Telecom News

Survey: 66% of consumers happy with their pay-TV subscription

Sean Buckley — Wed, 16 May 2012 11:10:34 -0400

Are you happy with your pay-TV service? Well, according to a new American Customer Satisfaction Index (ACSI) released by the Ross School of Business at the University of Michigan, 66 percent of U.S. consumers say they are dissatisfied with their service. Interestingly, the overall pay-TV industry only slightly beat out the one of the kings of consumer frustration--the airline industry, which scored a 65 ACSI. FierceIPTV reports the survey findings. Read more...

Cyan names telecom industry veteran Mark Floyd as CEO

Sean Buckley — Wed, 16 May 2012 10:45:58 -0400

Cyan has appointed Mark Floyd as its chief executive officer, in a move the company said will help it take advantage of new international growth opportunities.

Floyd

Having joined the board of directors in 2007 and named the company's board chairman this January, Floyd is hardly a stranger to Cyan. He will also continue to serve on the Petaluma, Calif.-based company's board.

Floyd replaces company founder Michael Hatfield, who will remain as the vendor's president.

In his role as company president, Hatfield will oversee overall solution strategy and driving development, engineering, product management, and marketing.

Although Cyan has a strong domestic U.S. customer base, the vendor has begun to build strong inroads in several international markets.

Floyd said, "Cyan has seen significant growth in the U.S. and has begun to expand in Europe and Latin America," and that there's "an even greater opportunity to increase our investment in international markets and accelerate our growth."

For more:
- see the release

BT employs Equinix data centers for its Radianz cloud-based service

Sean Buckley — Wed, 16 May 2012 09:43:05 -0400

BT (NYSE: BT) is leveraging Equinix's (Nasdaq: EQIX) data centers to deliver its cloud-based Radianz Venue targeting financial-trading companies with a set of hosting and low-latency interconnectivity solutions.

Through this agreement, BT will offer Radianz Venue capabilities from Equinix's data centers. BT's move adds 10 financial ecosystems to its Radianz footprint across North America, EMEA and Asia Pacific.

BT Radianz Venue will offer three low latency products:

BT Radianz Venue Access: connectivity to the BT Radianz cloud from 40 non-BT centers, including Equinix and other data center players in the three continents it will initially serve.
BT Radianz Venue Presence: an extension of the BT Radianz Proximity hosting proposition, BT Radianz Venue Presence that enables BT to manage a client's server and connectivity infrastructure hosted in a third-party data center.
BT Radianz Venue Interconnect: designed to reduce network latency between trading venues within the same city and between global cities.

Tom Regent, president, Global Banking & Financial Markets and Sales & Marketing, BT Global Services, said its relationship with the data center provider will provide capabilities to both Equinix's and BT's customers.

"Customers at Equinix's global data centers can now benefit from BT's award-winning managed hosting and proximity services along with access to the BT Radianz Cloud, the world's largest networked financial community, and the option of interconnectivity to and between worldwide trading venues," he said in a release announcing the new service. "This agreement further expands the footprint of our BT Radianz Cloud portfolio and continues to build our reputation as a pioneer and a market leader in creating solutions specifically developed for the financial services industry."

Given the prohibitive cost of building out private networks, the service will likely resonate with financial trading companies that are looking to quickly expand their global scale via a single source. Through this offering, financial trading companies will be able to access BT's Radianz platform in addition to a wide host of connectivity options.

For more:
- see the release

Consolidated Communications raises cash to complete SureWest acquisition

Sean Buckley — Wed, 16 May 2012 09:23:02 -0400

Consolidated Communications (Nasdaq: CNSL) plans to generate new funds to wrap up its pending acquisition of fellow independent ILEC SureWest (Nasdaq: SURW).

The Mattoon, Ill.-based service provider, as reported in the Sacramento Business Journal, plans to sell $350 million in senior notes that will mature in 2020 to partially fund the deal.

SureWest agreed to be purchased by Consolidated for $340.9 million in cash and stock, in February. When the purchase is complete, the combined company will have operations that stretch across six states.

