Thursday, November 4, 2010

Boingo Signs WiFi Roaming Deal with China Telecom

Boingo Wireless announced a network roaming agreement with China Telecom, enabling its users to access hotspots all across China.

Boingo customers can get online immediately at all China Telecom Wi-Fi hotspots, which include airports, hotels, restaurants and transportation facilities in over 300 major Chinese cities such as Beijing, Shanghai, Guangzhou, Shenzhen, Shenyang, Xiamen, Chengdu, Dalian, Kunming, Qingdao, Chongqing and Xi'an. Popular locations include airports, Howard Johnson and Holiday Inn hotels, KFC, McDonald's and Starbucks cafés.

The partnership with China Telecom brings Boingo's total hotspot count to over 185,000 locations globally.

NETGEAR to Resell Extreme Networks' BlackDiamond 8800 Switches

Extreme Networks announced an OEM relationship enabling NETGEAR to resell its chassis-based network requirements for midsized business and education markets. NETGEAR will add customized Extreme Networks BlackDiamond® 8800 modular switches to its portfolio of smart networking solutions. The relationship is a multi-year agreement through 2013 and shipments are expected to start early in calendar year 2011.

Shane Buckley, SVP and GM of NETGEAR's SMB Business Unit. "NETGEAR's network infrastructure offerings now reach from the network edge to the core, delivering a complete suite for the midsized enterprise."

Pace Acquires Latens -- Combining STBs with Conditional Access

Pace, which supplies set top boxes and advanced residential gateways, has acquired Latens Systems, which offers Conditional Access (CA)/DRM solutions. Latens will continue to operate as an independent unit. Latens headquarters are in the UK Belfast, Northern Ireland, with offices in Hyderabad, India and Atlanta, Georgia.

Pace is based in Saltaire, West Yorkshire, UK and employs over 1,000 people in locations around the world.
  • In October, Pace completed its acquisition of 2Wire, a deal that was valued at $475 million minus cash on hand. 2Wire supplies residential gateways and multi-service IPTV STBs. The company's key customers include AT&T for its U-verse rollout, as well as Bell Canada, Telmex, BT, SingTel, and others.

John Chambers: High Tax on Repatriated Earnings Discourages Investment

U.S. tax policy on corporate profits earned abroad discourages companies such as Cisco from bringing back these resources and investing them in U.S. jobs or R&D spending, writes Cisco CEO John Chambers. He notes that incremental tax rates for U.S. corporations can be as high as 35% on money made overseas and that this high taxation of repatriated foreign earnings is in marked contrast to the tax practices of almost all of the world's major economies —- Japan, Germany, United Kingdom, France, Spain, Italy, Australia, Canada, Russia, and the Netherlands, to name a few. His blog posting is online.

WSJ: Sprint Excludes Huawei and ZTE on Security Concerns

The Wall Street Journal reported that Sprint has decided to exclude Huawei Technologies and ZTE from potentially lucrative supply contracts on national security grounds. The article claims that senior Obama administration officials, including Commerce Secretary Gary Locke and Pentagon officials, recently discussed their national security concerns with Sprint CEO Dan Hesse. None of the companies were quoted directly for the article.
  • In August, a group of eight U.S. senators openly published a letter to Treasury Secretary Timothy Geithner and Director of National Intelligence General James Clapper in they raised their concern about Huawei Technologies as a potential supplier to Sprint Nextel. Specifically, the senators claimed that Huawei maintains close ties with China's military and poses a national security risk to the United States. The senators also cite Huawei's sales activity in Iran, intellectual property concerns, and financial support from the Chinese government.

  • In response, Huawei then circulated a letter to the media in which it static that it is an employee-owned private company with no ownership stake by the Chinese government or the military. Huawei further asserted that it has a good intellectual property record and that it abides by the law in all of the territories in which it operates.

Windstream Builds Data Center Bulk with Acquisition of Hosted Solutions

Windstream will acquire Hosted Solutions Acquisition, LLC (Hosted Solutions) in an all-cash transaction valued at $310 million. The deal will expand Windstream's business offerings, increasing the scale and scope of its data centers by adding five state-of-the-art SAS 70 Type II certified data centers in Raleigh, N.C.; Charlotte, N.C., and Boston with a total of 68,000 square feet of data center capacity. As a result, Windstream will have a combined total of 12 data centers across the country.

