Sprint Nextel Integration Ahead of Track, CAPEX to Increase

Sprint Nextel said that its post-merger integration efforts are ahead of prior expectations. The company increased the net present value of expected synergies from the merger to $14.5 billion. Sprint Nextel also announced plans to increase it wireless CAPEX as it accelerates the rollout of EVDO and EV-DO Revision A.


The updated synergy estimate has a net present value of $14.5 billion, inclusive of taxes and approximately $1 billion in integration costs. Synergy components include:

• $1.6 billion in revenue and subscriber synergies driven by cross-selling opportunities and improved customer retention.



• $3.7 billion in capital spending synergies due to elimination of a data overlay network for the iDEN platform, co-location of cell sites and savings from IT and billing systems, partially offset by increased investments to enhance network quality and coverage.



• $2.3 billion in network operating cost savings from lower site rent and maintenance, reduced fixed and variable access and transport costs, and elimination of duplicate staffing.



• $4.4 billion in non-network savings driven by the consolidation of IT functions, migration of billing and customer care functions and other general and administrative efficiencies.



• $3.5 billion in marketing, sales and fulfillment savings as the result of headcount savings, the rationalization of distribution channels, greater volume discounts on devices and other scale benefits.

Sprint Nextel also announced plans to increase its wireless CAPEX to be focused on additional capacity, enhanced in-building coverage and broader geographic coverage. The company now expects to spend approximately $5.6 billion on wireless and long-distance capital in 2005 plus an estimated $900 million for re-banding the iDEN network. In 2006, total wireless and long distance capital is expected be approximately $6 billion plus an estimated $1 billion for re-banding.


Sprint Nextel plans to deploy EV-DO technology to about 150 million direct pops by the first quarter of 2006 and extending this capability to all direct pops with the next version of EV-DO, called EV-DO Revision A, beginning in 2007. The company currently is providing high-speed wireless data services through the EV-DO platform in 20 metropolitan areas and this number is expected to triple by year-end. Sprint Nextel also expects to announce availability of several new EV-DO capable devices in time for the holiday-selling season.
http://www.sprint.com

• CDMA2000 1xEV-DO Rev. A is optimized for packet data service, offering peak data rates of up to 3.1 Mbps on the forward link and up to 1.8 Mbps on the reverse link. It also supports QoS for delay-sensitive applications, including a variety of IP-based services such as VoIP and real-time conversational services such as push to talk, video telephony, low-delay gaming and "instant multimedia" (an extension of push to talk that combines immediate voice with simultaneous delivery of video and pictures). Another key attribute is support for 1xEV-DO Gold Multicast, which would enable the delivery of high-quality video and audio to a large number of users simultaneously.

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openreach to Operate BT's Local Access Network

BT and Ofcom, the telecom regulatory authority in the UK, formally accepted a new regulatory framework for the local access network infrastructure operated by BT in the UK.


BT unveiled openreach, a separate operating company, that will ensure that all service providers have transparent and equal access to the local BT network. openreach, which will be operational from January 2006, will be responsible for operating and maintaining the "first mile" infrastructure that connects homes and business to BT exchanges across the UK.


BT welcomed the landmark regulatory settlement as a "defining moment" for the industry. The company predicted it would usher in a new era of investment and innovation.
http://www.btplc.com
http://www.ofcom.org.uk/media/news/2005/09/nr_20050922

• In June 2005, BT reached an agreement with Ofcom, the telecom regulatory authority in the UK, to avoid the break-up of the company and provide a long-term framework for the UK's fixed line telecommunications market. Under the agreement, BT will set-up a new - and operationally separate – business unit with a distinct new brand and identity. The new business unit will be staffed by around 30,000 employees presently responsible for the operation and development of BT's local access networks. It will have separate physical locations for management teams and separate bonus schemes with long-term incentive plans that reflect the objectives of the new business unit, not those of the BT Group plc. The new business unit will be required, through a set of formal rules on governance and separation, to support all providers' retail activities (including those of BT Retail) on a precisely equivalent basis. The new business unit will offer a universally available product and service set, including Local Loop Unbundling (LLU), shared loops (where BT Retail continues to provide voice services and another provider is responsible for broadband), Wholesale Line Rental (WLR), and Backhaul service. Equivalence of Input will also apply to IPStream - BT's wholesale internet products used by many Internet Service Providers (ISPs) to provide broadband connections for their customers.

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SunRocket Raises $25 Million to Fuel Consumer VoIP Rollout

SunRocket, a provider of consumer Internet phone service, secured $25 million in its second round of institutional financing. Mayfield Fund led the round, joined by DCM - Doll Capital Management and existing investors BlueRun Ventures and Anthem Capital Management. To date, SunRocket has raised $34 million in venture financing.


