Merrill Lynch Selects Avaya for Corporate VoIP Network

Merrill Lynch selected Avaya IP telephony solutions for its three-year-old corporate campus in Hopewell, New Jersey and its new regional headquarters building in Tokyo, Japan. The deployment will include Avaya Communication Manager IP telephony software and Avaya Media Servers. Merrill Lynch will use a mix of IP and digital handsets to serve its 5800 employees in New Jersey and 1800 employees in Japan -- routing IP calls over its data network and digital calls over its new voice network. Financial terms were not disclosed.
http://www.avaya.com

• Merrill Lynch had previously been using thousands of Cisco IP phones in its network.

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AFC Reports Revenue of $83 Million

Advanced Fibre Communications (AFC) announced Q2 revenue of $83.0 million on a GAAP basis, compared with $80.5 million in the preceding quarter and $86.3 million for Q2 2002. Net income for Q2 2003 was $3.3 million, or $0.04 per share, compared with $8.3 million, or $0.10 per share, in Q1 2003. ALLTEL and Sprint were each 10% customers in the quarter. AFC said service providers will remain cautious about spending in the near term, but that investment in the access network will be a key focus for carriers in the future as they roll out DSL and Fiber to the Premise (FTTP).
http://www.afc.com

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Avaya Reports Relatively Flat Quarterly Revenue of $1.072 billion

Avaya reported quarterly revenue of $1.072 billion, slightly below revenue of $1.081 billion for the preceding quarter. The company reported net income of $8 million and earnings per diluted share of $0.02 per share. Avaya noted its cash balance increased for the fourth straight quarter to $843 million. Net debt decreased to $150 million and is at the lowest level it has been since the company became an independent business.
http://www.avaya.com

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Nortel Networks Sees Revenue Decline 3% from Q1

Citing cautious spending by service providers, Nortel Networks reported quarterly revenue of US$2.33 billion, down sequentially approximately 3%. This compares to US$2.77 billion in revenue for Q2 2002. There was a net loss in the second quarter of 2003 of US$14 million, or US$0.00 per common share, compared to net earnings of US$54 million, or US$0.01 per common share, in Q1 2003. Some highlights:

• Compared to Q1 2003, Wireless Networks revenues increased 4%, Enterprise Networks revenues decreased 11%, Wireline Networks revenues decreased 12% and Optical Networks revenues increased 10%.
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  Compared to Q1 2003, sales in the US decreased 5%, the Europe, Middle East and Africa region (EMEA) decreased 9%, Canada increased 6% and Other areas increased 10%.
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  Gross margin was 43.7% of sales in Q2 2003, up from 42.9% in Q1 2003, and 34.5% in the second quarter of 2002.

http://www.nortelnetworks.com

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Universal Access Closes $16 Million Investment

Universal Access Global Holdings, a communications and network integrator based in Chicago, received a $16 million equity investment from CityNet Telecommunications, a carrier that has pioneered deployment of last-mile fiber optic networks through in-city sewer systems. Under the deal, CityNet has invested $16 million in cash in Universal Access. CityNet has also contributed fiber optic network assets in exchange for a 55% fully-diluted stake in Universal Access. CityNet originally funded $5 million of its total investment in April in the form of secured debt, which was repaid as part of this transaction.


Separately, Universal Access announced that Randall Lay has been appointed as CEO. Lay previously served as the company's COO.
http://www.universalaccess.nethttp://www.citynettelecom.com

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Level 3 Sees General Price Stability Trend, Positions for Upturn

Level 3 Communications reported Q2 revenue of $941 million compared to $1.23 billion for the previous quarter, which excludes $17 million and $20 million of revenue, respectively, from Software Spectrum's contact services business which is included in discontinued operations. Level 3's Q1 figures also reflected one-time settlement revenues. The net loss for Q2 was $0.95 per share, or $462 million. This includes a $190 million charge associated with the premium that was paid for the full conversion of the company's 9% Junior Convertible Subordinated Notes due 2012. Level 3 noted the communications revenue was slightly ahead of its expectations. The company said it was continuing to make steady progress in the integration of Genuity, however sales cycles were longer than expected. Some other highlights:

• Pricing for circuits at OC-3 and below has remained stable; however there is a lot of price competition for higher speed circuits
• 
  
  IP price compression also continues, especially in larger deals
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  Level 3's sales of wavelength IRUs increased in Q2. Prospects for metro IRUs are good, especially for MSOs
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  Level 3's colocation business grew slightly in the quarter, pricing is stable, and the market is in turmoil due to Sprint and C&W exiting from this segment
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  Level 3's softswitch business also remains stable, although price declines are expected as major contracts across the industry come up for renewal. Traffic volumes for Level 3's managed modem service averaged about 29 billion minutes per month, down 14% from Q1 due to seasonality.
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  Level 3 is developing plans for a hosted PBX service sold through channel partners. The service would be based on a platform acquired through Telverse. The IP PBX service would be aimed at small to mid-size businesses and connected via private line, DSL or cable modem.
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  Level 3's top ten customer list (alphabetical order) includes AOL, Cable & Wireless, Calpoint, Earthlink, France Telecom, Microsoft, SBC, United Online, Verizon and 360networks. These companies account for 54% of Level 3's communications revenues.
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  In a conference call, the company said its Q2 EBITDA margins of 26% compare favorably with the Q1 EBITBA margins of AT&T at 26%, Sprint at 18%, MCI at 10%, WilTel at 0% and Global Crossing at -2%.
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  The company will continue to consider acquisitions to add customer traffic to its network.

http://www.level3.com

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Kabira Enhances Messaging Gateway New Services

Kabira Technologies released commercial grade enhancements for its Convergent Message Gateway that enables customizable business rules for services, rapid service deployment, intelligent push for messages, network initiated messaging, and very-high volumes exceeding thousands of messages per second. Kabira's platform serves as a mobile message gateway supporting MMS and packet message services. Kabira said examples of new messaging services include buddy-list messaging; mobile gaming; photo, music and video-clip downloads; location aware messages; corporate campus messaging; value-add news alerts; urgent email alerts; enterprise and web portal wireless content and services; and other new mobile services based upon either push content, pull content or smart content.
http://www.kabira.com

• Kabira's Mobile Messaging Gateway supports MMS and packet message services.