Hosted Solutions is a leading regional data center and managed hosting provider focused on enterprise-class Infrastructure as a Service (IaaS) solutions (managed hosting, managed services, colocation, cloud computing and bandwidth) for small and medium-sized business customers as well as large enterprises. The company serves more than 600 customers, has approximately 125 employees, and is based in Raleigh, N.C.

"Data center space is increasingly in demand among our existing business customers," said Jeff Gardner, president and chief executive officer of Windstream. "Hosted Solutions is an excellent complement to our existing enterprise service portfolio. For the past decade, they have been delivering highly complex managed hosting solutions to customers of various sizes. In addition, they have a proven track record of growing revenue and generating significant free cash flow."

Separately, Windstream reported Q3 2010 revenues of $966 million, a 32 percent increase from a year ago. Net income was $85 million, a 7 percent increase from a year ago, or 18 cents of diluted earnings per share.

Some key metrics:

  • Windstream added approximately 15,700 new high-speed Internet customers during the third quarter, bringing its total customer base to approximately 1.29 million - an increase of 8 percent year-over-year. Overall broadband penetration is now 42 percent of total voice lines and 60 percent of primary residential lines.

  • Windstream also added more than 13,000 digital TV customers in the quarter, bringing its total customer base to approximately 433,000, or 22 percent penetration of primary residential lines.

  • Total access lines declined by approximately 30,700, resulting in a year-over-year decline of 3.7 percent. Total lines at the end of the quarter were 3.3 million.

  • In the business channel, advanced data and integrated solutions, which are largely connections providing both voice and data services, increased 1 percent year-over-year. Special access circuits were up 5 percent year-over-year due to increased bandwidth demand from wireless carriers.
  • In June 2010, Windstream completed its acquisition of Iowa Telecommunications Services, Inc. in a transaction valued at approximately $1.2 billion. As of March 31, 2010, Iowa Telecom provided service to approximately 249,000 access lines, 96,000 high-speed Internet customers and 27,500 digital TV customers in Iowa and Minnesota.

DISH Loses 29K Subs in Q3, Ending at 14.3 Million

DISH Network lost approximately 29,000 net subscribers during Q3 2010, ending the quarter with approximately 14.289 million subscribers. The company posted Q3 revenue of $3.21 billion, a 10.9 percent increase compared with $2.89 billion for the corresponding period in 2009. Net income attributable to common shareholders totaled $245 million for the quarter, compared with $81 million during the corresponding period in 2009.

Clearwire Reaches 2.84M Users, Cuts Staff, Updates on LTE 2X Trials

During Q3 2010, Clearwire added 1.23 million total net new subscribers, including 150,000 retail additions and 1.1 million wholesale additions. The company ended the quarter with 2.84 million total subscribers, consisting of 1.01 million retail subscribers and 1.83 million wholesale subscribers. This marks the first time the Company's wholesale subscriber base has eclipsed its retail business. Approximately 45% of the company's wholesale subscribers resided outside of Clearwire's launched markets and were users of multi-mode 3G/4G devices, from whom Clearwire will get nominal revenue.

Clearwire is now forecasting 4 million total users by the end of 2010, by which point the WiMAX footprint is expected to cover up to 120 million people.

Consolidated average revenue per subscriber (ARPU) was $21.19, composed of retail ARPU of $42.74 and wholesale ARPU of $4.46 in the third quarter. While wholesale subscriber growth remained robust, wholesale revenue reflects the impact of nominal pricing for the 45% of wholesale subscribers outside of the company's launched markets with no or little usage of the Company's network. Wholesale revenue in the third quarter was $16.5 million and is based upon minimal wholesale ARPU and usage assumptions due to unresolved issues around wholesale pricing.