Although both service providers were raised in separate markets with little overlap as traditional independent telcos, their overall strategy in recent years has been to transform themelves into broadband and IP-centric services providers, offering consumers and businesses an array of IPTV and Ethernet services.

For more:
- The Sacramento Business Journal has this article

House panel to examine broadband stimulus spending

Chris Rizo — Wed, 16 May 2012 09:05:11 -0400

A congressional panel is scheduled to meet this morning to discuss broadband loans and grants programs bankrolled by the 2009 federal economic stimulus package.

Top to bottom: Strickling, Adelstein, Zinser to testify.

The House Committee on Energy and Commerce Subcommittee on Communications and Technology will met at 10 a.m. ET, to review broadband stimulus efforts from the American Recovery and Reinvestment Act (ARRA; Pub.L. 111-5).

A Republican-drafted subcommittee staff memo indicates that discussions at the hearing will likely include whether U.S. taxpayers "are getting their money's worth" from the $7.2 billion in broadband grants and loans authorized in the stimulus package.

"Despite claims of ARRA projects being 'shovel ready,' recipients of 233 National Telecommunications and Information Administration awards worth $4 billion have spent just $1.6 billion of it so far. Less than a dozen of the projects have been completed," the memo reads.

Among senior administration officials scheduled to testify before the Republican-led subcommittee: Assistant Commerce Secretary Larry Strickling, administrator at the National Telecommunications and Information Administration (NTIA); Jonathan Adelstein, administrator of the Agriculture Department's Rural Utilities Service; and Commerce Department Inspector General Todd Zinser.

For more:
- see the subcommittee Republican staff memo (PDF)

Terremark ups its North American cloud capacity in the Denver market

Sean Buckley — Wed, 16 May 2012 07:07:00 -0400

Terremark, Verizon's (NYSE: VZ) cloud and data-center subsidiary, has responded to the need for increased cloud-service capacity by U.S.-based businesses by implementing a node of its Enterprise Cloud at its Denver-based data center.

By introducing a cloud node at the Denver data center, the service provider not only adds another cloud-enabled data center to its growing footprint, but it will also be able to offer area businesses secure cloud computing resources.

Featuring over 70,000 square feet of floor space and redundant subsystems to support its IT infrastructure services, the Denver data center is part of its series of almost 50 data centers located in key global cities.

The company said the facilities offer advanced security, redundant power and monitoring, in addition to advanced colocation and cloud technology for mission-critical applications.

Coming on the heels of its latest move to increase its data center presence in Brazil and earlier in Colombia, the introduction of the cloud node at the Denver data center is part of Terremark's ongoing data center and cloud service expansion effort.

For more:
- see the release

EarthLink addresses business cloud security with new workspace service suite

Sean Buckley — Tue, 15 May 2012 12:32:58 -0400

EarthLink (Nasdaq: ELNK) is giving its business customers another option to secure their internal applications in the cloud with the launch of its Cloud Workspace service, the company announced today.

Building on its recently debuted EarthLink IT services package, Cloud Workspace is a hosted desktop service that the company says enables customers to control business applications and data with secure access for their employees over any device and via any Internet or private MPLS connection.

Functioning as a virtual office from any location, it currently supports 250 traditional administrative office applications such as files and e-mail. As a customizable solution, it also allows customers to add their own applications that relate to the needs of their specific business needs.

EarthLink said the service is ideal for businesses that range from 50-600 employees that lack a large IT staff or the capital to invest in managing on-site servers and storage. Along with enabling cost savings, the new product ensures security of critical applications by disabling them on an employee's device that may have left a company, for example.

Users can also access EarthLink's IT Services product suite via the myLink customer portal using a centralized IT Services Center dashboard.

For more:
- see the release

Special Report: Wholesale provider leaders to watch in 2012

Zayo opens new low-latency Chicago to Seattle route

Sean Buckley — Tue, 15 May 2012 11:58:36 -0400

Zayo has added a new route between Seattle and Chicago, giving its financial, content and wholesale customers a new option for low latency services.

