France Telecom Reaches 8.5 Million DSL Users, 306,000 IPTV Customers

Citing very rapid growth in consumer DSL services, France Telecom Group reported revenue of EUR 25.86 billion to 30-June-2006, representing a growth of 9.3% on an historical basis and 1.4% on a comparable basis. The gross operating margin was 9.47 billion EURs. Some highlights:

• The total number of customers served by France Telecom companies reached 88.7 million, up by 32.8% year-over-year on a historical basis and 14.8% on a comparable basis.



• Traditional fixed line services and narrowband services continue to decline. Total revenue from fixed line fell 16% on a comparable basis, reflecting cuts in the tariffs for fixed-to-mobile calls and a drop in the total volume of telephone traffic.



• The number of consumer ADSL Broadband accesses totaled 8.5 million in Europe, up by 39% in a year. In the first half of 2006, 1.1 million new users were added. France Telecom's own Home service was serving 5.2 million retail ADSL customers at the end of the quarter.



• The number of wholesale broadband Livebox gateways surged to 2.9 million, up from 716,000 a year earlier.



• The number of VoIP customers grew by nearly 80% in six months to a total of 1.73 million as of 30-June-2006.



• There were 306,000 subscribers to the ADSL digital television service in France



• CAPEX to revenue ratio maintained at 11.8% (compared with 11.5% on an historical basis and 11.6% on a comparable basis) with CAPEX of EUR 3.06 billion.



• Net financial debt amounted to EUR 47.234 billion, down from EUR 47.846 at 31-Dec-2005, a reduction of EUR 612 million.



• Revenues from Orange France were EUR 4.823 billion, an increase of 2% on a comparable basis and 1.8% on a historical basis.

http://www.francetelecom.com

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Alcatel Post Q2 Revenue of EUR 3.4 Billion, up 7.6%

Alcatel reported Q2 revenue of EUR 3,384 million, up 7.6% year-over-year. Operating profit was EUR 263 million, a 7.8% operating margin
and net income (group share) was EUR 180 million, representing earnings per share or EUR 0.13.



Some highlights:

• During Q2, Alcatel shipped a record 6.7 million DSL lines



• Q2 gross margin was 33.6%, down from 35.6% a year earlier.



• The IP data business once again recorded significant growth, with new contract wins in the U.S., Denmark, Spain, Venezuela, Malaysia and Thailand. In addition to the strong momentum in IP service routing, the MSWAN activity continued to reflect sustained demand for ATM-based DSL aggregation and for 3G RAN (Radio Access Network) aggregation.



• Revenues grew significantly in the NGN/IMS activity, more than doubling in the first half of the year compared to 2005, with good traction at incumbent operators in Europe and Asia. The business now has more than 90 customers.



• A major win in the Enterprise fixed mobile convergence was awarded this quarter with a tier-1 operator in the UK.



• The traditional TDM voice activity continued to decline as expected during the quarter, however, some of this decrease was offset by maintenance/services revenue, which now accounts for a significant portion of the business.

Segment Breakdown	Second Qtr	Second Qtr	First Qtr
In EUR million	2006	2005	2006
Revenues
Fixed Communications	1,363	1,224	1,273
Mobile Communications	1,007	958	908
Private Communications	1,034	981	905
Other & Eliminations	(20)	(18)	(19)
Total	3,384	3,145	3,067
Income from Operations
Fixed Communications	133	120	110
Mobile Communications	80	115	57
Private Communications	51	59	48
Other & Eliminations	(1)	(31)	(17)
Total	263	263	198

"While preparing for the merger with Lucent Technologies and the Thales transaction, Alcatel achieved good revenue growth in the second quarter, above market rate. Our strong performance in the wireline segment confirmed Alcatel's leading position in the network transformation to an all-IP infrastructure to support triple play services. We are particularly pleased with the resulting 4-fold year over year revenue increase in IP routing and aggregation as well as our strong position in the DSL and fiber access markets."http://www.alcatel.com

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RadiSys to Acquire Convedia

RadiSys agreed to acquire privately-held Convedia Corporation, a leader in IP media processing technologies and IP Media Server products, for $105 million in cash, subject to certain adjustments, plus an earnout of up to $10 million if Convedia achieves certain profitability goals over the next year.



Convedia claims over 200 customers worldwide, including 25 of the top 50 global telecommunication service providers, and many Fortune 500 and enterprise customers. Convedia's family of media servers enable fixed, mobile and cable service providers to deliver processed media streams for IMS and pre-IMS services. Convedia media servers also support media-rich applications and services on converged enterprise networks. In addition, Convedia's eXMP technology delivers a common set of IP media processing features, control and management interfaces, and can be deployed on third-party Linux-based servers, embedded in third-party proprietary platforms such as routers, switches, and gateways and deployed on purpose-built, highly-optimized IP Media Server platforms. Convedia is headquartered in Vancouver, Canada.