A year after launching its first services, SunRocket said it has emerged as the second fastest growing independent provider of residential Internet phone service.


SunRocket offers an all-inclusive Internet phone service with bottom-line annual price of $199, with no hidden charges, termination penalties or "gotchas."http://www.SunRocket.com

• In February 2005, SunRocket named Kevin Bennis as President and CEO. Bennis has previously served as President of MCI's Systems Integration Division, President and COO of Avantel, and as President and CEO of Sprint Canada/Call-Net Enterprises. Earlier, Bennis was the President of Frontier Communications, leading the company's $1.9 billion integrated communications business.

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Cox High Speed Internet Ranked Highest for Customer Satisfaction

Cox Communications, the third-largest U.S. cable television provider, received the highest ranking among U.S. high-speed Internet service providers in the J.D. Power and Associates' 2005 Internet Service Provider Residential Customer Satisfaction Study. This marks the first time that Cox's high-speed Internet service ranked the highest in overall customer satisfaction in the nation.


J.D. Power and Associates surveyed over 6,000 dial-up, cable and DSL high-speed Internet customers who answered questions about their service provider's performance and reliability, cost of service, billing, e-mail, customer service and image. In the high-speed segment, Cox received the top scores in customer service, performance and reliability and the highest ranking in customer satisfaction overall.


Cox noted that 7 out of 10 broadband consumers in Cox markets choose its cable modem service over DSL.
http://www.cox.com

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VeriSign Develops Wireless IP Connect Service Bridging Mobile and WiFi Networks

VeriSign is introducing a "Wireless IP Connect Service" providing a single, cellular-WiFi interconnection point that resolves interoperability issues between disparate networks and facilitates the delivery of end-to-end, next-generation features. The service allows cellular handsets to register as IP devices when near a Wi-Fi signal, thus enabling consumer to make and receive cost-effective VoIP calls.


Net2Phone is launching a trial of the service that is expected to run through the end of the year.
http://www.verisign.com

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Level 3 Signs Network Agreement With Renater

Renater, a Paris-based operator of academic research networks, awarded a three-year agreement to Level 3's European operating subsidiaries to provide intercity dark fibre and colocation services. The Level 3 network will support the Renater 4 project, an upgrade to Renater's existing network infrastructure. The Level 3 fibre will connect the markets of Paris, Nancy and Strasbourg. Financial terms were not disclosed.


Founded in 1991, Renater is the French national network for research, education and technology. Its network backbone links regional networks across 20 regions in France and also provides international connectivity. The Renater network uses the TEN-34 network to connect to other National Research Networks (NRNs) including DFN, JANET, SWITCH and CERN.


Renater also has a 10 Gbps link to the next-generation Europe-wide GEANT2 network. GEANT2 is operated by Delivery of Advanced Network Technology to Europe (DANTE), a non-profit organisation based in the United Kingdom that plans, builds and operates high-bandwidth networks for universities and other research organisations. Level 3 also serves as a dark fiber and colocation provider to DANTE for GEANT2, which will serve more than three million users across 34 countries.
http://www.level3.com/

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Ikanos Announces Pricing of Pending IPO

Ikanos Communications, a developer of VDSL2 silicon, priced its initial public offering of 6,400,000 shares of common stock at a public offering price of $12.00 per share, which will result in estimated net proceeds to Ikanos Communications of approximately $69 million. http://www.ikanos.com/

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MergeOptics Announces 10 Gbps Ethernet XPAK Modules

MergeOptics GmbH announced the availability of the XPAK SR and XPAK LR small form factor modules. The new 10 Gbps Ethernet modules are capable of supporting new levels of port density in high volume server-to-switch and storage-to-switch links. Both products are in production and readily available.


The 10Gbps XPAK SR and LR modules follow the multi-source agreement (MSA) for XPAK, which was initially introduced in 2002. The XPAK design is a small form factor, power efficient module that easily integrates into network equipment enabling standards based 10G/bit links. The XPAK SR modules are capable of transmitting over distances up to 82m (50micron) in Multi-mode Fiber (MMF) or up to 300m over new high bandwidth MMF. The XPAK LR module is specifically designed for Single Mode Fiber (SMF) links up to 10Km. The XPAK modules' characteristic small form factor, low profile size makes them fully compatible with PCI card applications such as 10 G/bit Ethernet and 10 G/bit Fibre Channel network interface cards (NICs).
http://www.mergeoptics.com/

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CLECs Call for Merger Conditions on SBC/AT&T and Verizon/MCI

Eight competitive telecom service providers submitted a petition calling on the FCC to impose strict conditions on the pending mergers of SBC/AT&T and Verizon/MCI in order to safeguard competition. The companies said the divestitures of AT&T's and MCI's local network assets would not be enough to alleviate the harms to the local wholesale market.

