More specifically,  ADTRAN had sales of more than $184 million, as compared to $150 million for 2Q 2010.  [...]]]>

ADTRAN (www.adtran.com) reported its financial results for the second quarter of 2011 on July 12, 2011.  Once again, the company continues to roll, racking up an increase of 23 percent as compared to last year’s results.

More specifically,  ADTRAN had sales of more than $184 million, as compared to $150 million for 2Q 2010.  Operating income hit an all time record high of $51.3 million for the quarter, with net income up 33 percent to $36.9 million for the quarter and earnings per share going up 27 percent to $0.56 for the quarter.

Stockholders will get a quarterly cash dividend of $0.09 per common share, with a payment date of August 11, 2011.

I don’t think there’s been a quarter where ADTRAN has lost money or even had flat growth, if memory serves.

Since Grandstream sells SIP phones, SIP Print’s call recording systems plug right into Grandstream’s customer base.

SIP Print will record up to 200 seats per [...]]]>

SIP Print (www.sipprint.com) and Grandstream Networks (www.grandstream.com) have teamed up to sell SIP Print’s SIP-based call recording and monitoring service to Grandstream customers.  Yes, it’s a reseller deal.

Since Grandstream sells SIP phones, SIP Print’s call recording systems plug right into Grandstream’s customer base.

SIP Print will record up to 200 seats per system, and you can cluster multiple systems for unlimited seats. 

In the Orange announcement last week, the two telecommunications companies are establishing a “50/50” joint venture in the fourth quarter of 2011.  After three years, the two expect to save a [...]]]>

Deutsche Telekom (DT) and France Telecom (FT) have formed a joint venture for procurement.  Shouldn’t they just merge and get it over with?

In the Orange announcement last week, the two telecommunications companies are establishing a “50/50” joint venture in the fourth quarter of 2011.  After three years, the two expect to save a combine 1.3 billion Euros due to economies of scale and “technology harmonization.”

The joint procurement activities include customer equipment, network equipment, service platforms and – starting with four pilot projects – IT infrastructure.  Today, the two have a non-binding term sheet which will be the basis for final contracts in the future.

DT/FT are billing this as a “new era of smart industry cooperation” and expect to get “sustained” benefits and savings to their customers and ensuring their businesses will be more competitive.

After three years, the run rate in “potential” global savings to be more than 400 million Euros and below 900 million Euros respectively for the two firms (so DT saves 400M Euros, FT, a little less than 900M Euros).

The jointly owned and operated procurement entity will have two offices in Bonn and Paris, but DT and FT are currently in talks with unions and need board approval. There’s also the tricky matter of antitrust clearance.

DT and FD did some “exploratory talks” in February 2011 to identify cooperation in radio access network sharing in Europe, WiFi roaming, equipment “harmonization” (i.e., using the same gear), M2M services, and a set of new growth business development areas.

At this rate, I’m expected some sort of “still closer” ventures down the road and it wouldn’t surprise me if the two companies tried a merger in the future.  It may sound politically insane on the one hand, but on the other hand, Europe built EADS and Airbus, so it’s not inconceivable for the two to become one…

Global Crossing is picking up Genesis for about $27 million, including covering $15 million in debt.   Genesis is described [...]]]>

The investment relations people at Global Crossing (www.globalcrossing.com) have to be crazy-busy this week.  Just before announcing its third quarter 2010 results, the company announced it was acquiring global video services provider Genesis Networks.

Global Crossing is picking up Genesis for about $27 million, including covering $15 million in debt.   Genesis is described as an “innovator in high-performance, rich-media and video-based solutions serving the world’s major broadcasters, producers, and aggregators of specialized programming.”

CEO John Legere said buying Genesis was a strategic acquisition for the company, getting it into the ability to add new and different value-added solutions for video requirements. Genesis assets includes a network stretching across 70 cities on five continents and linking international media centers through 225 on-net locations. 

Customer of Genesis comprise “some of the most recognizable broadcast and program distributors in the world, including leading sports networks, news broadcasters, sports rights holders, news agencies and international broadcasters.”  Secret sauce of the company includes its proprietary IRIS customer interface to give customers direct access and control over their global media distribution network; ther’s also a super-duper NOC in Manhattan to manage and monitor the global video network.

As for the third quarter 2010 results, Global Crossing announced consolidated revenue of $648 million, a sequential increase of 3 percent as reported, “invest and grow” revenue of $568 million, OIBDA of $109 million – a sequential increase of 17 percent as reported, and free cash flow use of $1 million, an improvement of $12 million sequentially.  Accountants will note that OIDBA and free cash flow are not GAAP (Generally Accepted Accounting Principle) measurements.

On October 21, a single rate went into effect for France telecom users, [...]]]>

About two weeks ago, France Telecom (www.francetelecom.com) moved out of a rate-zone pricing scheme and into flat-rate pricing, with landline calls made between any points within mainland France costing the same. As goes France, so will the rest of the world?

On October 21, a single rate went into effect for France telecom users, affecting seven million residential customers under the general pricing scheme.  Prices for those customers went down around 25 percent for connection charges, 58 percent on per minute rates at peak calling time and a whopping 69 percent for off-peak rates.

Call rates from an FT landline to Internet telephone number — defined as beginning with 09 7 – are now also charged as local calls.  

FT customers living in overseas areas – defined as French Guyana, Guadeloupe, Martinique, and St Martin-St Barthelemy –are also reaping savings, with reductions of about 20 percent on calls to mobiles in mainland France and proportional reductions in line with the FT reductions.

Will other phone companies follow FT’s lead into simplified pricing?  When the company introduced AMR-WB and mobile HD voice service last year, it didn’t take long for other European carriers to start talking about their plans for wideband voice.

