Monday, July 23, 2012

EchoStar XVII Satellite on Target

Hughes Network Systems confirmed that its newly launched EchoStar XVII satellite was successfully placed into its permanent geosynchronous orbital slot of 107.1 degrees West longitude last week. Testing is underway and Hughes expects to begin commercial operations this fall.

"The launch and positioning of EchoStar XVII is a significant milestone for Hughes, as it will be the cornerstone for our HughesNet Gen4 satellite Internet service," said Paul Gaske, Hughes executive vice president and general manager, North America Division. "With well over 100 Gbps capacity, EchoStar XVII will build on the success of our SPACEWAY 3 satellite--the world's largest commercial satellite network, expanding high-speed satellite Internet access in North America to over 1.5 million new consumer and small business subscribers."

The new generation Ka-band satellite was built by Space Systems/Loral and launched by Arianespace.

Ciena Supplies Metro Net for Israel Credit Cards

Cal (Israel Credit Cards Ltd) has selected Ciena and its partner Telrad to build a high-capacity, low-latency private optical network connecting its new data centre in Yehud to its main facilities in Giv’atayim. The metro network uses Ciena’s 4200 Advanced Services Platform to support two 10G Ethernet and four 4G Fibre Channel connections between the data centres. Cal has leased two dark fibre links between its sites to be used as active-active links, for which Ciena’s technology provides a very low latency solution.

Sunday, July 22, 2012

Palo Alto Networks Rises 26.5% in IPO

On the first day of trading, shares in Palo Alto Networks (NYSE: PANW) rose 26.5% to close at $53.13.

This gives the company a market cap of $1.09 billion.

President and CEO Mark D. McLaughlin, joined by members of Palo Alto Networks’ leadership team, celebrated the company’s first day of trading by visiting the NYSE trading floor for the stock opening and ringing The Opening Bell.

President’s Council Recommends Opening 1,000 MHz for Shared Use

U.S. federal policy should shift in favor "Shared-Use Spectrum Superhighways" instead the current plan which is to first clear federal users from specific bands and then auction this spectrum for the exclusive use of the highest bidder, according to a new report issued by the President’s Council of Advisors on Science and Technology (PCAST). The report identifies 1,000 MHz of federal spectrum for sharing with the private sector.

The New Spectrum Superhighway plan (1) divides spectrum into substantial blocks with common characteristics (2) makes sharing by Federal users with commercial users the norm (3) measures spectrum effectiveness using a new metric (4) increases capacity by "1,000’s of times." 

A Presidential memorandum issued in June 2010 requires that 500 MHz of spectrum to be made available for commercial use within 10 years.  However, a recent NTIA Study found that clearing just one 95 MHz band will take 10 years, cost $18 billion, and cause significant disruption. Moreover, the net revenue for the Treasury from the last successful auction of 45 MHz realized a net income of just a few hundred million a year ($5.3 billion total).

The PCAST report said its vision of shared spectrum is viable using existing technologies and is not dependent on cognitive or "smart" radios. Instead, a geo-location database could be used the share spectrum much like how the FCC is using managing TV bands. The TV Whitespaces system could be used as a model. Technical standards would need to be implemented for coexistence of transmitters and receivers to enable flexible sharing.

To get things rolling, the PCAST report recommends that an incentive mechanism be created to encourage Federal agencies to begin sharing (e.g., Spectrum Currency). The existing Spectrum Relocation Fund, which is supposed to fund the migration of federal users out of certain bands, could be redeveloped into a "Spectrum Efficiency Fund." The system could be tested in a specific city before being extended nationwide.

Specifically, PCAST recommends beginning a pilot program involving spectrum sharing, supported by early release of funds from various sources, with three key elements: immediate sharing by new low-power devices in two existing Federal spectrum bands; formation of a Spectrum Sharing Partnership Steering Committee (SSP) of industry executives (e.g. CEOs) to advise on a policy framework to maximize commercial success; and creation of an urban Test City and a Mobile Test Service that can support rapid learning in spectrum management technology and practice.

