Qwest Reports Continued Access Line Loss, to Offer Standalone DSL

Qwest Communications reported Q4 revenue of $3.5 billion, a 5.6% decrease from Q4 of 2002. For the full year, revenue was $14.3 billion compared to $15.4 billion for 2002, or a decline of 7%. The net loss for the fourth quarter was $307 million, or $0.17 per diluted share. Some highlights of the report:

• Access line loss continued at the same rate as Q3 2003. Total access lines, excluding the impact of 145,000 MCI lines disconnected in Q2, decreased by 3.9 percent year-over-year compared to 4.4 percent in the fourth quarter of 2002. Sequentially, access lines declined 0.9 percent for both the third and fourth quarters of 2003. The company said since launching its consumer bundle, the average consumer primary line losses have improved more than 30%.



• added 60,000 DSL lines in Q4, giving Qwest a total of 637,000 lines at the end of the year. Qwest plans to expand the DSL coverage area from 45% to more than 60% of total access lines by the end of 2004.



• Qwest plans to introduce stand-alone DSL service for customers who no longer require traditional phone service. Stand-alone DSL would allow customers to purchase only the services they want or need, including VoIP.



• Qwest plans to expand its VoIP coverage to the entire Minneapolis/St. Paul consumer market and introduce its business VoIP offering in the first half of 2004. Plans are in place to offer VoIP services in all major metropolitan markets within Qwest's local region by the end of 2004.



• CAPEX for Q4 was $615 million, compared to $561 million for Q4 2002. For full year 2003, CAPEX was $2.1 billion, compared to $2.8 billion in 2002.

http://www.qwest.com

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Ciena to Acquire Catena for $487 Million, Entering Broadband Access Market

CIENA will acquire Catena Networks, a privately-held supplier of broadband access equipment, for approximately $486.7 million in stock (77.5 million shares of CIEN). Catena Networks has deployed more than 5,500 integrated broadband access solutions for RBOCs, IOCs and CLECs. Catena's major customer include BellSouth and two other RBOCs.


Catena generated approximately $25 million in revenue in Q4 and is recently profitable. The company has approximately 250 employees. It has offices in Ottawa, Ontario and Research Triangle Park, North Carolina.


Catena's product line includes:

• CNX-5, a POTS+DSL linecard replacement for upgrading Lucent's SLC Series 5 (SLC-5) Digital Loop Carrier (DLC). The card-for-card upgrade eliminates the need for remote DSLAMs. It provides two lines of integrated POTS and two lines of DSL and replaces cards that provide two lines of POTS only. The product was first introduced in January 2001.



• CN100 Broadband Loop Carrier, which integrates the functions of a DSLAM, Digital Loop Carrier System and Media Gateway and enables remote provisioning and management. The product was first announced in June 2001.



• CN1000FX Fiber-to-the-X solution, which consists of new Optical Line Cards (OLCs) and Optical Network Units (ONUs) for Catena's CN1000 Broadband Loop Carrier Remote Terminal. Each Optical Line Card supports four ONUs via fiber connections. Catena's Optical Network Unit extends the POTS+ADSL loop electronics from the CN1000 Broadband Loop Carrier Remote Terminal closer to end-users. Each ONU supports 24 ports of integrated POTS+ADSL, narrowband special services and G.SHDSL, and is engineered to support VDSL. Catena's Fiber-to-the-X solutions are compliant with the ITU's G.983 series standards for Broadband Passive Optical Networks (BPONs), and Telcordia's GR-909 requirements for Fiber-in-the-Loop (FITL) access systems. The solution was first announced in June 2003.

http://www.ciena.com

• Catena Networks is headed by Jim Hjartarson, a co-founder of the company. Prior to forming Catena, Hjartarson was vice president and general manager at Cadence Design Systems, where he co-founded the Cadence Design Center in Ottawa, Ontario, Canada.



• Catena has raised $192 million in four rounds of funding. Investors include J. & W. Seligman & Co., Munder Capital Management, WestAM, Morgenthaler, Menlo Ventures, Berkeley International Capital, Worldview Technology Partners, The Goldman Sachs Group, Inc., Bessemer Venture Partners, BCE Capital and Silicon Valley BancVentures.