Clearwire said it remain optimistic about resolving its funding needs but that the issue has not yet been resolved. The company is in discussions with a number of its major shareholders and other third parties about a number of options, including potential strategic transactions, additional debt or equity financings and/or asset sales. To conserve cash, Clearwire is significantly reducing sales and marketing spending, suspending additional retail channel market launches of the CLEAR-branded operations in select markets including Denver and Miami, delaying the introduction of CLEAR-branded smartphones, trimming its workforce by 15% and significantly cutting the number of contractors. Clearwire will also suspend zoning and permitting at many sites beyond its current build plan.

In addition, Clearwire provided an update on its LTE 2X technology trials. In August, Clearwire announced it would test coexistence scenarios for WiMAX and LTE in Phoenix using both Frequency Division Duplex (FDD) configurations using 40 MHz of spectrum paired in 2 x 20 MHz contiguous channels ("LTE 2X"), and Time Division Duplex (TDD) configurations using 20 MHz of spectrum. Initial tests have recently confirmed that the company's LTE 2X trial network achieved peak download speeds on commercially available equipment and devices in excess of 90 Mbps and upload speeds of more than 30 Mbps. Clearwire expects to conclude the tests in Q1 2011.

Japan's SoftBank Mobile Earns More from Data Than Voice

Japan's Softbank Mobile now earns more from data than from voice services.

Softbank Mobile is upgrading its HSPA radio access network with Ericsson's RBS 6000 radio base station.

Junichi Miyakawa, Executive Vice President and CTO of Softbank Mobile, says: "We are the first operator in the world to have higher revenues from data than from voice. Ericsson's solution for this coverage and capacity upgrade will satisfy our data-hungry subscribers. We want to ensure that our network performance remains among the world's best so we can make the most of both the data and subscriber growth we are enjoying."

Under the contract, Ericsson is deploying and integrating new radio base stations for the Tomeihan area which includes Japan's biggest cities: Tokyo, Nagoya and Osaka. This area covers 50 percent of the Japanese population and represents one of the densest areas in the world in terms of data traffic usage.

The upgrade project has already begun, and is due to be largely completed by the end of the financial year 2010, which ends on March 31, 2011.

Wednesday, November 3, 2010

Cbeyond Acquires Cloud Services Companies

Cbeyond, which provides IP-based services to small businesses across the U.S., announced the acquisitions of two companies that provide cloud services: privately held MaximumASP and privately held Aretta Communications.

MaximumASP provides cloud services such as managed virtual servers and dedicated servers, and Aretta Communications provides cloud services such as cloud PBXs (private branch exchange) and SIP (Session Internet Protocol) trunking. Both companies target small- and medium-sized businesses throughout the U.S.

The combined transaction value is approximately $40 million, payable in cash, of which approximately $33 million was paid at closing and the balance, up to 17.5 percent of the combined purchase price, will be paid upon achieving certain future milestones. The aggregate fiscal 2010 revenue of the two acquired companies is expected to be approximately $12 million.

"The acquisition of MaximumASP and Aretta Communications is an important step forward for Cbeyond's business," said Jim Geiger, chief executive officer of Cbeyond. "We believe these acquisitions will provide significant growth opportunities, leverage our existing channels of distribution, and expand our innovative technology and expertise."

MetroPCS: The Future of Wireless is No Contracts

The pay-in-advance, no-contract model is the future of wireless, said Tom Keys, Chief Operating Officer for MetroPCS.
In the company's quarterly financial conference call, Keys said MetroPCS continues to attract users looking for alternatives to long-term commitments. An internal survey by the company found that approximately 1/3 of our new gross additions were previously contracted wireless subscribers. As the first U.S. carrier to launch LTE services, MetroPCS opted to continue offering monthly service plans with no annual contract required.

Keys said the initial LTE networks are performing well and that early subscribers are responding positively. In Q4, the company plans to launch multiple Android devices. Additionally, in early 2011, MetroPCS expects to introduce its first 4G LTE Android smartphone.

MetroPCS, which operates a CDMA network, bypassed 3G EVDO in favor of 4G LTE. The company is looking ahead to migrate its voice traffic to the new network using VOLTE (voice-over-LTE) and anticipates launching a trial of this technology during the first half of 2011. Converging voice and data over the same LTE network should be more efficient over time.