The 192 page report is posted online.

Reaction from AT&T: "While we are still reviewing the PCAST report, we are encouraged by the sustained interest in exploring ways to free up underutilized government spectrum for mobile Internet use. However, we are concerned with the report’s primary conclusion that 'the norm for spectrum use should be sharing, not exclusivity.' The report fails to recognize the benefits of exclusive use licenses, which are well known. Those licenses enabled the creation of the mobile Internet and all of the ensuing innovation, investment and job creation that followed.

“While we should be considering all options to meet the country’s spectrum goals, including the sharing of federal spectrum with government users, it is imperative that we clear and reallocate government spectrum where practical. We fully support the NTIA effort of determining which government bands can be cleared for commercial use, and we look forward to continuing to work with NTIA and other stakeholders to make more spectrum available for American consumers and businesses."

Reaction from CTIA: "Cleared spectrum and an exclusive-use approach has enabled the U.S. wireless industry to invest hundreds of billions of dollars, deploying world-leading mobile broadband networks and resulting in tremendous economic benefits for U.S. consumers and businesses. Not surprisingly, that is the very same approach that has been used by the countries that we compete with in the global marketplace, who have brought hundreds of megahertz of cleared spectrum to market in recent years."

Brazil Suspends New Mobile Line Sales Due to Poor Service

Brazil's National Telecommunications Agency (Anatel) has prohibited the nation's mobile operators with the worst customer service from selling new lines. The ban impacts the following carriers: TIM, Hi, and Clear in certain regions where their performance is the worst. The ban against TIM is the widest due to a spike in problems

Failure to comply with this order will result in a penaly of R$200,000 per day in each state in which the noncompliance is found.

In addition, the agency has ordered the operators to submit a National Action Plan with the next 30 days to explain who they will address the problem.

CWA Negotiator Dies in Tragic Drowning

The Communications Workers of America is mourning the loss of Seth Rosen, vice president of Communications Workers of America District 4, who drowned in a tragic accident in North Carolina on Friday, July 20, 2012. He was 55.

Last week, Mr, Rosen was working to finalize a tentative agreement for CWA members at AT&T Midwest. He was elected CWA vice president in 2005, and was a leader in organizing, bargaining and many areas of the union.

AT&T and Unions Reach Tentative Deals in Two Regions

The Communications Workers of America District 4 and CWA’s Telecommunications and Technologies Sector announced tentative deals with AT&T Midwest and AT&T Legacy. The tentative settlement provides for wage increases, improvements in employment security and improvements in work and job issues limits on forced overtime and changes to unfair attendance policies.

District 4 covers about 15,000 CWA members at AT&T operations in Ohio, Indiana, Illinois, Michigan and Wisconsin. AT&T Legacy covers about 5,500 workers at locations nationwide.

Separate negotiations are continuing with AT&T West, which has 18,000 CWA members throughout California and Nevada, and with AT&T East, which has 4,000 CWA members in Connecticut.  CWA said its 24,000 District 3 members throughout the Southeast are keeping up their mobilization efforts as the clock ticks down to the Aug. 4 contract expiration.

China Telecom Adds 17.7 Million Mobile Subscribers in 1st Half

China Telecom added 17.71 million mobile subscriptions in the first half of 2012, 0f which 14.6 million were 3G accounts, giving it a total of 144 million subscribers.

China Telecom remains on a steady pace of adding over one million broadband lines per month.

Local access lines continue to drop due to mobile substitution, broadband substitution, as well as competition.

In June, ZTE announced a contract for 40% of China Telecom’s 2012 broadband equipment procurement project -- the largest share of any vendor participating on the project. The contract covers procurement of PON OLTs, FTTB MDUs, and broadband terminals. It includes for over 21 million units valued at approximately RMB4 billion (approximately US$629 million).

ZTE said this is the largest broadband procurement project in the world in 2012.

