbps between Ishikari, Hokkaido in Japan and Nevelsk, Sakhalin in Russia. The project is slated for completion by the end of 2007.

The undersea fiber cable will link with TTC's transcontinental optical backbone, which follows the route of the Siberian railway. This will enable the shortest uninterrupted fiber link from Tokyo and other parts of Asia to Russia and Europe. The new route will also function as a rerouting network for the existing route that connects Japan and Europe via the Indian Ocean, providing extra backup in the event of a probable disaster like an earthquake.

Ixia Adds Support for HD Video-Over-IP Codecs

Ixia has added support for MPEG-4, H.264, and VC-1 codecs to its IxLoad 3.20 IPTV/Triple Play test solution. Furthermore, IxLoad 3.20 supports MPEG-4 video over both existing MPEG-2 transport streams and native MPEG-4 transport to allow testing of HD content regardless of how it is delivered.

Ixia's IxLoad 3.20 emulates IPTV and Triple Play subscribers and associated protocols to ensure subscriber Quality of Experience (QoE). The system supports more than 90 test methodologies. Test engineers also can use IxLoad 3.20 to introduce basic network impairments such as jitter, latency, packet reordering and packet loss when testing video to help test engineers understand how various network issues can impact the quality of video experienced by subscribers.