Deutsche Telekom Confirms Guidance

Deutsche Telekom confirmed its guidance for the full year following a solid third quarter. Excluding the effects of the joint venture in the United Kingdom, Deutsche Telekom expects to generate adjusted EBITDA of approximately EUR 20 billion and free cash flow of at least EUR 6.2 billion. By the end of the first nine months, adjusted EBITDA amounted to EUR 14.9 billion, while free cash flow stood at EUR 4.8 billion.

"We are delivering what we promised. We have made our mark and posted good results in an environment that was not always favorable. In terms of both finance and operations, the Group's development has completely fulfilled our expectations," said René Obermann, CEO of Deutsche Telekom.

Some highlights for the quarter:

In the domestic mobile communications business, Deutsche Telekom said smartphones accounted for 53 percent of all handsets sold. The fixed-network broadband market share has remained stable at over 46 percent since 2007. A total of 1.4 million Entertain packages had been sold at September 30, 2010. The number of lines lost in the third quarter of 2010 was slightly lower than in the prior-year quarter.

Total revenue from domestic mobile communications business increased by 2.3 percent in the third quarter of 2010 to EUR 2.2 billion. This includes a one-time effect from the expiration of the national roaming agreement with O2 at the end of 2009.

The number of mobile communications customers decreased by 4.2 million compared with year-end 2009 to 34.9 million in the first three quarters of 2010. This was mainly attributable to the deregistration of inactive prepay customer cards, which had no effect on revenue. The number of contract customers was slightly higher year-on-year at 17.2 million.

In the U.S., T-Mobile USA's customer base grew by 137,000 in the past quarter to 33.8 million customers. After witnessing a decline in the total customer base both in the prior quarter and in the same period of the previous year, Deutsche Telekom's U.S. mobile communications subsidiary thus reported growth again between July and September 2010. While the number of contract customers fell by 60,000 during these three months, 196,000 new prepay customers were acquired in the same period. As a result of seasonal fluctuations and increased competition, contract customer churn rose slightly compared with the previous quarter to the level recorded in the prior-year period.

In other European markets, in spite of intense competition and a negative impact from regulatory decisions in a number of countries, the DT companies continued to record high levels of profitability. The adjusted EBITDA margin in the Europe segment in the third quarter of 2010 remained virtually stable at 35.5 percent compared with 36.0 percent in the prior-year period. Seen over the first nine months of the year, it increased by 1.8 percentage points, from 32.9 percent to 34.7 percent.

AT&T Looks to Mobilize U.S. Healthcare

AT&T is rolling out new wireless, networked, and cloud-based solutions for the healthcare industry.
AT&T, which generated approximately $4 billion in revenue from healthcare industry businesses such as hospitals, insurers, pharmaceutical companies, suppliers and physicians in 2009, sees new opportunities for mobilizing home healthcare. Examples that use AT&T's technology include:

  • Medicine bottles that remind patients to take pills on schedule;

  • Devices that monitor patients' heart levels from the comfort of their homes;

  • Audio/video links that can replace the need for an in-person visit to the doctor.

  • "Smart slippers" that wirelessly monitor a patient's gait to identify pressure signatures. Capturing changes in acceleration and pressure measurements, the sensors could alert caregivers to respond quickly to falls, or possibly help prevent them.

AT&T's mHealth Services will be focused on helping healthcare institutions and patients manage disease, take the appropriate medicine, receive home care, manage weight loss, and monitor wellness programs. AT&T is also introducing a set of cloud-based, medical image archive applications and security services which will permit healthcare providers to share clinical data in a highly-secure manner, scaled to handle the huge bandwidth demands driven by live video, images and medical records. Solutions planned to be delivered by AT&T on-demand and "as-a-service" include managed hosting, storage, security and consulting services.

Alcatel-Lucent Sees Performance Driven by IP and Wireless

Alcatel-Lucent reported Q3 2010 revenue of Euro 4.074 billion, up 10.5% year-over-year, up 6.8% sequentially. Net income was Euro 25 million or Euro 0.01 per diluted share (USD 0.02 per ADS).

The company said its financial performance was driven by an acceleration of growth in IP and wireless, partly offset by a decline in wireline networks. Terrestrial optics revenues were almost stable this quarter. Applications revenues were stable both for Networks applications and Enterprise applications. Services revenues grew at a low single digit rate with good performance this quarter for Managed & Outsourcing solutions.