VMware Hits Revenue of $1.12 Billion, up 22% YoY

VMware reported Q2 revenue of $1.12 billion, an increase of 22% from the second quarter of 2011, and 23% measured in constant currency. Net income for the second quarter was $192 million, or $0.44 per diluted share, compared to $220 million, or $0.51 per diluted share, for the second quarter of 2011. Non-GAAP net income for the quarter was $296 million, or $0.68 per diluted share, compared to $235 million, or $0.55 per diluted share, for the second quarter of 2011.

License revenues for the second quarter of 2012 were $517 million, an increase of 11% from 2011. Service revenues, which include software maintenance and professional services, were $606 million for 2012, an increase of 33% from 2011.

"The quarter’s strong performance reflects the continued confidence customers have in our solutions," said Paul Maritz, chief executive officer, VMware. "Our products, amplified by the recent acquisitions, including Nicira, are providing the means for our customers to transform IT as we move into the Cloud Era."

Riverbed Enhances WAN Optimization with Inbound QoS

Riverbed introduced an inbound QoS capability to its Steelhead WAN optimization appliances.

The inbound QoS is increasingly needed to ensure the performance of public cloud services, such as SaaS, that may compete with recreational traffic such as Facebook and YouTube.

Riverbed said its Steelhead already offers advanced traffic classification and outbound QoS capabilities, so its appliance is the right place to ensure inbound QoS as well.

Riverbed developed advanced QoS capabilities that use a combination of proprietary classification methods, simplified configuration and unique scheduling techniques to efficiently allocate minimum and maximum bandwidths and prioritize latency-sensitive applications for both incoming and outgoing traffic.

IEEE Forms 802.3 BASE-T Study Group

IEEE has established a new 802.3 Next-Generation BASE-T Study Group to measure industry interest and needs in the next generation of Ethernet transmission over twisted-pair cabling.

Current IEEE 802.3 BASE-T typically runs at Gigabit Ethernet and 10 Gigabit Ethernet speeds and is used in data centers.

"Because of the ability of current IEEE 802.3 BASE-T technologies to interoperate with legacy versions via the standard’s autonegotiation’ feature and thereby support cost-effective infrastructure upgrades, extension to 40 Gigabit Ethernet and higher speeds will be required in coming years,” said Bill Woodruff, chair of the IEEE 802.3 Next-Generation BASE-T Study Group and associate product line director with Broadcom. “IEEE 802.3 BASE-T continues to be one of the most successful technologies within the greater IEEE 802.3 family, and our new study group will gauge the timing and needs of extending the standard to support industry needs for server connectivity and other applications."

Thursday, July 19, 2012

Verizon Tops 11 Million LTE Subs, 12% of its Postpaid Base

Verizon reported strong Q2 performance, including the addition of over 2.5 million LTE subscriptions and significant increases in operating cash flow. Verizon Wireless generated record-high margins and strong operational results, and Verizon's Wireline segment generated continued increases in revenues from FiOS fiber-optic services and strategic business services. 

Verizon's total operating revenues were $28.6 billion on a consolidated basis, an increase of 3.7 percent compared with second-quarter 2011. Consolidated operating income was $5.7 billion in second-quarter 2012, compared with $4.9 billion in second-quarter 2011. Consolidated EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled $9.8 billion in second-quarter 2012, compared with $9.0 billion in second-quarter 2011.

"Verizon delivered another strong quarter of earnings growth and cash generation, and we remain on track to meet our financial objectives and produce solid double-digit earnings growth for the year," said Lowell McAdam, Verizon chairman and CEO.

In its conference call, Verizon said it is "very pleased" with the pace of LTE consumer adoption. Verizon now has nearly 11 million LTE subscribers, representing 12% of its 89 million retail postpaid connections. About 70% are smartphones and 30% are Internet devices. This means 19% of the company's smartphone base has an LTE handset. During the quarter, Verizon Wireless sold 2.9 million DROID smartphones, 2.5 million of which were #LTE, and 2.7 million Apple iPhones, up from 2.3 million a year ago. Of LTE sales, 20% were new to Verizon and 80% were upgrades. 