Data point one comes from 8×8’s (www.8×8.com) annual shareholder meeting presentation on August 31, 2010.  Slide [...]]]>

While Wall Street and the mainstream media have become, well, bored of Voice over IP (yes, VoIP), two of the most financially successful companies in the space say that IP voice’s greatest potential has yet to come.

Data point one comes from 8×8’s (www.8×8.com) annual shareholder meeting presentation on August 31, 2010.  Slide 5 of the deck (data from 2008 Atlantic ACM) shows that Business VoIP is only a $1.6 billion business – with circuit-switched business voice at $40 billion.

8×8 reported that its last quarter (ending June 30, 2010) of $16.8 million was the largest quarterly revenue figure in the company’s 23 year history.  Further, 8×8 reports it has both generated net income in 10 of the last 11 quarters and increased cash and cash equivalents 11 of the last 12 quarters.

On June 30, 2010, the company had more than $18 million in cash and cash equivalents and no debit.  Topping it all off, the company repurchased nearly 500, 000 shares during the month of August and plans to buy back another $3 million shares.

Total business customers at the end of June was over 21,000; going back two year to June 2008, that number was a hair short of 12,000 – in two years through a down economy, 8×8 has nearly DOUBLED their business customer count.

Average revenue per business customer took a hit between September 2008 ($220) – when the economy went to hell – but is now currently on the upswing, between $205 and $210.

Data point two is from the “Define your Decade” folks: Metaswitch sees a big opportunity as carriers in many cases just start to migrate out of TDM to an all-IP world.    Over the next two years, the company’s expansion motto is “Going Global, going mobile.”

Metaswitch doesn’t need to rush into an IPO; it’s got enough cash and profitability to fund its expansion at a steady pace on a financially solid basis and its investors are in not in a dot.com hurry.  The company will ultimately go public, but it is not going to happen in the next 12 month is my bet.

When Metaswitch does go public, it will do so because it will need liquid stock to facilitate other mergers.  But there won’t be a lot of those, because of the company’s core values; Metaswitch will want the “right” fit in terms of supplementing/adding to its existing product lines.

Bottom line here is that there are two very financially successful companies in the VoIP space who are bullish on the IP voice future.  And their fortunes are likely to increase as 1) Businesses look for healthy firms for services and products 2) Everybody migrates to IP communications and 3) Other VoIP/IP communication firms start to lose customers due to financial woes and bad service.

One aspect of the event was apparently laying out a case for a IPO in the near future.  Most analysts I talked to felt that GENBAND had paid [...]]]>

A number of analysts I ran into last week were coming fresh from the GENBAND (www.genband.com) Perspectives Media and Analyst Summit held in Frisco Texas.

One aspect of the event was apparently laying out a case for a IPO in the near future.  Most analysts I talked to felt that GENBAND had paid a dear price in cash for Nortel’s CVAST business and now had to “recapitalize” – raise more money – in order to effectively operate moving forward.

Another reason for an IPO sooner-rather-than-later may be to clean out the vast roster of investors – 18 VC firms by my count –that have been accumulated through the company’s successive acquisitions and mergers over the past couple of years.

Overall revenue grew 18 percent in U.S. dollars, from $113.7 million to $134.5 million, with pro-forma EBDITA margins “sustained” at 20 percent.

Metaswitch says it had [...]]]>

Last week, Metaswitch Networks (www.metaswitch.com) released its unaudited (i.e. trust us) annual results for its 2009/2010 fiscal year through August 31.   Plenty of growth, EBITDA, and acquisitions.

Overall revenue grew 18 percent in U.S. dollars, from $113.7 million to $134.5 million, with pro-forma EBDITA margins “sustained” at 20 percent.

Metaswitch says it had strong growth within each carrier segment, with the fastest growing areas being Tier 1 incumbents, major carrier operators, and international markets.  Wins include more than 65 new carriers customers (In a down market, no less…), successful expansion into Latin America with customer wins including Telecom Argentina and Cooperative Mariano Moreno, cable wins/deployments including RCN and Knology, and “continued strength” in regional markets including deployments with TDS Telecom, SureWest Communications, and Cincinnati Bell.

Buying and integrating AppTrigger is also considered to be a biggie, since AppTrigger has a big global footprint, but not so much in the U.S.; there’s a lot of cross-pollination expected/happening from the merger when it comes to the Metaswitch/MetaSphere product lines expanding reach outside of the Americas to the world.

In comments reported in the Wall Street Journal, PAETEC could play the role of [...]]]>

If you haven’t been watching Rochester, New York for a while, it might be time to start. PAETEC (www.paetec.com) has signed a merger agreement to acquire privately-held Cavalier Telephone Corporation (a Metaswitch customer – next week will be interesting…).

In comments reported in the Wall Street Journal, PAETEC could play the role of a “consolidator” in buying up more fiber assets around the country – hope he reminders what happened to WorldCom.

PAETEC is paying $460 million in cash, all cash to acquire Cavalier and will add nearly 17,000 fiber route miles to PAETEC’s existing service footprint. 

When the smoke clears, the combination of the two companies would have generated $1.95 billion in revenue and $381 million in adjusted EBITDA ending on June 30 on a pro forma basis, including $30 million in expected “run rate synergies” in year two and annual thereafter.

PAETEC will get an increase of 95 percent in its collocations with a local presence in 86 of the top 100 Metro Statistical Areas and a presence in 1,178 collocations.

Cavalier’s subsidiary Intellifiber Networks has about nearly 17,000 route miles and is estimated to represent $2 billion of investment, so by that benchmark, PAETEC is getting a deal at $460 million in cash.