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Ciena to Acquire Internet Photonics for $150 million

CIENA will acquire privately held Internet Photonics, a supplier of carrier-grade optical Ethernet transport and switching solutions, for approximately $150 million in stock (24.4 million CIEN shares). Internet Photonics' Ethernet transport solution has gained momentum with North American cable MSOs, including deployments with six of top ten cable operators in the U.S. Carriers could also use Internet Photonics' solutions to deploy Ethernet private-line services.


Internet Photonics is based in Shrewsbury, New Jersey and Marlborough, Massachusetts. The company has approximately 110 employees. It generated approximately $5 million in revenue in Q4 and is not yet profitable.


Internet Photonics' product line includes:

• LIGHTSTACK MXA, a low-cost access device deployed at the customer premise or local CO/hub providing a managed demarcation point between the operator network and the customer and delivering Ethernet and/or SONET/SDH services.



• LIGHTSTACK MX, an access aggregation node that resides at the customer premise, hub, head-end, or central office and provides multiplexing of up to 8 GbE onto 10GigE wavelengths in a single stackable 1.75" high unit.



• LIGHTSTACK GSLAM, an aggregation solution that integrates optical transport, access service aggregation, switching, and add/drop multiplexing functionality. It can aggregate access circuits from the MXA and MX units. The platform offers the ability to crossconnect 64 Gigabit Ethernet connections.



• LIGHTHANDLER, a 40 wavelength passive optical add/drop and bi-directional optical amplifier that interfaces into existing SONET/SDH and DWDM networks. The 40 wavelength LightHandler platform, which has already been deployed by one major cable operator, provides video on demand (VOD) scalability as well as other service requirements in major metropolitan cable headends. Operators can start with a single four channel module and flexibly add modules to boost capacity to 40 channels at 10 Gbps. The product was introduced in January 2004.



• LIGHTSTACK NCS, a carrier-grade network configuration and service monitoring NMS. Its ability to simplify the tasks of network service provisioning, fault isolation, and performance monitoring makes it a powerful tool for enabling cable operators and carriers to profitably offer new Ethernet based services.

http://www.ciena.comhttp://www.internetphotonics.com

• Internet Photonics is headed by Gregory Koss, who was previously CEO of Sonoma Systems, a developer of ATM access equipment that was acquired by Nortel Networks in 2000. Its technical team is led by Dr. Martin Nuss, who was previously the Director of the Optical Data Networks Research Department at Lucent Technologies.



• Internet Photonics has raised $63 million in funding. Investors include The Sprout Group, ComVentures, Telesoft Partners, AT&T and New Venture Partners LLC, formerly the New Ventures Group at Lucent Technologies.

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Ciena Reports Revenue of $66 Million

CIENA reported revenue of $66.4 million for the fiscal quarter ending 31-January-2004, compared with $70.5 million for the same period last year. CIENA's reported net loss for the quarter (GAAP) was $76.7 million, or a net loss of $0.16 per share. There were 100 customers during the quarter, including 14 new accounts. There was one international customer that represented 17% of the quarter's revenue. Overall gross margin for products and services was 30.9%. The company ended the quarter with cash and short- and long-term investments valued at $1.52 billion.


Separately, CIENA announced its intent to acquire two companies, Catena Networks (broadband access systems) and Internet Photonics (optical Ethernet transport and switching).


Exclusive of any potential impact from the acquisitions, the company expects that revenue in its second fiscal quarter will be up by as much as 20% from its fiscal first quarter revenue.


"The acquisitions of Catena and Internet Photonics are part of CIENA's ongoing efforts to fuel long-term revenue growth and sustained profitability by expanding our addressable market; capitalizing on new growth opportunities in adjacent and complementary markets," said Gary Smith, CIENA's president and CEO. http://www.ciena.com

• In 2003m CIENA acquired Akara Corporation, a start-up developing SAN over SONET/SDH solutions. The deal was valued at $45 million consisting of $31 million in cash and $14 million in shares of CIENA common stock when it was announced in August 2003.