Some Wireless Highlights

  • Service revenues in the quarter totaled $15.8 billion, up 7.3 percent year over year. Retail service revenues grew 8.6 percent year over year, to $15.2 billion.
  • Data revenues were $6.9 billion, up $1.1 billion - or 18.5 percent - year over year, and represent 43.6 percent of all service revenues. Total revenues were $18.6 billion, up 7.4 percent year over year.
  • Retail postpaid ARPU grew 3.7 percent over second-quarter 2011, to a record $56.13, the highest growth in three years. Retail postpaid data ARPU increased to $24.53, up 15.4 percent year over year. Retail service ARPU grew 3.4 percent year over year, to a record $54.29.
  • Added 1.2 million retail net customers in the second quarter, including 888,000 retail postpaid net customers. 
  • At the end of Q2, the company had 94.2 million retail customers, a 4.9 percent increase year over year, including 88.8 million retail postpaid customers.
  • Smartphones constituted 50 percent of Verizon Wireless' retail postpaid customer phone base, up from 47 percent at the end of first-quarter 2012.
  • Retail postpaid churn was 0.84 percent, the lowest in four years, and an improvement of 5 basis points year over year. Total retail churn was 1.11 percent, an improvement of 11 basis points year over year.

Some Wireline Highlights

  • Wireline operating revenues were $9.9 billion, a decline of 3.1 percent compared with second-quarter 2011. Wireline operating income margin was 1.9 percent, compared with 1.6 percent in first-quarter 2012 and 3.1 percent in second-quarter 2011. Segment EBITDA margin (non-GAAP) was 23.1 percent in second-quarter 2012, compared with 22.6 percent in first-quarter 2012 and 23.8 percent in second-quarter 2011.
  • Consumer revenues grew 2.5 percent compared with second-quarter 2011, the highest increase in several years. Consumer ARPU for wireline services reached more than $100 for the first time, increasing to $100.26 in second-quarter 2012, up 8.5 percent compared with second-quarter 2011.
  • ARPU for FiOS customers increased to more than $149 in second-quarter 2012. FiOS services produced 65 percent of consumer wireline revenues in second-quarter 2012. Approximately 70 percent of FiOS consumer customers have purchased a "triple play" of phone, Internet and TV services.
  • Global enterprise revenues totaled $3.8 billion in the quarter, down 3.4 percent compared with second-quarter 2011. Sales of strategic services increased 4.4 percent compared with second-quarter 2011 and represented 52 percent of global enterprise revenues in second-quarter 2012. Strategic services include Terremark cloud services, security and IT solutions, and strategic networking.
  • Verizon added 134,000 net new FiOS Internet connections and 120,000 net new FiOS Video connections in second-quarter 2012. Verizon had a total of 5.1 million FiOS Internet and 4.5 million FiOS Video connections at the end of the quarter.
  • FiOS Internet penetration was 36.6 percent at the end of second-quarter 2012, compared with 33.9 percent at the end of second-quarter 2011. In the same periods, FiOS Video penetration was 32.6 percent, compared with 29.9 percent. The FiOS network now passes more than 17 million premises.
  • Broadband connections totaled 8.8 million at the end of second-quarter 2012, a 2.6 percent year-over-year increase.
  • Verizon launched several network projects during the second quarter, including deployment of next-generation routing equipment on the global Private IP network to meet growth demands, improve scalability and support 10 gigabit customer access ports and 40G and 100G backbone trunk ports; and a long-term core network architecture project for a common multi-protocol label switching (MPLS) backbone platform that will support current and future service demands.
  • The company also launched its first major initiative to build additional control plane technology into its network infrastructure. This will allow Verizon to deliver on the promise of cloud-based and mobility-enabled industry solutions, as well as enable rapid and automated recovery of complex optical mesh networks. 19-Jul-12

China Mobile Hong Kong Picks Ericsson for TD-LTE

China Mobile Hong Kong has selected Ericsson to expand their commercial LTE network with TD-LTE in Hong Kong. Ericsson is already the sole supplier for China Mobile Hong Kong's LTE FDD network. Ericsson will also upgrade the operator's existing Evolved Packet Core (EPC) network. Financial terms were not disclosed.

