Alcatel and FastWeb to Develop Broadband Net for Italian Armed Forces

The Italian Ministry of Defence selected Alcatel and FastWeb to develop integrated joint-forces communications network. The initial phase will entail the deployment of an optical ring of approximately 1500 Km linking the military district headquarters along the two trunk lines of Florence-Ferrara-Padua-Milan and Rome-Grosseto-Leghorn-La Spezia. The project will be completed by the end of 2004. The contract, which was awarded on the basis of a European Union Design Contest, was valued at EUR 25 million.


FastWeb is Italy's main alternative fixed broadband telecommunications operator. As of 31-Dec-003 FastWeb had 330,000 customers. http://www.alcatel.com

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Deutsche Telekom Launches Mass Market Broadband Initiative

One day after announcing that it had topped the 4 million DSL subscriber milestone, Deutsche Telekom launched a new initiative to drive the technology as a mass-market phenomenon in Germany by attracting at least ten million T-DSL customers by 2007. The company will offer T-DSL service tiers at 1, 2, and 3 Mbps. It will also expand T-DSL infrastructure coverage in rural areas.


A key part of the initiative is to kick-start an "innovation drive," which will include pooling a considerable proportion of its research and development activities with the Technische Universität (TU) Berlin and its partner universities. To this end, Deutsche Telekom will build its own R&D institute on the campus of TU Berlin. The institute will host around 25 top Deutsche Telekom researchers as well as approximately 50 scientists from leading universities worldwide.


Deutsche Telekom is also examining the possibility of establishing joint research and development projects with France Telecom. The carriers are contemplating new collaborative efforts on both a national and European level.


Kai-Uwe Ricke, Deutsche Telekom's Chairman, said "I am very pleased that we have renewed the dialog between France Télécom and Deutsche Telekom."


Deutsche Telekom also said it welcomes greater commitment to the broadband market by other companies, such as cable network operators. Deutsche Telekom is currently reviewing its terms and conditions for line sharing and, with its new "Bitstream Access" offer, will be introducing further upstream products to stimulate the broadband market and give competitors direct and risk-free access to customers on the basis of T-DSL lines. http://www.telekom.de

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FCC Raises $118 Million in Spectrum Auction for Video Services

The FCC raised $118 million in its auction of spectrum for Multichannel Video Distribution and Data Service (MVDDS), which ended on 27-Jan-2004 after 49 rounds of bidding.


The auction included 214 geographic area licenses, of which 192 received winning bids. Each license consists of one 500 MHz block of unpaired spectrum in the 12.2 -- 12.7 GHz band. Permissible operations include any digital fixed non-broadcast service including one-way direct-to-home/office wireless service. Licensees are permitted to provide one-way video programming and data services on a non-common carrier and/or common carrier basis. Mobile and aeronautical services are not authorized. Two-way services may be provided by using other spectrum or media for the return or upstream path. Licensees are subject to a construction requirement that they provide "substantial service" in the license area within five years of receiving the license. http://www.fcc.gov/wtb/auctions/

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FCC Report: DBS Remains Cables Top Competitor

Due to competition from direct broadcast satellite (DBS), cable operators have seen their share of the U.S. market for multichannel video programming distribution ("MVPD") services decline from 100% a decade ago to about 75% today, according to the FCC's newly released "Tenth Annual Report on Competition in Video Markets." A decade ago, federal regulators expected local exchange telephone companies ("LECs") to launch video systems and become the primary competitors to cable systems. Significant LEC entry into the video marketplace has failed to materialize. The most notable exception is BellSouth, which currently operates overbuild cable systems in 14 franchise areas, passing 1.4 million homes. Nevertheless, a number of incumbent LECs are planning to offer video services over their existing phone lines. Over 100 municipal utilities have also entered the market for multichannel video. However, these competitors, along with others using more diverse delivery technologies (i.e., overbuilders, wireless cable systems, private cable systems), only serve a proportionately small number of subscribers and only in limited geographic areas. The FCC report also finds that Internet video is still not seen as a direct competitor to traditional video services. The predominant challengers to the cable operators remain the two DBS providers. Some highlights of the report:

• As of June 2003, 94.1 million households subscribed to MVPDs, an increase of more than 56% over the last ten years.



• Between June 2002 and June 2003 alone, the number of DBS subscribers grew from about 18.2 million households to more than 20.4 million households.