Already providing a number of network services between Seattle and Chicago, the new service, which will be available in the third quarter of 2012, claims to improve latency by 5 percent to 15 percent by leveraging various optical technologies and network construction methods.

Caruso

In addition to reducing the network distance by about 100 miles, Zayo will engineer the 100G system as an express route with add/drop points being limited to about four locations. This new low latency service will complement its existing fiber service that currently provides add/drop points in various markets between Chicago and Seattle.

Dan Caruso, President and CEO of Zayo, said that providing low latency between these two cities is important. "Traffic from Asia terminates in Seattle, and many of the nation's largest data centers are located in Northern Oregon and Central Washington."

While the initial target will likely be financial trading customers that want to reduce latency for real-time trading applications, Zayo said that it is examining how it can also address Dark Fiber customers on this route. But like all of its initiatives, the competitive provider will only move forward with its plans to overbuild the route only if it sees "sufficient demand for Dark Fiber service."

Besides this route, Zayo's pending acquisition of AboveNet will provide Zayo with an expanded set of low latency routes in both North America and London, a major European financial hub. When it completes this deal, it will be able to address low latency capabilities to address customer from Seattle to New York and Washington DC with stops in Chicago and Philadelphia. In addition, traffic that originates in Asian and European cable landing stations to North American cities will also see a potential decrease in latency.

For more:
- see the news release

Special Report: Wholesale provider leaders to watch in 2012

Who are the highest paid CEOs in the cable and satellite industries?

Sean Buckley — Tue, 15 May 2012 11:24:28 -0400

Like the traditional telecom industry, there is no shortage of cable and satellite CEOs receiving multimillion-dollar compensation packages. However, in 2011 a number of key cable and satellite executives saw their compensation decline. Brian Roberts, CEO of Comcast (Nasdaq: CMCSA) saw his compensation decline 13 percent, while Michael D. White, the CEO of DirecTV (Nasdaq: DTV), took home less than $6 million in 2011. This week, FierceTelecom's sister publication FierceCable takes a look at executive pay in the cable and satellite industry segments. Read more...

Lightower expands network, colocation presence in Providence, R.I.

Sean Buckley — Tue, 15 May 2012 10:59:07 -0400

Lightower is giving its carrier and business customers in Providence, R.I., more options with the addition of 21 miles of new fiber routes that will serve the Pawtucket and Seekonk communities.

Complementing the new fiber build is an expansion of its Rhode Island colocation facility in Providence--at 235 Promenade Street--known as "The Foundry."

At The Foundry, Lightower offers connectivity to all of its fiber-based Ethernet and transport services. As a carrier-neutral facility, enterprises and wholesale customers can also get access to a wide assortment of CAPs, ILECs, ICPs and IXCs.

Coming on the heels of its recent move to add 100 new fiber miles in Central and Northern New Jersey, this latest network build illustrates that network expansion via organic efforts and acquisitions has been an ongoing trend for the competitive provider.

But these efforts are not based on a build it and they will come mentality. Rob Shanahan, President and CEO of Lightower, said that it will "invest where we see this kind of demand" from wholesale carrier and business customers in key markets like Providence, R.I.

For more:
- see this Telecom News Now post

Special Report: In detail: Tracking the 100G path

AT&T's Digital Life could make its wireline broadband base even stickier

Sean Buckley — Tue, 15 May 2012 10:23:15 -0400

AT&T's (NYSE: T) recent launch of its Digital Life home control and monitoring service illustrates the telco's need to generate new wireline and wireless revenue streams.

As noted by FierceWireless, AT&T kicked off the launch of Digital Life in grand fashion at this year's CTIA show in New Orleans, showcasing the capabilities in a Garden-District home.

In the home, the network sensors are connected via short-range wireless technologies such as WiFi, Z-Wave or a wireline-based HomePNA or HomePlug connection, while any information collected at the home is sent to the broader Internet via either an AT&T 3G wireless connection or over the user's existing broadband connection supplied by AT&T or any other service provider.

