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Verizon-Vodafone: Who Buys Whom
Wednesday, 08 September 2010 00:44
Vodafone sold its holding in China Mobile for $6B. Press are speculating ivanthey might use the money to buy Verizon out of Verizon Wireless or Vivendi out of SFR, France's #2 mobile. Vodafone today has a $128B market cap and about $60B debt; Verizon $85B with $40B debt and $40B+ in deferred taxes, etc; Vivendi $23B with $15B debt.
    The raw numbers point to Vodafone as the surviving entity. Both Verizon and Vivendi assert if any deals go down they are buyers, not sellers. But both are struggling to cover their dividend with earnings. Verizon just cut wireline capex 24%. Vodafone is rumored to be searching for a new Chairman.
     In March, I wrote (below) that Ivan is getting closer to retirement every day. With a standard employment contract he would probably be tens of millions richer if he sold the company before he leaves. A few days after I reported that, Ivan said no way was he selling.
    Verizon is holding back on almost everything major except the LTE build while they decide who will succeed Ivan. Lowell McAdam from wireless is the outsiders pick, with CFO John Killian also in the game.
Last Updated on Wednesday, 08 September 2010 01:22
Dane Bringing High Speed, Low Price to California
Tuesday, 31 August 2010 12:18

Xavier Niel's 30 euro unlimited triple play took 5M customersSonic_network from France Telecom, transformed the European Internet, and made him a billionaire. Dane Jasper's Sonic.net is (finally) bringing the same "low price, maximum speed, high volume" model to California. Sonic.net is offering 100's of thousands of Californians "up to 20 megabits" + unlimited national phone service for $56, about the same price as Verizon is charging for the 10-15 megabit DSL service alone. Verizon charges about $75 for similar and AT&T probably $84, about 50% more.

      Unless you live far from the exchange, Sonic.net offers a better deal than any large U.S. carrier. Dane has some interesting ideas about TV to implement as soon as practical, although I think he's going to be very busy just filling orders for a while.

     The word came first from Paris. Benoit Felten, Europe's most interesting fiber analyst, wrote I should read his interview with Dane. Now that I've reported from the states, look for reporters to check this out and create a storm. I told Dane - who's been asking me for years whether the Free.fr model would work in the U.S. - that the low price, high volume model has proven itself time and again. He hasn't quite brought U.S. prices down to French levels, but this is the biggest move in that direction since Mike Powell's rules killed the last big CLEC in 2003-4.

Last Updated on Monday, 06 September 2010 19:46
Lantiq's Latest: 16 Channel VDSL, HD-speed 802.11, 2 Gigabit NP
Monday, 23 August 2010 02:25
lantiq_laptop_demoImran Hajimusa of Lantiq demo'd four TV streams going wirelessly across a large room to four HDTV's several months ago. They are now shipping the WAVE 300 in volume. Ulrich Huewels is confident it can support HD video. Lantiq tells me a large U.S. carrier will soon surprise by moving to wireless home networks. They've also doubled the density of their Vinax VDSL linecard chips and are sampling the two gigabit GRX gateway processor.

     Replacing wires has long been the grail for in-home networking. Vendors have been making promises for years, but field tests were not up to carrier grade. Carriers can't accept networks that only work for 95% of homes because the truck rolls to the other homes can be brutally expensive. They need close to 100% real world performance. I'm going to be skeptical until carriers prove the promises in the field, but the buzz for the new beam-forming chips is good.


  The new VINAX V3 supports 16 channels for the 50 meg VDSL2 Profile 17a and 8 channels for the 100/100 meg 30a. Power is 0.9W per channel. Bonding is supported and VINAX "is ready to support full System Vectoring, a VDSL2 enhancement that will reduce crosstalk."