• The number of cable subscribers continues to grow, reaching almost 70.5 million subscribers as of June 2003, up from the 57.2 million cable subscribers at year-end 1993. In the last several years, however, cable subscribership has declined such that as of June 2003, there was approximately the same number of cable subscribers as there were at year-end 1999.



• The total number of non-cable MVPD subscribers grew from 3.1 million as of year-end 1993, to 11.23 million as of June 1998, to 23.7 million as of June .



• Between June 2002 and June 2003, cable prices rose 5.1% compared to a 2.1% increase in the overall Consumer Price Index (CPI). Concurrently with these rate increases, however, the number of video and non-video services offered increased, including a substantial increase in the number of video channels, increased use of cable (as measured by a substantial increase in cable viewership), and the addition of advanced service offerings.



• The rapid consolidation of cable operators slowed somewhat in 2003. For example, the four largest operators served about 51.7% of all U.S. cable subscribers in June 2002, and in June 2003, that number was down to about 50.5% of all U.S. cable subscribers.

http://www.fcc.gov

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Time Warner Serves 3.2 Million Cable Modems

Time Warner Cable added 182,000 cable modem customers in Q4 2003, ending the year with 3.2 million, a rise of 802,000 customers. Its cable modem penetration rate rate currently stands at 17% of eligible homes passed.


Basic cable subscribers increased at an annual rate of 0.1%. Time Warner Cable added 602,000 net digital video subscribers during 2003 (an increase of 136,000 during Q4 2003) to reach a total of 4.3 million, representing 40% of basic cable subscribers.


Meanwhile, the company's America Online division continued to lose subscribers and advertising revenue. As of 31-Dec-2004, the AOL service had 24.3 million members in the U.S., a decrease of 2.2 million for the year (a decline of 399,000 during Q4). The quarter's decline represents a decrease of 830,000 billed subscribers that was offset partially by an increase of 431,000 members in retention programs. The AOL service in Europe had nearly 6.4 million members, essentially flat with a year ago (an increase of 91,000 from September 30, 2003). Subscription revenues in the U.S. were essentially flat, reflecting a year-over-year increase in broadband subscribers, offset by a decline in US narrowband membership. http://www.timewarner.com/

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Infineon Acquires Taiwan's ADMtek for Home Gateway Silicon

Infineon Technologies agreed to acquire ADMtek Inc., a fabless, integrated circuit (IC) design company based in Hsinchu, Taiwan, for around EUR 80 million in cash. The deal enables Infineon to enter the home gateway market. Infineon will establish a new company, Infineon-ADMtek Co. Ltd, headquartered in Hsinchu, which will focus on developing broadband customer premise equipment (CPE) Ics. Infineon said it intends to offer a complete IC solution package for feature-rich, multimedia home gateways that support high-speed wireline and wireless advanced services. The deal represents Infineon's first acquisition of a controlling stake in an Asian semiconductor company.


As part of the transaction, Infineon has also signed a supply agreement to provide products to Accton Technology Corporation and its affiliate companies for broadband CPE solutions. http://www.infineon.com

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Net Insight Delivers 14-Cities Media Network in Germany

Germany's largest broadcaster, Westdeutscher Rundfunk (WDR), has chosen Net Insight's platform to carry all of its broadcast TV, data and telephony traffic between 14 cities. The project is described as the largest of its kind in Europe.


WDR's network will carry bursty IP traffic, telephony and mission critical TV contribution and distribution streams. A total of 13 services, each with strict QoS requirements, were specified for the network. The equipment will be delivered during 2004.


Net Insight said its video and data networking equipment is being used by other major broadcasters, including MSNBC, FOX, CBS, ABC, Savvis, KPN and UPC.
Thttp://www.netinsight.net

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VOOM Chooses NDS to protect HD content

VOOM, the new HDTV satellite service, and NDS, a News Corporation company, have launched a first-of-its-kind Electronic Programming Guide (EPG) built specifically for high-definition programming. VOOM is also transitioning its conditional access over to NDS's VideoGuard protection system. Using NDS's Digital Video Recorder content protection and storage technology, VOOM will also be able to offer its subscribers a secure networked DVR product that supports the safe distribution of content throughout the home. Financial terms were not disclosed.


Additionally, the collaboration will bring to market the first HDTV solution using a Motorola set-top box integrated with NDS conditional access technology.