Companies endorsing the comprehensive remedies were Broadview, BridgeCom, Conversent, Eschelon Telecom, NuVox, TDS Metrocom, Xspedius and XO Communications.

The companies proposed the following pricing, performance and other remedies:

• Require Local Wholesale Prices to Reflect Pre-Merger Conditions. A Merger Order must ensure that local wholesale circuits are priced at the lowest pre-merger rates and include the same terms and conditions. For telecom providers, special access rates should be reinitialized at 11.25%, or determined by commercial negotiations with a requirement that "baseball arbitration" be used if the negotiations fail- with winners determined by bids that most closely approximate the lowest pre-merger rate.



• Ensure Unbundled Network Elements (UNEs) and Freeze Rates. UNEs are the other alternative means of access for facilities-based competitive providers. Current access to UNEs and rates must be continued. Any Merger Order should prohibit any further delisting of UNEs and freeze the associated rates of such UNEs for a period of five years.



• Recalculate the Triennial Review Wire Center Test by Eliminating AT&T and MCI as Fiber-Based Collocators. The current collocation requirement in the Wire Center List is based on the presence of actual competition, which will disappear when AT&T and MCI cease to be independent competitors. Because the FCC's TRRO earlier this year took into account AT&T and MCI as independent companies, Merger Orders must require a recalculation of the Wire Center List for de-listed UNEs, removing AT&T and MCI.


"Fresh Look" - Give AT&T and MCI Customers the Right to Exit Contracts.
The companies cited a recent University of Connecticut survey of Fortune 1000 businesses that concluded that by a 2 to 1 margin, the telecom managers in these companies believe they will be harmed by these mergers. Therefore, these business customers that are losing AT&T and MCI as their longstanding providers should be allowed to cancel contracts that carry over to the merged companies without incurring termination penalties.


• Eliminate the DS1 Loop and Transport Caps. When establishing these caps, the FCC relied on the availability of competitive facilities, something that will be greatly reduced when AT&T and MCI cease to be independent competitors.

Doug Kinkoph, XO Communications Vice President of Regulatory Affairs, said, "Because the harms of the proposed mergers are severe, the conditions on these mergers must be comprehensive and ensure that all customers of AT&T and MCI are no worse off should the government approve them."http://www.xo.com/

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Verizon FiOS TV Announces its Channel Line-Up

The Verizon FiOS TV service, which is being introduced in the town of Keller, Texas, features more than 330 total channels at launch -- including 20 HD channels theater-quality sound. Verizon initially has 600 video-on-demand titles in its content library and expects to have 1,800 by year-end.
http://www.verizon.com

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Vonage Provides TCS VoIP Verify Feature

Vonage is the first VoIP service provider to use TCS' recently introduced "VoIP Verify" service, which allows subscribers to check the availability and extent of emergency services coverage from the caller's current registered location. When Vonage customers dial 9-3-3 from their Vonage service, VoIP Verify informs the user how his or her distress call will be routed, and what information the Vonage user should be prepared to provide to the emergency services call taker.
http://www.vonage.com

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PanAmSat Forms Emergency Response Team

PanAmSat has formed an Emergency Response Team (ERT) focused on quickly restoring lifeline telecommunication services to government agencies and private industry affected by natural and man-made disasters.


Using PanAmSat's extensive satellite fleet and a range of on-the-ground transmission and support systems, PanAmSat can quickly restore crucial communication services even when terrestrial network alternatives are unavailable.


PanAmSat's Emergency Response Team will deliver everything from satellite telephones to transportable and fixed transmission facilities to quickly bring communications online for voice, video, internet and routed IP services -- typically in less than 24 hours.


The ERT will be dispatched from PanAmSat's Customer Service Center in Ellenwood, Georgia. Customer service technicians will be available 24 x 7 x 365.


In advance of Hurricane Rita, the company has assembled extra teams across its U.S. facilities. It also has dispatched advance support teams to the Gulf Coast to provide on-the-spot support.
http://www.panamsat.com

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Intel Launches Asian WiMAX Campaign

Intel is launching a WiMAX deployment campaign in Southeast Asian. The company will work will work with governments, telecommunications regulators, education, health and agriculture public sector agencies and carriers, True Corporation in Thailand and Telekom Malaysia among them, to help them prepare for and conduct WiMAX trials. The trials will test connectivity among key public and private sector groups.


As part of Intel's Digital ASEAN (d-ASEAN) vision of an integrated region of connected villages, provinces, cities and countries, Intel is helping to begin WiMAX trials in Malaysia, Thailand and the Philippines by the end of 2005. Trials in Indonesia and Vietnam are expected to take place in 2006. http://www.intel.com

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