China Mobile Hong Kong's FDD LTE mobile data service launched in April. The carrier now plans to launch a TD-LTE network to complementing its existing LTE FDD network. The converged LTE FDD/TDD network will be launched as early as the fourth quarter, when devices that support both modes become available in larger volumes.

Under the agreement, Ericsson will deliver the TD-LTE radio access network, network management using Ericsson OSS-RC, Evolved Packet Core network expansion and upgrade, consulting and systems integration services as well related design, training and support services.

Ericsson noted that it has now signed 67 LTE/EPC contracts in 30 countries on five continents. 

FCC's Measuring Broadband Performance Sees Improvements

There have been measurable improvements by ISPs in meeting their advertised speeds, according to a new Report on Consumer Wireline Broadband Performance in the U.S. that was issued by the FCC.
<> ISPs generally achieved these gains by improvements in network performance, and not downward adjustments to the speed tiers offered. There was also a significant increase in the actual average speed delivered by participating ISPs to their customers over the past year.

The data for the report was generated by a software app deployed in the homes of thousands of volunteer consumers who conducted automated, direct measurements of broadband performance. The connections were DSL, cable and fiber.

The report finds that differences among ISPs in their ability to deliver advertised speeds are now narrowing.

In addition, the report notes a steady migration of consumers to higher speed services, and an encouraging upgrade cycle by ISPs to boost the performance of their service tiers and introduce even faster offerings. 19-Jul-12

Nokia Sales Fall 5% Sequentially, 26% YoY

Nokia posted dismal Q2 results, as sales of devices and services fell 5 percent sequentially and 26 percent year over year. Gross margin in Q2 was 18.1 percent, down 630 basis points sequentially primarily due to the recognition of approximately 220 million EURO of inventory related allowances in Smart Devices. Overall net sales for the company totaled 7,542 million Euros and there was a net loss of 826 million Euros. Sales of devices in all geographic regions, except North America where revenue was up from a small base. 

“Nokia is taking action to manage through this transition period. While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources. We shipped four million Lumia Smartphones in Q2, and we plan to provide updates to current Lumia products overtime, well beyond the launch of Windows Phone 8. We believe the Windows Phone 8 launch will be an important catalyst for Lumia," stated Stephen Elop, Nokia CEO.

Some highlights:

  • 4 million Lumia smartphone sales.
  • Nokia ended Q2 with gross cash of EUR 9.4 billion and net cash of EUR 4.2 billion.
  • In Q2,Nokia received a quarterly platform support payment of USD 250 million (approximately EUR 196 million)
  • For Nokia's Location business, net sales were 283 million Euro, up 2 percent sequentially and 4 percent year over year. 

NSN Sees Improvements in Q2

Nokia Siemens Networks returned to non-IFRS operating profitability in Q2 as the company saw financial improvement resulting from its restructuring program.

In Q2 2012, net sales of Nokia Siemens Networks decreased 8% to EUR 3,343 million. Gross profit in Nokia Siemens Networks was EUR 833 million (gross profit EUR 967 million), representing a gross margin of 24.9% (26.6%).

The company said the decline in net sales in the second quarter 2012 was primarily due to its strategy to focus on mobile broadband, customer experience management and services. Business areas not consistent with the new strategy are in the process of being divested or managed for value.

The number of employees has been reduced by about 10,000 compared to the end of 2011. 

Zayo Builds in Denver

Zayo is undertaking a 521-mile fiber build in the greater Denver area. The fiber build will span the Front Range, encompassing the cities of Fort Collins, Greeley, Loveland, Longmont, Boulder, Colorado Springs, and the larger Denver metro area. Zayo said the investment will bolster its presence in the central business districts of Denver and Colorado Springs.

Adding this network expansion to the existing Zayo and AboveNet assets, Zayo will have 900 route miles of fiber network in the greater Denver area. 