RadiSys is a leading provider of advanced embedded solutions for the communications networking and commercial systems markets. The company helps OEMs bring better products to market faster and more economically. Its products include embedded boards, platforms and systems. RadiSys is headquartered in Hillsboro, Oregon.



RadiSys said the acquisition would accelerate its penetration of the VoIP equipment and IMS infrastructure markets as well as accelerate its strategy to provide turnkey networking platforms. Convedia's full family of media servers will continue to be developed and enhanced under the RadiSys corporate brand. In addition, the two companies will leverage Convedia's eXMP (eXtended Media Processing), software technology to operate on RadiSys' ATCA platform.

http://www.radisys.comhttp://www.convedia.com

• In April 2006, Convedia extended its line of media servers with two new products - the CMS-3000 and CMS-9000 Media Servers, both based on a new eXtended Media Processing (eXMP) technology, which is a modular, portable technology that represents the evolution of Convedia's carrier-class media processing expertise and is designed for a range of media processing needs.

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Time Warner Telecom to Acquire Xspedius for Metro Fiber in 75 Markets

Time Warner Telecom agreed to acquire Xspedius Communications, a privately held company which provides telecommunications services to businesses across the U.S., $531.5 million, consisting of $212.5 million in cash and $319 million in shares of Time Warner Telecom's Class A Common Stock.



Xspedius is a metro fiber-based provider of integrated communications services primarily to enterprise businesses as well as carrier customers. Its services include metro Ethernet, local and long distance voice, data and dedicated Internet access services, in 43 markets across 18 states and the District of Columbia.

http://www.twtelecom.comhttp://www.xspedius.com

• Xspedius was created through the consolidation of several telecommunications companies. The initial footprint consisted of 6 facility based cities - Lake Charles, Baton Rouge, Lafayette, Memphis, Nashville and Greensboro/Winston Salem.



• In August 2002, Xspedius purchased substantially all of the assets of Virginia-based e.spire Communications, adding 3,500 total route miles of fiber, over 600 On-Net buildings and over 150 collocated end offices.



• In January 2003, Xspedius acquired Mpower Communications' Texas assets added more than 7,000 customers and more than 60 collocated end offices in the Dallas/Fort Worth, Houston, Austin and San Antonio markets.



• In April, 2005, Xspedius purchased the business and assets of ICG Communications Inc. in five markets across the Southeast, adding another 194 buildings and 500 more fiber miles to its network.

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InterCall to Deploy Convedia Media Servers

InterCall, a subsidiary of West Corporation and a leading provider of outsourced communication solutions, will deploy Convedia's CMS-6000 and CMS-1000 Media Servers. West Corporation is an established leader in customer contact services and offers a suite of integrated communication services to Fortune 1000 companies.



Advanced reservationless conferencing and collaboration services developed by West Corporation's application development teams will use Session Initiation Protocol (SIP) and Media Server Markup Language (MSML) protocols to integrate and control Convedia media servers, which will provide audio bridging, transcoding, and personalized multimedia mixing capabilities, with superior economics compared to existing TDM-based audio conferencing equipment.



The initial West/InterCall purchase will secure a supply of Convedia media servers for development labs and new business growth, while additional procurements are being planned to upgrade the existing conferencing bridge infrastructure with an IP-based infrastructure built around a network of Convedia media servers. Financial terms were not disclosed.

http://www.convedia.com

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Conexant Posts Revenue of $251.6 million, up 27%

Conexant Systems reported revenues of $251.6 million for its third fiscal quarter of 2006, which ended 30-June-2006. up 3.7 percent from second quarter fiscal 2006 revenues of $242.6 million, in line with prior expectations of a 3 to 5 percent sequential increase and up 27.4 percent from $197.5 million in the third quarter of fiscal 2005. Core gross margins in the third quarter of fiscal 2006 increased to 45.2 percent of revenues, up 170 basis points from 43.5 percent in the immediate-prior quarter and above prior expectations of approximately 44 percent.



Core operating income in the third quarter of fiscal 2006 was $25.5 million, a sequential increase of 31.7 percent from second quarter fiscal 2006 core operating income of $19.3 million and above prior expectations for a sequential improvement of approximately 15 percent.



"In our third fiscal quarter, we once again exceeded our overall performance expectations," said Dwight W. Decker, Conexant chairman and chief executive officer. "Most importantly, we delivered on our highest-priority goal, established 18 months ago, which was to return to double-digit core operating margins before the end of calendar 2006.

http://www.conexant.com

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Tellabs Reports Revenue of $549 million, up 19%

Tellabs reported Q2 revenue of $549 million, up 19% from $463 million in the second quarter of 2005. On a GAAP basis, Tellabs earned $54 million or 12 cents per share in the second quarter of 2006, up 30% from $41 million or 9 cents per share in the second quarter of 2005.