• Earlier in 2003, CIENA acquired WaveSmith Networks, a start-up based in Acton, Massachusetts, for its multiservice edge switching systems. The WaveSmith platform is designed for central office switching and applications such as DSL aggregation. CIENA valued the transaction at approximately $158 million, which is net of the return it will recognize on its earlier investment in WaveSmith.

Ciena is also partnering with Laurel Networks for edge routing and with Luminous Networks for multi-service provisioning platforms for RPR and SONET/SDH.

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Teknovus Ships EPON System-on-a-Chip

Teknovus, a start-up based in Petaluma, California announced shipment of a fully integrated Ethernet Passive Optical Network (EPON) controller for Optical Network Units (ONUs). The device is compliant with the emerging IEEE 802.3ah EPON standard. It integrates an 802.3ah EPON engine supporting multiple logical links, along with an EPON SERDES, two Ethernet PHYs, integrated buffers, and an embedded processor for management in a single package. The device also includes line-rate Layer 2/3/4 packet filtering and classification hardware, offers a broad suite of VLAN functions, and incorporates a rich set of management functions, statistics, and programmable alarms. http://www.teknovus.com

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Charter Adds 88,100 Cable Modem Users in Q4

Charter Communications reported Q4 revenues of $1.217 billion, an increase of 2% over last year's Q4 revenues of $1.189 billion. This growth is due primarily to a $49 million, or 47%, increase in high-speed data revenues, reflecting 437,400 additional data customers since December 2002, including 88,100 in the Q4.

• High-speed data revenues increased 65% year over year. Bundled customers increased 35% in 2003 and represent 22% of Charter's customer relationships as compared to 16% a year ago.



• Charter reported a net loss of 120,900 analog video customers over the past twelve months and a net gain of 2,100 digital video customers during the year.



• Charter ended the year with 6,431,300 analog video, 2,671,900 digital video and 1,565,600 high-speed data customers. The Company also ended the year with 24,900 telephony customers, principally in the St. Louis market, an increase of approximately 9% compared to the end of 2002.

http://www.charter.com

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Motorola Introduces Softswitch-based IP Multimedia Subsystem

Motorola's Global Telecom Solutions Sector (GTSS) introduced an IP Multimedia Subsystem (IMS) that complements its SoftSwitch (MSS) and Push-To-Talk over Cellular (PoC) core product initiatives. The Motorola IP Multimedia Subsystem (IMS) enables converged voice, data and video applications through standards-based interfaces. It is compliant with 3GPP and 3GPP2 standards for IP Multimedia Subsystems, and supports a variety of 2.5G and 3G wireless access networks, including GPRS, EDGE, UMTS, and CDMA, as well as emerging systems such as IEEE 802.11 WiFi, wireline and enterprise networks.


Motorola said its IMS architecture allows a single application to work across all IP enabled wireless access networks, instead of each one having to be customized to the underlying radio access technology and thereby having limited applicability. http://www.motorola.com

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AudioCodes Announces UMTS Compliant Media Gateway

AudioCodes has extended its Stretto converged (wireless and wireline) media gateway product family to comply with the Universal Mobile Telecommunication System (UMTS) R'4 and R'5 standards. AudioCodes' UMTS-enabled media gateways and blades enable OEM vendors to build and offer next generation cellular networks, based on carrier-grade, feature- rich, standards-compliant media gateways. Such gateways enable 3G operators to cap their investment in legacy TDM equipment or proprietary technologies. http://www.audiocodes.com

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BT to develop new National Network for the NHS

BT was awarded a seven-year contract valued at £530 million to procure, integrate and manage networking services for the New National Network for the NHS. The project, which is part of a £5 billion program to modernize IT systems used by the national health service, is described as one of the largest intranets in Europe. BT said the increased bandwidth provided by the network would open up a host of new opportunities to the 18,000 NHS sites in England. http://www.btplc.com

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China Telecom Expands IP-based PAS Network