This is not AT&T's first foray into the home-control market segment. In 2006, Cingular, the former name of AT&T's wireless division, launched a similar service as an add-on to its existing wireless plans for $9.95 that, after not getting any real traction, was shut down.

One noticeable omission about the service is pricing. Verizon (NYSE: VZ) and Comcast (Nasdaq: CMCSA), which have launched similar products, have priced their respective home control packages from $29.95 to $59.99, depending on the type of service package a consumer or SMB chooses to buy.

While the new service is clearly focused on the wireless segment, Digital Life could impact on the telco's wireline side.

For one, AT&T could use the still nascent home control service as another bundled element to upsell existing DSL and its growing base of U-verse subscribers.

During the first quarter of 2012, AT&T added 718,000 new U-verse high speed subscribers to reach a total of 5.9 million, offsetting losses from DSL. About three-fourths of AT&T U-verse TV subscribers use a triple- or quad-play option, driving up ARPU for U-verse triple-play customers to $169 a month.

Outside of traditional consumer customers, the small to medium business could also be a target for this service. Interestingly, a big portion of new U-verse broadband subscribers consists of SMBs adopting the service that they purchase as part of a bundle that also includes wireless service.

The advantage that AT&T has with using its existing consumer or SMB customer base is the brand recognition and long-term relationships the telco has with these segments. Those customers that don't have a security system from a traditional company like ADT, a clear competitor here, might be tempted to purchase it from a company that it works with daily for its communications needs.

Jeff Heynen, directing analyst for broadband access and video at Infonetics, believes that these kinds of services are another way that broadband providers can create greater loyalty.

"The potential customer loyalty and incremental revenue attached to home automation services, particularly home security and home energy management, are too enticing for any operator to pass up," said Heynen.

Taking it one step further, Analysys Mason agreed that the home automation market is set for major growth. According to the analyst group's latest M2M forecasts, security and surveillance solutions in North America will generate $1.2 billion in connectivity-related revenue (wholesale revenue) for carriers by 2021.

Besides being mainly a cellular service that allows users to access the cloud-based service from any device, the service does not require the user to be an AT&T subscriber, and it plans on being a nationwide service. Similar services from competitors are only available in select markets.

But with these new capabilities come new responsibilities and challenges for the telco. What happens if the house alarm does not go off or the consumer can't open their front door properly? AT&T will have to have a team that's equipped to take those calls and make on-site or remote repairs, something that's been traditionally done by the wireline technicians who have interaction with homeowners and businesses.

Perhaps that's why the telco is going to initially trial the service in two markets this summer--Atlanta and Dallas. It can use the experience it gains in those two markets as a blueprint to learn how it would operate the service on a broader scale.

AT&T is not the only service provider offering a home control service. Besides fellow ILEC Verizon and cable operator Comcast, now Time Warner Cable (NYSE: TWC), has stepped up to the plate with a home control/monitoring service suite.

Regardless of the challenges they may face, the fact remains that service providers like AT&T need to find new revenue sources like home control that are outside of their traditional telco comfort zone to make their customer base stickier.-- Sean

Overture enhances European and APAC sales teams with four new regional offices

Sean Buckley — Tue, 15 May 2012 10:06:03 -0400

Overture's appointment of new sales leads to oversee four key EMEA-APAC regions--including India, Italy, Malaysia and Russia--instantly gives the vendor locally-based support to serve new growth opportunities outside of North America, the company said Tuesday.

The naming of these new sales managers follows similar moves to bolster its sales efforts in both Canada and the Caribbean and the Latin American markets.

Its international expansion is in-line with the goals the company set when it launched its rebranding initiative in February, following its acquisition of Hatteras Networks.

"We've always done well in the U.S. and have had good sales coverage," Jeff Reedy, CEO of Overture, told FierceTelecom at the time. "We are now focused on market expansion outside the U.S. in Canada, Latin America, Europe, and Asia Pacific. We have a few benchmark customers in each of those regions, so we feel we know the success formula and we want to build on that."