From a geographic standpoint, traction remained strong in North America with a double digit rate of growth and sales trends improved in all other regions of the world, especially with Asia Pacific and Eastern Europe growing at mid single digit rates. Specifically, growth in India and Russia was significant, and resumed in China this quarter.

Alcatel-Lucent said its supply chain is still experiencing capacity constraints as the demand for telecommunications equipment and related services is recovering due to booming data traffic.

"I am pleased with the good progress made in our transformation journey, highlighted with healthy sales and improved profitability this quarter. Our solutions are recording strong traction with our customers as evidenced by a book to bill ratio up from the year ago period, and a growing share of our next generation product sales. From a geographic standpoint, on top of the established strong dynamic in North America, we experienced good growth in India, China and Russia fuelled by our recent contracts wins and better market conditions. We improved our overall profitability sequentially and year over year even though our product and geographic mix was less favourable than in the second quarter of 2010," commented Ben Verwaayen, Alcatel-Lucent CEO.

Alcatel-Lucent Announces EUR 1.2B in Contracts in China

Alcatel-Lucent announced three framework agreements valued in total at EUR 1.178 billion with China Mobile, China Telecom and China Unicom. The contracts are to be signed on November 5th in Paris, during the visit of Hu Jintao, President of the People's Republic of China, and witnessed by the key government officials of the two countries.

China Mobile -- this EUR 530 million agreement covers GSM and TD-SCDMA wireless networking solutions, transmission equipment, IP routers, and IP Multimedia Subsystem (IMS) platforms and professional services.

China Telecom -- this EUR 343 million agreement covers CDMA wireless networking solutions, high-capacity fiber-based (xPON) and DSL access platforms, IP routers, transmission equipment, and applications.

China Unicom -- this EUR 305 million agreement covers WCDMA and GSM wireless networking solutions, high-capacity fiber-based (xPON) access platforms, IP routers, transmission equipment, managed services, femtocell solutions, solutions for the convergence of telecom, internet and TV broadcasting networks and 3G applications.

"China is a booming market and we value our role in helping bring the power of IP and broadband to the hands of its people wherever they are -- on the road, at the home and in the office," said Ben Verwaayen, chief executive officer of Alcatel-Lucent.

Cablevision Loses Video Subscribers in Q3, Adds Internet, Voice, Business Ethernet

Cablevision's Q3 2010 cable television net revenues increased 4.8% to $1.366 billion, AOCF rose
2.3% to $563.3 million and operating income increased 6.3% to $372.4 million, each compared to
the prior year period. Some key metrics:

  • Basic video customers down 24,500 or 0.8% from June 2010 and down 23,500 or 0.8% from September 2009.

  • iO: Interactive Optimum digital video customers down 4,200 or 0.1% from June 2010 and up 33,700 or 1.2% from September 2009.

  • Optimum Online high-speed data customers up 9,600 or 0.4% from June 2010 and 125,000 or 5.0% from September 2009.

  • Optimum Voice customers up 9,300 or 0.4% from June 2010 and 128,000 or 6.4% from September 2009.

  • Revenue Generating Units down 9,800 or 0.1% from June 2010 and up 263,200 or 2.5% from September 2009

  • Cable Television RPS of $149.04, down $0.08 or 0.1% from the second quarter of 2010 and up $8.01 or 5.7% from the third quarter of 2009.

  • Optimum Lightpath net revenues increased 12.1% to $72.9 million, AOCF increased 18.6% to $28.5 million and operating income increased 38.0% to $5.7 million, each as compared to the prior year period. The improved results were driven primarily by a 33.1% increase in revenue from Ethernet services.

Huawei Debuts SingleRAN for WiMAX to LTE TDD Migration

Huawei announced commercial availability of an integrated WiMAX and LTE TDD SingleRAN solution that enables operators to seamlessly migrate from WiMAX to LTE TDD networks.