Last Updated on Wednesday, 25 August 2010 19:16
Laughing Loudly at Lawyer & Lobbyist Lies
Friday, 13 August 2010 17:57
Lfalstaff_welles_posterying if it helps your client is expected of U.S. lawyers, codes of ethics be damned. The best in D.C. collect $2M/year because they can convince smart people that 2+2=5. That works exceptionally well in Washington, where today's enemy is tomorrow's ally. There's a code "never make it personal" that prevents plain speaking about obvious lies from another lobbyist. The spirit reminds me of frat boys who help each other getting coeds drunk and uninhibited. Meeting for drinks afterwards, they high-5 each other.
     Duplicity is on all sides of the D.C. debate. Prepping an advocate of neutrality on technology for an FCC hearing, I told him to take an error out of his statement. A few hours later, the word came back "our people tell me that's what will persuade the commissioners so I should leave it in." 
    Karl Bode at DSLR found the latest example. Rick Whitt of Google is no better and no worse than his longtime comrade in arms, Jim Cicconi.
Last Updated on Saturday, 14 August 2010 21:16
Worst U.S. Broadband Quarter Ever ~350,000
Wednesday, 11 August 2010 09:18

The numbers are clear. AT&T actually went negative. They are getting killed by cable were they haven't done their DSL upgrades (U-Verse), The 1/3rd cut in U-Verse spending in January, 2009 by now leaves them 3M homes behind their earlier plans. Cable did somewhat better, but was significantly down. The numbers are from Leichtman and do not include the smaller carriers.

Last Updated on Saturday, 14 August 2010 21:11
China Q2: 5.81M, Not 5.5M
Tuesday, 03 August 2010 12:06
The 5.5M estimate in the last DSL Prime was based on April and May. Lee Ratliff of iSuppli writes the June numbers are in and a strong month raised the actual Chinese total to 5.81M.
     Lee raised his 2014 estimate to 223M because "2009 and the first half of 2010 have been white hot. There's a new trajectory on the curve." He remains concerned about the potential of a melt-down in China’s economy, but notes that kind of thing is almost impossible to forecast.
      Both he and I would very much appreciate data about the rapidly expanding cable industry in China. It's moving to digital, starting to add modems, and I expect it will be a powerful incentive for all companies to invest more and grow.
Verizon: 24% Capex Decline
Tuesday, 07 September 2010 20:07
At Verizon "Capex declined 36% and capex/sales remained at record-low levels," a Merrill Lynch report read, but after adjusting for the Frontier spinoff I come to a 24% figure is more appropriate for this article. The $2B cut in Verizon wireline capex - and another $2B at AT&T - are a painful blow to those who want better networks.
    I've called Verizon's Larry Babbio a "hero" for building FiOS. Verizon's LTE network promises to be among the best in the world. But the sharp drop in Verizon and AT&T's capital spending is a huge issue for D.C. policy. It also puts the lie to the frequent D.C. claim that neutrality is likely to have a large effect on investment. The carriers won a major court victory on neutrality (the Comcast decision) and nonetheless have more than decimated investment.
   Verizon took $2.3B in pretax charges to get rid of 11,000 employees last quarter. $1.9B of that was charged to the wireline operating companies, suggesting nearly all the cutbacks were on the wireline side. AT&T not long ago eliminated an entire layer of management and essentially put the wireless side in charge. Verizon's likely goal is to have a single company that runs both wireless and the remaining wireline.
Last Updated on Monday, 20 September 2010 04:18
Verizon Turns on ADSL2+ to 1/3
Monday, 30 August 2010 17:14
Adtran_5000Verizon has been installing ADSL2+ in most new equipment for years but not offering speeds above 6 megabits because only a small fraction of their 30M lines were covered. They now are offering 10-15 megabit down to about 4M customers for about $55 to about $70/month. Given that the majority of customers are beyond the 7,000 foot cutoffs for the 10-15 meg service, that means they have ADSL2+ to about a third of the network. Most of the rest are behind remote terminals or connected to DSLAMS 5-12 years old, neither of which are scheduled for volume upgrades.
      Experience from Britain, France and the UK has been that almost no one gets the 20 & 24 megabits possible with ADSL2+ and only a minority can even get 10 megabits down. DSM has improved things some, especially for the lines that were marginal for any given speed, and minor improvements in the chips keep improving performance. Current state of the art is that 15-25 megabits down is typical about half a mile from the DSLAM, less than 10 megabits from around a mile and a half. These are realistic averages, but there's an enormous difference from home to home and office to office. Your speed may well be different than the suggested averages. For example, I heard today of a customer at 5400 feet getting 21 megabits.
     Rob Pegoraro at the Washington Post tested the addresses of 13 friends and co-workers across the District and Alexandria at Verizon's site, and none came up as eligible for its fastest DSL. Six could get only the second-slowest tier of DSL, with downloads of 1.5 to 3 Mbps. Another six qualified for Verizon's 4- to 7-Mbps DSL. One could get FiOS, but none could get the new 10-15 megabit tiers. That may be a glitch, but overall fewer than 1 in 6 lines can get the higher speeds.
Last Updated on Tuesday, 31 August 2010 01:49
Telco Cloud Computing Shadowed by Project Failures
Sunday, 22 August 2010 23:15