The timing to deepen its presence in the APAC and European markets is spot on. According to Infonetics, the carrier Ethernet equipment opportunity in these regions should exceed $35 billion by 2015 as more service providers roll out Ethernet to fulfill local and international large enterprise needs.

For more:
- see the release

PSTN-to-IP migration must be done with care, say Verizon, AT&T

Sean Buckley — Tue, 15 May 2012 07:03:54 -0400

AT&T (NYSE: T) and Verizon (NYSE: VZ) are clearly two service providers making a migration away from the PSTN to all IP, but the move has to carefully take into account a number of key technical, business and operational issues.

Left, Verizon's Melone. Right, AT&T's Donovan.

Speaking at the recent ATIS Executive Roundtable event during this past week's CTIA tradeshow in New Orleans, Tony Melone, CTO of Verizon and John Donovan, SVP of technology and network operations at AT&T, outlined the challenges they and every incumbent telco will face.

Both service providers have been increasingly offering IP-based voice services as their traditional legacy PSTN revenues decline every quarter. AT&T's traditional voice lines declined to 37.8 million at the end of the first quarter of 2012, while Verizon ended the quarter with 23.7 million total traditional voice lines.

Being incumbent service providers, the obvious issue is that delivery of IP-based voice service cannibalizes an existing revenue stream that has served them for the better part of a hundred years.

Melone said that moving to all-IP based voice network is a careful strategy of weighing regulatory issues and maintaining new and legacy services.

"One of the first things that come to mind is if we have a new network let's make sure we don't try to force old products on the new network," he said. "I think we had the tendency both internally to do some things by never wanting to cut the cord on some products that were making some revenue to incent people to move to the new. Then, in some cases we have some regulatory challenges on what we can do and not do on the on the new and the old network."

Melone added that the inevitable realities of migrating away from the PSTN to IP for an ILEC like Verizon creates the other issue of having to support a network where revenue is declining every quarter.

"It's a delicate balance of doing some things to aggressively to navigate that effectively, but there's still some hurdles along the way that we need to make sure both internally and externally on the regulatory front that we manage and push," he said. "I think that we need to be opportunistic. To think we can in the next five years we force the issue and reduce our cost structure by shutting down the old network is unrealistic."

Donovan, who is also seeing a rise in IP revenues while traditional PSTN voice revenues and lines decline, agreed that the migration to IP shouldn't be done hastily.

"If you look at old services and old platforms over here and the new services on new platforms, there's a minefield you have to walk through," he said.

Echoing some of the same comments of his ILEC counterpart, Donovan said there are a number of bad outcomes a service provider needs to avoid: putting new services on new platforms is expensive and putting new services on old platforms.

Donovan said another key issue is that any transition needs to take into account the back office operations that have existed for decades.

"It is very tricky to work towards new platforms and new services because there are a lot of processes for these legacy services that are highly embedded in customer operations so there's a lot at risk there," he said. "I'd like to go as fast we can prudently do so, but having 6,000 or so nodes of old platforms and going to 4,000 interim nodes to retire for the long run does not make a good business case."

Despite these challenges, Donovan encourages "everybody that is predicting the demise or the overnight extinction of the PSTN to just think about what you can do to monetize in this pivot because there's a big opportunity there."

Service providers are making progress to develop methods and standards that take into account the operational and regulatory issues in transitioning the PSTN to IP.

ATIS itself, earlier this year, launched a new initiative to create standards and best practices to help service providers like AT&T and Verizon transition their TDM-based PTSN networks to IP.

With the new Transition Landscape Team, ATIS has tasked itself with three main goals: evaluating PSTN replacement network architecture and capabilities, defining requirements for services on an IP-based network, and examining if there are relevant standards to handle IP-based telephony as a replacement for PSTN telephony.

In addition, the transition team will consider what impact an all IP-based network and related security issues will have for VoIP providers like Vonage and a host of other OTT providers that can be accessed via a user's cable or DSL broadband connection.