Huawei's solution consists of a WiMAX and LTE TDD dual mode remote radio unit (RRU) and dual mode base band unit (BBU). Both support 2.3GHz, 2.5GHz and 3.5GHz mainstream Time-Division Duplexing (TDD) frequency bands. The solution also features Huawei's SingleEPC packet core network solution, which supports GPRS, UMTS, LTE, and WiMAX users alike.

Huawei noted that its WiMAX RRU has been widely applied in several operators' current operating WiMAX networks. It is a 4T4R (four transmitters and four receivers) design that supports multi-input multi-output (MIMO) and Beamforming (BF), and it can be flexibly configured as a WiMAX module, a LTE TDD module, or a WiMAX and LTE TDD dual mode module simply by upgrading the software.

Huawei supported China Mobile to deploy the world's first pre-commercial network using its LTE TDD solution. This network successfully demonstrated a variety of mobile broadband services, including high definition (HD) transmission, HD video conference, HD video monitoring, HD video-on-demand (VOD) and HD live broadcasting to visitors in the 2010 Shanghai World Expo Park and some key pavilions.

MetroPCS Launches LTE in Los Angeles, Philadelphia

MetroPCS Communications launched commercial LTE service in its fourth and fifth markets -- Los Angeles and Philadelphia. The company previously launched LTE in Detroit, the Dallas/Fort Worth Metroplex (DFW) and Las Vegas.

"As the only no annual contract, pay-in-advance service provider offering 4G LTE services, we are building on the successful commercial launches of 4G LTE service in Las Vegas, Dallas/Fort Worth and Detroit with the launches of our 4G LTE service in Los Angeles and Philadelphia. With a compelling handset line-up and a superior network, we deliver unmatched value with the flexibility, predictability and affordability that consumers demand," said Roger D. Linquist, chairman, president and CEO of MetroPCS.

MetroPCS intends to expand its 4G services into additional major metropolitan areas later this year and into early 2011, including Atlanta, Boston, Jacksonville, Miami, New York, Orlando, Sacramento, San Francisco and Tampa.

In addition, MetroPCS began offering a nationwide plan covering 90% of U.S. markets. Customers can get unlimited talk, text and Web services wherever they go in the nation on their existing MetroPCS service plan.

Bell Canada Adds Wireless, TV and Internet Users in Q3

Bell Canada reported revenue growth of 1.8%, reflecting strong TV and wireless revenue growth of 9.3% and 8.1%, respectively; operating income growth of 15.6%; EBITDA growth of 3.1%; wireless gross subscriber activations of 537,295 and postpaid net additions of 159,465; TV net additions of 18,538 and high-speed Internet additions of 21,668. . At the end of the quarter, Bell had 2,085,227 high-speed Internet subscribers, 1,997,079 TV subscribers, and 7,125,266 wireless subscribers.

"Bell's strategic agenda has moved forward substantially, with record Q3 wireless performance, including accelerating smartphone penetration, data growth of 39% and solid ARPU growth; the launch of our next generation Bell Fibe TV service; the announcement of our acquisition of Canada's #1 media company, CTV; a wide-ranging NFL content deal for Bell Mobile TV; and enhanced ICT leadership at Bell Business Markets with the acquisitions of xwave and Hypertec announced in October," said George Cope, President and CEO of BCE. "Bell is leveraging its significant investments in world-leading wireless and fibre infrastructure to deliver Canadian consumers and business clients the best broadband services and content now and position the company for future growth."

Aviat Posts Revenue of $109M, Restructuring Continues

Aviat Networks reported quarterly revenue of $109.1 million, compared with $120.0 million in the year ago period. Net loss was $21.3 million, or $0.36 per share, compared with a net loss of $7.8 million, or $0.13 per share, in the year ago quarter.

Revenue in the North America segment was $35.6 million in the first quarter of fiscal 2011, compared with $48.0 million in the year ago period. International revenue was $73.5 million, compared with $72.0 million in the year ago period.

"While the accelerated pace of our restructuring and other changes caused temporary issues with collections and gross margins, we are encouraged. Because of strong orders during the first quarter of FY11, we are cautiously optimistic about top-line growth next quarter. The speed at which we are implementing changes gives us confidence we can complete our previously announced restructuring by the end of the third quarter of FY11," said Chuck Kissner, chairman and CEO, Aviat Networks.