China Telecom Corporation (CTC) awarded a contract valued at approximately $18.8 million to UTStarcom for expansion of its IP-based PAS (Personal Access System) network in the province of Gui Zhou. The IP-based PAS deployment in Gui Zhou in 2003 attracted 350,000 subscribers in its first six months. http://www.utstarcom.com

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Mexico's Ultravision Deploys Navini's Broadband Wireless

Mexico's Ultravision S.A. de C.V., which operates MMDS wireless cable television networks in over 40 cities, begin commercially deploying a Non-Line-of-Sight wide- area wireless broadband network using equipment from Navini Networks. Ultravision will deploy Navini's 2.6 GHz MMDS technology covering approximately 334,960 households in Puebla, San Andres Cholula and San Pedro Cholula. Ultravision will be able to offer a broadband service with download speeds up to 1.5 Mbps and upload speeds up to 550 Kbps. Financial terms were not disclosed. http://www.navini.com

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EC Notes Good Progress in Rolling out Broadband

A mid-term progress report published by the European Commission notes good progress in rolling out broadband access and in getting public services on line. Broadband penetration has almost doubled in the year to October 2003 and there has been strong progress in a number of policy areas. The report finds that future priorities should include a focus on interoperability, standards and multi-platform access, learning from practical experiences in other EU member states, focusing on content for new high speed services, and developing businesses models for e-services.


The eEurope 2005 Midterm Review is online at:
http://EURpa.eu.int/information_society/eEurope/2005/all_about/mid_term_review/index_en.htmhttp://europa.eu.int

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Sweden's KTH Selects Axerra's Multiservice over Packet

Sweden's Royal Institute of Technology (KTH) is deploying Axerra Networks' multiservice over packet (MSoP) solution in a Radio Access Network. Voice and data traffic from base transceiver stations (BTS) will be integrated and aggregated by the Axerra platform for efficient transport to the base station controller (BSC) over the IP/Ethernet backbone of the Swedish University Network (SUNET).



The mobile/wireless network project at Sweden's Royal Institute of Technology is part of a SIBED (Sweden-Israel Testbed Program for IT Applications) initiative that supports the development of primarily wireless applications in test bed environments. The GSM/GPRS components used as the core of the network were provided by Ericsson. http://www.axerranetworks.com/

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NTT Communications Deploys Turin's Transport Platform

NTT Communications has chosen Turin's Traverse Multiservice Transport Platform to support their Ethernet Leased Line Services in Japan. NTT Com is deploying Turin's Traverse 600 on the customer premises to support its Ether Arcstream service. The Traverse 600 is a compact, multiservice transport solution that combines next-generation SONET/SDH transport and Ethernet switching capabilities in a single platform optimized for metro access applications. Financial terms were not disclosed. http://www.turinnetworks.com

• Earlier this month, Turin Networks announced that it had reached the 75th customer milestone. The company said it is gaining momentum with Independent Operating Company (IOC) customers and other service providers due to its ability to provide SONET transport, multi-bandwidth management as well as Ethernet capabilities a compact, highly integrated system.



• Turin's Traverse platform integrates scalable OC-3 to OC-192 SONET transport, multi-ring bandwidth management, wideband and broadband DCS, and Ethernet over SONET switching in one system. It is based on a custom, distributed ASIC switch-fabric that grooms and switches both TDM and packet traffic. It supports the full SONET feature set, including UPSR, BLSR and 1+1 APS. It also incorporates a unified optical control plane and advanced bandwidth management system, including virtual concatenation and rate shaping features, as well as capabilities that enable the fast activation and delivery of dynamically scalable Ethernet services.