MTS Allstream earnings reach $53M on IPTV, business services increase

Sean Buckley — Mon, 14 May 2012 11:49:15 -0400

MTS Allstream (Toronto: MBT.TO) reported that earnings rose to CAD 53.1 million (USD 52.9 million), up from CAD 43.1 million (USD 43.0 million), in the same period a year ago with a 19 percent jump in IPTV earnings and a 4 percent increase in Converged IP services for businesses.

The growth of its IP-based consumer and business services drove up the telco's consolidated EBITDA 2.8 percent over Q1 2011, while earnings per share were CAD 0.80 (USD 0.79), up from CAD 0.67 (USD 0.67), in the same quarter a year ago.

At MTS, the division that serves consumers, the service provider reported that wireless, broadband data and IPTV generated 8.9 percent revenue growth, offsetting ongoing declines in local and long distance voice and legacy data services. On a year-over-year basis, broadband and converged IP services rose 13.6 percent, to CAD 52.5 million (USD 52.4 million).

Of particular note, the number of customers that took a bundle increased by almost 6.9 percent to about 92,000 during the quarter.

Driven by the ongoing growth of IP on-net fiber-based services like Ethernet and Unified Communications (UC), Allstream reported that it increased EBITDA by 1.7 percent, to CAD 29.3 million (USD 29.2 million). Converged IP services rose 4.1 percent, to CAD 61.1 million (USD 61 million), while Unified Communications revenues were up 0.9 percent, to CAD 21.8 million (USD 21.7 million).

During the quarter, Allstream also continued to build a foundation for new business customer growth by adding 99 buildings to its fiber network, ending the quarter with a total of 2,487 buildings.

Of course, Allstream, like its MTS consumer counterpart, saw continued declines in traditional local voice services and legacy data. Local access declined 3.9 percent, to CAD 66.9 million (USD 66.7 million), and long distance and legacy data declined 12.8 percent, to CAD 19.1 (USD 19.1 million).

MTS Allstream's shares were trading Monday morning at CAD 33.99 (USD 33.90), down CAD 0.47 (USD 0.47), or 1.36 percent, on the Toronto stock exchange.

For more:
- see the earnings release (PDF)

Special Report: Wireline in the first quarter of 2012

BT's cost-cutting, broadband service drive 3% earnings rise in fiscal Q4

Sean Buckley — Mon, 14 May 2012 11:16:15 -0400

BT's (NYSE: BT) focus on reducing costs and growing its broadband base put the UK incumbent provider on steady ground in its fiscal fourth quarter of 2011.

For Q4, the service provider reported that earnings--before interest, tax, depreciation and amortization (EBITDA)-- rose 3 percent.

As seen in previous quarters, BT's cost-cutting initiatives gave earnings a boost as revenue dropped to £19 million ($30.6 million), a factor it relates to a cut in transit service rates. It also continues to see slow spending throughout Europe and in the small to medium enterprise (SME) market.

Once again, the star in BT's portfolio was broadband. During Q4, it added over 136,000 retail broadband customers, a figure that represents 44 percent of the DSL, Local Loop Unbundling (LLU) and fiber-based broadband market net additions.

Of particular note was its fiber-based BT Infinity service. It added 131,000 new subscribers during the quarter, bringing its total to over 550,000 subscribers.

Likewise, the service provider reported continued progress with its BT Vision IPTV service. It added 28,000 customers in the quarter, bringing its total IPTV customer base to over 700,000.

Meanwhile, business revenues declined 6 percent during the quarter due to lower IT hardware sales and a decision to move away from low-margin IT hardware trade sales.

Despite the challenges it faced in Q4, BT forecasted that underlying revenue excluding transit will show an improving trend in 2013 and 2014.

"While we will be impacted by economic and regulatory headwinds, we expect to continue to grow profits over the next two years, with normalised free cash flow growing to above £2.4billion ($3.87 billion) in 2014," BT CEO Ian Livingston said in the earnings release.

Shares of BT were trading at $32.95, down 0.53, or 1.58 percent, in morning trading today on the Nasdaq.

For more:
- see the earnings release
- Reuters has this article

Special Report: Wireline in the first quarter of 2012