Palo Alto Networks Prices its IPO at $42

Palo Alto Networks announced the initial public offering of 6,200,000 shares of its common stock at a price to the public of $42.00 per share.

Goldman, Sachs & Co., and Citigroup Global Markets, Inc. are acting as lead joint book-running managers for the offering, and Credit Suisse, Barclays, UBS Securities LLC, and Raymond James & Associates, Inc. are acting as book-running managers for the offering.

The company's will trade on NYSE: PANW. 

ADVA Reports Q2 Profitability Above Guidance

ADVA Optical Networking reported Q2 revenues at a record high of EUR 85.9 million, up 10.3% vs. EUR 77.8 million in Q2 2011 and up 5.2% vs. EUR 81.7 million achieved in Q1 2012. This result is at the upper end of guidance of between EUR 81 million and EUR 86 million.

The company posted IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, of EUR 6.8 million or 8.0% of revenues in Q2 2012, above guidance of between 3% and 7% of revenues.

"We are very pleased with our Q2 2012 revenues of EUR 85.9 million, which are at the upper end of guidance and are up 5.2% vs. our previous quarter and 10.3% vs. Q2 2011. The quarter-on-quarter increase is driven largely by investments in carrier infrastructure and enterprise solutions, reflecting the continued network traffic growth due to video applications and the increasing adoption of cloud computing services, coupled with rising demand for innovative enterprise network technology in a broad range of verticals. Year-on-year, the pick-up is mostly related to higher demand for Ethernet transport solutions for mobile backhaul and enterprise access applications," commented Jaswir Singh, chief financial officer & chief operating officer of ADVA Optical Networking. 

Ericsson's Q2 Sees Decline in Network Sales, Growth in Global Services

Ericsson's Q2 Sales increased 1% YoY and 9% QoQ to SEK 55.3 billion, although sales for comparable units, adjusted for FX and hedging, decreased -6% YoY. Gross margin was down YoY to 32.0% (37.8%), and from 33.3% QoQ. Net income decreased to SEK 1.2 (3.2) b. due to lower profitability in Networks and increased loss in ST-Ericsson. EPS diluted was SEK 0.34 (0.96). EPS Non-IFRS, excluding restructuring, was SEK 0.78 (1.60).

“In the quarter, demand for Global Services and Support Solutions was strong, while Networks sales decreased YoY mainly due to the expected decline in CDMA equipment sales as well as lower business activity in China, including weaker sales of GSM and lower 3G sales in Russia,” says Hans Vestberg, President and CEO of Ericsson. “In Global Services all areas showed good growth in the quarter due to operators’ focus on operational efficiency and high project activities. The strong development for Support Solutions was driven by billing systems and TV solutions. Global Services and Support Solutions together represented about half of the Group’s revenues. The growing Global Services business has a dilutive impact on gross margin."

Some notes from the company's financial presentation:

  • Networks sales decreased -17% YoY primarily due to the expected decline in CDMA equipment sales as well as weaker development for GSM sales in China and slower operator investments in Russia. CDMA equipment sales declined close to -50% YoY to SEK 2 b. and are expected to continue its rapid decline in H212.
  • Ericsson now has seven contracts for its Smart Services Router (SSR) signed to date.
  • Ericsson sees greater LTE sales as the technology is now reaching outside initial rollout countries.
  • Global Services continued to show strong momentum with growth of 26% YoY and 17% QoQ and all areas grew. 
  • The acquired Telcordia operation added sales of SEK 1.1 b. in the quarter, split 50/50 between segments Global Services and Support Solutions.
  • Global Services represented 44% (35%) of total sales in the quarter compared to 40% in Q112. Support Solutions sales were strong with 47% growth YoY and 15% QoQ driven by strong demand for billing systems and TV solutions.
  • The company noted 17 new signed contracts in Managed Services. 
  • Both Global Services and Support Solutions were positively impacted by the added sales from the acquired Telcordia. The growth in these areas are dilutive to the Group's overall gross margin.