The new agreement also builds upon an existing relationship with Cablevision whereby NDS provides conditional access solutions to many of its digital cable customers. http://www.nds.com

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Akamai Teams with Equinix on Content Delivery

Akamai Technologies is teaming with Equinix to expand its content and applications delivery platform in the U.S. and Asia. Akamai's "intelligent edge" platform for content, streaming media and applications delivery currently comprises more than 14,000 servers in more than 1,100 networks in over 70 countries. Akamai will now directly connect to networks within Equinix's Internet hubs via private cross-connects. Akamai will also utilize Equinix's GigE Exchange service in the Washington, D.C. and Silicon Valley area centers. Financial terms were not disclosed.ttp://www.equinix.comhttp://www.akamai.com

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Covad and Speakeasy offer 3.0 Mbps Consumer DSL

Speakeasy, a national broadband provider, introduced a consumer DSL service featuring maximum downstream speeds of 3.0 Mbps and upstream speeds of 768 kbps. The service is delivered over Covad Communications' national DSL network.


Speakeasy's Basic 3.0/768 residential service is offered for $69.95 per month for the first three months, $99.95 thereafter. Unlike some competitors, Speakeasy does not port block or limit bandwidth usage. Subscribers have the flexibility to run their own servers (including Linux and Macintosh); and have no restrictions on, or charges for, in-home wireless connections.


Speakeasy is also offering a "Gamers 3.0/768" package that includes at least two static IPs, 10mb of web space, eight email accounts and a year's free subscription to the Mercury FileShack gaming site. http://www.speakeasy.nethttp://www.covad.com

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Sprint Introduces Enterprise MPLS VPN

Sprint augmented its enterprise IP Virtual Private Network (VPN) services portfolio with several new offerings:

• the addition of an MPLS VPN solution to provide secure, any-to-any intranet connectivity. The Sprint MPLS VPN is a network-based solution that is compliant with the RFC 2547bis technical standard. It includes a suite of value-added features and services such as end-to-end Class of Service, VPN Multicast and Managed Network Services (MNS). Sprint provides a SLA with 100% credits for standard monthly recurring charges.



• the commercial availability of its peerless IP network, a native-IP backbone with no connectivity to the public Internet, which was previously available only to government customers.



• the availability of a Secure Socket Layer (SSL) remote access VPN to provide secure access to corporate data and applications for remote employees, business partners and customers.

Sprint said its MPLS service launch represents the initial step of a broader MPLS VPN strategy. Later this year Sprint will extend the MPLS VPN offering globally and integrate it with a full complement of value-added services, including network-based firewall and filtering, secure Internet access, integrated remote access and seamless Layer 2 internetworking. The MPLS services are implemented over Sprint's 100% Cisco Systems infrastructure. http://www.sprint.com

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Mindspeed Delivers 15% Revenue Growth

Mindspeed Technologies, a supplier of semiconductor solutions for network infrastructure applications, reported quarterly revenues of $26.7 million, up 15% from the preceding quarter and at the high end of the company's expectations set at the beginning of the quarter. There was a pro forma operating loss of $13.7 million, or $0.15 per share.


Mindspeed said revenue growth from T/E carrier transmission products, particularly DS3/E3, was primarily driven by increasing deployment of next-generation metro optical platforms. Revenue growth from multiservice access products was driven by increasing demand for VoIP, particularly from customers in the Asia-Pacific region, for use in telecommunications carrier equipment as well as for converged voice/data enterprise networks.


Mindspeed expects revenues from the current quarter to be up 10-15% sequentially yielding a revenue range of between $29.4 million and $30.8 million, the company's highest revenue level in ten quarters. The company expects overall gross margin to be roughly 68%.\http://www.mindspeed.com

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Conexant Grows Revenues 23 Percent Year over Year

Conexant Systems announced quarterly revenues of $177.3 million, up 23% over the same period last year and up 8% over the preceding quarter. Pro forma operating profit was $17.2 million, or 9.7 percent of revenues, compared to $0.5 million in the year-ago quarter. The company credited the growth to record unit shipments in its client-side ADSL, satellite set-top box and PC video businesses.


Gross margin for the first fiscal quarter was 44.6%, up approximately one percent from the previous quarter. http://www.conexant.comIn November 2003, Conexant and GlobespanVirata announced plans to merge.

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Alcatel Signs Multimillion Euro Optical Contract with Belgacom

Alcatel was awarded a multi-million EUR four year frame agreement by Belgacom to upgrade and expand its existing core and metro optical transport networks. Under the contract, Alcatel will supply its multi-service gateways and multi-service provisioning platform for delivering Ethernet and Gigabit Ethernet services. Alcatel will also supply its WDM equipment and its multi-service network element management platform. http://www.alcatel.com

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