Peter Hall of Ovum just released a report touting AT&T, BT and other nasa_cloudstelcos as natural leaders in cloud computing. Repeated failures on telco projects leave me dubious about such ventures. British Telecom has lost $billions on then-CEO Ben Verwayen's move into "Global Services" and in particular massive overruns and failures in the IT project for the National Health Service.

    Amy Schatz (WSJ) reports AT&T also hasn't been able to deliver on a big government contract. "A $2.8 billion Treasury Department project to update the agency's computer network and telecommunications, which has resulted in 45 data centers that can't support newer Internet technologies" has been targeted by OMB. AT&T is in the center of this one. In 2007, they promised to deliver "a secure enterprise network that will facilitate the convergence of data, voice and video technologies into a single network infrastructure that supports the efficient operation of applications and services across the Treasury's entire operating environment." (Release below)  They failed.

Last Updated on Thursday, 26 August 2010 17:52
Bouygues Quadplay Sweeping France
Wednesday, 11 August 2010 12:01

25-35% of French broadband net adds are going to Bouygues/Ideo, ahead of stalwarts Free.fr and France Telecom. Last year Bouygues launched a Martin_bouygues45 euro ($60) Quadplay and it's become the hottest product in Europe. Bouygues, France's third wireless carrier, has come from nowhere to among the landline leaders with an offer of about a 25% discount. The land of the 30 euro triple play has become the land of the 40-60 euro quadplay, as SFR and France Telecom have now had to offer quad. 45 euro at Bouygues gets unlimited landline calls to 100 countries, "up to 20 meg" ADSL, 90 (not so popular) TV channels and 120 minutes of mobile calls.

     Frederic Jeanmaire of Merrill Lynch has put a buy on Bouygues. He acknowledges that mobile prices will be driven down by the entry of Xavier Niel and Free.fr in 2012, perhaps 10-25% more.

Last Updated on Tuesday, 17 August 2010 20:40
Dado Chops 20% as ADSL Falters at Ikanos
Wednesday, 04 August 2010 15:41
ikanos_velocity_chipsetIkanos wrote down $12.9M of ADSL chips. Sales Q3 will be down 22% or more from $55.6M in Q2. 20% of employees are on the way out. Dado Banatao, legendary chip entrepreneur now in control of the company, has brought in new management from SiRF, another Tallwood VC portfolio company.
    Dado is now a VC looking for a way out of a troubled investment. He pointed out on the call that "VDSL is a growth segment." He sees the future of the company as highly differentiated next generation products. He expects revenue from bonded DSL in 2011, with both the U.S. and Asia interested. Dado claimed "Our vectoring is beautiful compared to our competition," but like then-CEO Mike Gulett he did not provide enough details to confirm that. Dado doesn't expect vectoring out of the lab until 2012.  
   New CFO Dennis Bencala is blunt."ADSL is a declining market. We have decided not to participate in RFPs that do not meet our requirement for margins." That's possibly true on the CO side, but most of the 5.8M new broadband customers in China needed ADSL modems.
Last Updated on Sunday, 08 August 2010 21:27
"It’s hard to believe that basic things like capacitors are in such short supply"
Monday, 02 August 2010 10:50
Ikanos_chips_colorful.joglantiq_chipIt's hard to imagine that in a very weak world economy there's real demand that blows out the whole system. But shortages are widespread. A manager of a very large network emailed "Our biggest problem at the moment is getting equipment from our key vendors.  It’s hard to believe that basic things like capacitors are in such short supply." 
       Shortages often comes from self-fulfilling prophecy. When you fear a shortage, you naturally stock up to protect yourself. U.S. TV host Johnny Carson once made a joke about a toilet paper shortage on the East Coast and by the following afternoon there was one. Shoppers had bought up everything in the stores.
       Lots of datapoints suggest the shortage clears rapidly but currently TSMC, the world's largest foundry, is running 100%.
Last Updated on Monday, 02 August 2010 12:28
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