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AOL Names New CTO

America Online named John McKinley as its new Chief Technology Officer (CTO) and President, AOL Technologies. He will serve as the company's chief technology strategist as it moves into areas like broadband, wireless and premium services. In addition to technology strategy, McKinley will also oversee the teams in charge of product engineering, network infrastructure and data centers, and internal business systems and computing. McKinley previously was CTO for Merrill Lynch and GE Capital.
http://www.aol.com

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CableLabs Issues More DOCSIS Certifications

CableLabs certified four more DOCSIS 2.0 cable modems from Terayon, Texas Instruments and Thomson. There are now 22 cable modems with DOCSIS 2.0 certification.


CableLabs also announced that eight companies gained certified status for DOCSIS 1.1 products and two companies gained DOCSIS 1.0 certification. Two companies obtained DOCSIS 1.1 qualified status for headend equipment.
http://www.cablelabs.com

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AT&T Reports Revenue of $8.8 Billion, Down 8.2% from Q2 2002

Despite an overall weak telecom market, AT&T said it continues to take market share and outpace its competitors for high-end enterprise communications. The company's continued focus on cost management yielded significant free cash flow of $1.4 billion for Q2. AT&T plans to further reduce its overall debt, increase its dividend to shareholders, and continue to out-invest its competitors in building the network of the future, an all-IP, seamless global network. Highlights of the financial report include:

• Q2 revenue of $8.8 billion, which included $6.4 billion from AT&T Business Services and $2.4 billion from AT&T Consumer Services. The total is down 8.2% compared to Q2 2002, which the company attributed to continued declines in long distance voice revenue, partially offset by the continued success of AT&T Consumer Services' bundled local and LD offering, as well as growth in several key markets of AT&T Business Services. Reported income was $536 million and earnings per diluted share were $0.68.
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  CAPEX in Q2 was $790 million. Spending is being directed to improving the overall customer experience
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  net debt at the end of Q2 was $10.8 billion, down $1.2 billion from Q1 2003
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  by the end of the year, AT&T expects its employee headcount will be down 9% compared to the end of 2002

AT&T Business Services:

• Revenue was $6.4 billion, a decline of 5% from the prior year second quarter.
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  Long distance voice revenue declined 11% on a quarter-over-quarter basis, while traffic volumes grew 12%
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  Local voice revenue grew approximately 39% from the prior year second quarter. Local access lines totaled over 4.2 million at the end of the current period, representing an increase of nearly 135,000 lines from Q1 2003.

AT&T Consumer Services:

• Revenue was $2.4 billion, a decline of 18% percent versus the prior year second quarter
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  Operating income totaled $489 million, yielding an operating margin of 20.6%
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  At the end of Q2 2003, there were 3.1 million local access customers in 12 markets across the U.S. The company plans to serve 22 local markets by the end of 2003.

http://www.att.com

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Service Bundling Slows UNE-P Losses at SBC

SBC Communications reported record net adds in both long distance and DSL service for Q2, however overall revenues declined, margins for voice services were down and the overall number of local access lines in service continued to fall. SBC credited service bundling, especially its promotion of unlimited, all-distance calling plans, for a 37% sequential decline in UNE-P line losses to competitors. Q2 revenues totaled $10.2 billion, compared with $10.8 billion in the year-ago period. Reported earnings per diluted share were $0.42, compared with $0.53 in the year-ago quarter (excluding Cingular Wireless). Highlights of the quarter include:

• added 2.3 million long distance lines, up 54% compared to its net gain in Q1. In July, SBC passed the 10 million mark for long distance lines, up 65% since the beginning of the year. More than one million consumers have subscribed to the all-distance, unlimited calling bundle.
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  Added 304,000 DSL lines, bringing its total to 2.8 million. Q2 was the best quarter to date for DSL subscriber gain. DSL revenues and subscriber totals are up 60% compared to this time last year. SBC's DSL penetration rate nationally for locations passed is 9%. In California, SBC's DSL penetration is 12% of locations passed. About 66% of SBC's access lines are now DSL eligible.
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  Data revenues in Q2 were up 2.7% compared to Q2 2002 and up 0.5% sequentially. High-cap revenues declined 3.5% year-over-year. Data revenues now represent 27% of SBC's overall wireline revenues.
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  31% of SBC's residential customers subscribed to a service bundle with more than one key service (local access line, long distance, DSL or wireless).
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  Reduced total debt, net of cash, by $2.0 billion during the quarter and by $11.9 billion, or 47%, from the end of the second quarter of 2002. Total debt net of cash at the end of the second quarter was $13.4 billion.
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  SBC's out-of-region ATM backbone expansion was completed in June.
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  40,000 net adds at Cingular Wireless, nearly triple the first-quarter total.
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  the new Echostar alliance is expected to deliver significantly greater value to the service bundles, without major investment from SBC.

http://www.sbc.com

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