Broadband -- Revenue from the broadband segment totaled $298 million, up 20% from $248 million in the second quarter of 2005. Within the broadband segment, access revenue rose 32% to a record $190 million from $143 million in the second quarter of 2005. Managed access revenue fell 10% to $86 million from $96 million a year ago. Broadband data revenue more than doubled to $22 million from $9 million in the second quarter of 2005.



Transport -- Revenue from the transport segment totaled $202 million, up 19% from $170 million in the second quarter of 2005, driven by demand from wireless customers.



Services -- Services revenue was $49 million, up 8% from $45 million in the second quarter of 2005.

http://www.tellabs.com

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Comcast Reports Surging Demand for Digital Services

Comcast reported record quarterly results, driven by surging consumer demand for new digital features including ON DEMAND, digital video recorders (DVR) and HDTV programming.



Some highlights:

• Comcast added 305,000 high-speed Internet subscribers during the quarter. High-Speed Internet revenues increased 22% to $1.2 billion in the second quarter of 2006, reflecting a 1.6 million or 20% increase in subscribers from the prior year and stable average monthly revenue per subscriber. Comcast ended the second quarter of 2006 with 9.3 million high-speed Internet subscribers or 22% penetration of available homes.



• Video revenue increased 8% to $3.7 billion in the second quarter of 2006, reflecting growth in digital customers and increased demand for more digital and interactive features. Comcast ended the quarter with 10.5 million digital video subscribers, a 15% increase from one year ago. Basic video subscribers declined 0.1% or 66,000 subscribers during the second quarter of 2006 compared to a decline of 79,000 subscribers and 96,000 in the second quarters of 2005 and 2004, respectively. Comcast had 21.7 million basic cable subscribers as of June 30, 2006.



• Driven by ON DEMAND movie and event purchases, pay-per-view revenues increased 30% in the second quarter of 2006 from the same time in 2005.



• High-Speed Internet revenues increased 22% to $1.2 billion in the second quarter of 2006, reflecting a 1.6 million or 20% increase in subscribers from the prior year and stable average monthly revenue per subscriber. Comcast ended the second quarter of 2006 with 9.3 million high-speed Internet subscribers or 22% penetration of available homes.



• Comcast added 306,000 VoIP-based Comcast Digital Voice (CDV) customers during the quarter. Phone revenue increased 23% to $214 million reflecting a $67 million increase in CDV revenues as a result of the significant increase in CDV subscribers, offset by a $27 million decline in circuit-switched phone revenue. Comcast ended the second quarter of 2006 with a total of 1.7 million phone customers. Customer additions in the second quarter of 2006 include 306,000 new CDV customers offset by the loss of 79,000 circuit-switched customers.



• Capital expenditures were $965 million in Q2 remained relatively unchanged when compared to one year ago.



• Cable revenue increased 11% to $5.9 billion in the second quarter of 2006 reflecting strong growth in each of our services driven by record setting RGU additions. Revenue generating units (RGUs)(3) increased 816,000 in the second quarter of 2006, a 61% increase from the prior year. Comcast ended the second quarter of 2006 with 43.2 million RGUs, an increase of 3.3 million units from one year ago
  

http://www.comcast.com

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Nokia Launches Public UMA Pilot in Finland

Nokia has launched a public Unlicensed Mobile Access pilot over Wireless LAN in the city of Oulu, Finland. The trial, which is slated to last at least two months, tracks 50 families that have been supplied with Nokia 6136 mobile devices with UMA capabilities.



UMA technology makes it possible for users to seamlessly roam and handover between local area networks and wide area networks using the same dual-mode device. Instead of constantly communicating with a base station, UMA allows the phone to also make calls through WLAN internet networks. In turn, this will also make it easier and cheaper for operators to expand their area coverage by implementing WLAN hotspots instead of base stations.



The pilot project is a joint cooperation between Nokia, the DNA/Finnet group and the City of Oulu. The City of Oulu announced the Pan Oulu project last year which enables its citizens to receive free WLAN internet via hotspots around the city. http://www.nokia.com

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BellSouth to Market TiVo DVRs to DSL Customers

BellSouth will co-market the stand-alone TiVo Series2 box and service in conjunction with BellSouth FastAccess DSL.