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Starhome Secures $20 Million for Mobile Roaming

Starhome, a subsidiary of Comverse Technology, secured $20 million in equity financing for its mobile roaming technology for wireless carriers. Starhome offers a portfolio of inbound and outbound roaming solutions including roaming infrastructure, optimization and information, as well as specialized value added services applications. Its customer list include 50 leading mobile operators representing 175 million subscribers worldwide. The new financing was led by Apax Partners Funds. Starhome is based in Zurich, Switzerland. http://www.starhome.com

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Pingtel Offers New Open Source Business Model for VoIP

Pingtel is moving its entire Enterprise communications suite, SIPxchange IP PBX platform, into open source. With this move, Pingtel has shifted its business model to become a subscription-based software and services company similar to leading Linux-based enterprise subscription models, focusing on producing business-grade distributions of open source code and offering the requisite customer support, documentation, professional services and training functions required to support mission critical enterprise communications applications. The company plans to release the code in March 2004 through its website.



"The combination of standards-based SIP and open source is a powerful union that will reshape the enterprise communications market at every level, providing the foundation on which a new market model will be based," said William J. Rich, Pingtel's CEO.



Pingtel's enterprise communications suite includes the SIPxchange Comm Server for IP PBX and call routing applications, SIPxchange Media Server with voice mail, auto-attendant and IVR, the Pingtel Configuration Server and the Instant xpressa) SIP soft phone and xpressa) desktop SIP phones. SIPxchange software runs on standard PC server hardware and using the Linux open source operating system. Pingtel will offer Enterprise Editions of the open source code base with full support and documentation on a subscription basis, based on the number of CPUs in the server host.



Pingtel also said that it is in the process of migrating its existing customer base to the new open-source model. http://www.pingtel.com

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ITXC Sees 31% Sequential Revenue Rise in Q4

ITXC reported revenues of $97.9 million for Q4 2003, an increase of 31% from the same quarter of 2002 and a sequential increase of 31% from Q3 2003. The company's net loss for the fourth quarter of 2003 was $11.1 million.



Minutes of traffic for 2003 were approximately 4.1 billion versus approximately 3.1 billion minutes for 2002.



The company's pending merger with Teleglobe recently received notice of early termination of the Hart-Scott-Rodino review period. http://www.itxc.com

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Spain's Red Eléctrica Selects Ciena's Multiservice Switch

Red Eléctrica Telecomunicaciones, a wholesale carrier in Spain, , has selected CIENA's DN 7 series multiservice switching platform for deployment in the expansion of its national network and migration to an MPLS architecture. The carrier will use CIENA's DN 7 series platform to reduce its leased-line expenditures by consolidating its ATM network traffic in support of its high-growth ADSL services. Red Eléctrica operates its own 13,000 km fiber backbone.



The DN 7 switch can deliver native Frame Relay, ATM, Ethernet, Circuit Emulation Services and MPLS functionality. http://www.ciena.comhttp://www.albura.com

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Cisco Integrates Video Telephony with IP Phones

Cisco Systems unveiled a new video telephony solution with significant conferencing, security and system migration enhancements. The new capabilities, which are based on the latest release of the Cisco IP PBX (CallManager 4.0), allows real-time, person-to-person video sessions to be added transparently to telephone calls. The solution integrates a Cisco IP Phone with an associated personal computer and web cam. It interoperates with multiple new and existing desktop and room-based videoconferencing systems. Cisco also introduced the new Cisco MeetingPlace 8106 Rich-Media Conferencing Server, which delivers converged IP voice, video and web conferencing using technology from Cisco's recent acquisition of Latitude Communications. http://www.cisco.com 18-Feb-04

http://www.cisco.com

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Telecom Italia Reports Fast Broadband Growth in Europe

Telecom Italia reported the fastest broadband growth for any operator in Europe: during Q4 2003, the company added 530,000 ADSL subscribers, giving it a total of 2,200,000 broadband customers at year's end. The rapid growth accelerated in January 2004 with the addition of 300,000 broadband customers during the month. As of 31-January-2004 , Telecom Italia Wireline had 2,500,000 broadband customers, of which 2,320,000 were in the company's domestic market and 180,000 were in France and Germany.



Overall, Telecom Italia Wireline's revenues for 2003 increased by 1.0% to EUR 17.216 billion, compared with 2002, building on the positive trend that prevailed throughout 2003 and reversing the negative trend of the previous 4 years. http://www.telecomitalia.it

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