Through the agreement with TiVo, select BellSouth FastAccess DSL subscribers will receive special pricing on the TiVo box and service. These customers can further enhance their already reliable, high-speed Internet service with TiVo's broadband applications, including online scheduling, TiVoToGo transfers, TiVo Guru Guide recommendations, streaming radio, movie browsing, and TiVo's easy-to-use Home Media features.

http://www.bellsouth.com

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BT Reaches 8.7 Million Broadband Users

BT reported quarterly revenue of 4,864 million pounds Sterling, up 3 percent, a profit of 639 million pounds, up 24 percent, and earnings per share 5.8 pence, up 26 percent over last year, before special items. Revenue has now increased for ten consecutive quarters. Some highlights from the quarter:

• BT had 8.7 million wholesale broadband connections at June 30, 2006, including 580,000 local loop unbundled lines, an increase of 2.9 million connections year on year and 535,000 connections in the quarter. The definition of broadband connections has been adjusted to include BT own use and test lines as sourced from equivalent BT Wholesale systems on which a data cleanse has also been performed and the statistics above are quoted on a consistent basis. Over 40 per cent of all UK homes now subscribe to broadband services.



• Growth in new wave revenue continued and at 1,641 million pounds was 18 percent higher than last year. New wave revenue accounted for 34 per cent of the group's revenue compared to 29 percent in the first quarter of last year. New wave revenue is mainly generated from networked IT services, broadband and mobility.



• Networked IT services revenue grew by 9 per cent to 981 million pounds, broadband revenue increased by 45 per cent to 454 million pounds and mobility revenue increased by 8 per cent to 71 million pounds.



• The 12 month rolling average revenue per consumer household (net of mobile termination charges) of 253 pounds increased by 2 pounds compared to last quarter, the second successive quarter of growth.

http://www.btplc.com

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NETGEAR to Acquire SkipJam for Home Entertainment and Control

NETGEAR agreed to acquire SkipJam Corp., a developer of software for home entertainment and control, for $9 million in cash.



SkipJam was founded in 2002 and is based in Port Chester, New York. Upon close of the acquisition, SkipJam's engineering team will be integrated into the NETGEAR engineering organization with Michael Spilo, CEO of SkipJam, becoming NETGEAR's VP of Engineering for Multimedia Products.



SkipJam's technology will form the basis of future NETGEAR multimedia products, including media centers, media players, and audio players, builds upon NETGEAR's first generation of digital home entertainment products, and complements NETGEAR's high-speed, extended range home network infrastructure solutions such as RangeMax Next draft 802.11n wireless and 200 Mbps HD Powerline that enable simultaneous streaming of multiple HD quality videos, and devices like NETGEAR's Storage Central that store digital entertainment files.



"As more and more entertainment content is digitally distributed over the Internet, the market for networked entertainment devices is growing," said Patrick Lo, Chairman and CEO of NETGEAR. "With the availability of high- speed, extended range home network infrastructure solutions such as NETGEAR's RangeMax Next draft 802.11n wireless and 200 Mbps HD Powerline, streaming multiple HD quality videos simultaneously across the network is now a reality. SkipJam has the unique software technology to become the platform for us to build out our multimedia product portfolio and continue expanding worldwide in the growing category of digital home entertainment and control."http://www.netgear.com

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NEC, Matsushita and TI form Joint Venture for 3G/3.5G

NEC, NEC Electronics Corp., Matsushita, Panasonic Mobile Communications and Texas Instruments will establish a new joint venture company to conduct global development, design, and technology licensing for a hardware and software communications platform to manage the core communications functions for mobile handsets for 3G/3.5G and beyond.



The new company, Adcore-Tech, will be based in Yokosuka, Japan and have 180 employees initially. The five companies will jointly invest 12.0 billion yen in the new joint venture, with approximately 44 percent held jointly by NEC and NEC Electronics, approximately 44 percent held jointly by Matsushita and Panasonic Mobile, and approximately 12 percent held by Texas Instruments. http://www.necel.comhttp://panasonic.net

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XM Satellite Radio Surpasses 7 Million Subscribers

XM Satellite Radio has passed the 7 million subscriber mark.

http://www.xmradio.com

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Verizon Selects Alcatel, Motorola and Tellabs for GPON

Verizon has selected Alcatel, Motorola and Tellabs as GPON suppliers for its FTTP network. Later this year, Verizon will begin deploying the Alcatel equipment first, to be followed by Motorola and Tellabs. This is subject to finalizing definitive agreements.



Both Motorola and Tellabs are currently supplying BPON equipment for Verizon's rollout in 16 states.



"G-PON is the next step in the evolution of the all-fiber-access network," said Paul Lacouture, Verizon's executive vice president for network and technology. "When we first launched the nation's only large-scale FTTP program in 2004, we said that one of the most important competitive and cost-effective features is that we could increase speed and capabilities by evolving to more advanced electronics and without having to change the fiber we had already deployed or are deploying. Today's announcement begins to fulfill that promise."



Verizon also confirmed that its FTTP project is on track to pass a total of 6 million premises by the end of this year. Verizon expects to continue to add about 3 million premises passed each year for the next several years.

http://www.verizon.com

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