Today's Top Stories AT&T (NYSE: T) senior executive VP and CFO John Stephens said on Thursday during the Bank of America 2012 Media, Communications & Entertainment Conference in Beverly Hills that the telco they could have a solution for what to do with its rural wireline assets by the end of the year.  | | Stephens (Image source: AT&T) | "With regard to our wireline business, particularly some of the non-urban wireline access lines, the process is ongoing," Stephens said. "There's been a lot written about what to expect or whether things have changed, but I pull us back to the beginning of year (when) we thought it would take 18-24 months to do a full evaluation and we shortened that time frame to 12-18 months and we're hopeful to have something done by the end of the year." What's fueled rumors about the fate of AT&T's rural lines was its failed move to buy T-Mobile. When the deal was announced, the service provider hoped that the purchase would help it solve its rural broadband problem with wireless service. "The challenge is broadband resolution for those non-urban areas," Stephens said. "We had a proposed transaction last year that was not approved that would have provided us that, and we have to go back to evaluating that capability." A sale of its rural lines would not be far-fetched, as fellow RBOC Verizon (NYSE: VZ) sold its rural lines in 14 states to Frontier Communications (Nasdaq: FTR) in 2010 and its New England lines to FairPoint (Nasdaq: FRP) in 2008. However, it appears that AT&T is also considering next-gen DSLAM technology as an option to service rural customers. In May, CEO Randall Stephenson said during a JPMorgan Chase & Co. call with investors that AT&T would leverage IP DSLAMS to offer a higher speed DSL service. "If you look at what happened with us in the first six months of 2012 with 1.3 million high speed broadband lines through our U-verse platform or our IP DSLAM platform, you see we can compete effectively in that marketplace," Stephens said. "You have to start taking that into account as well as the tax implications, the labor implications, and the regulatory implications." Broadband service overall continues to be a major driver in AT&T's consumer wireline revenue mix. On a year-over-year basis, consumer broadband revenues are up 10 percent. During the second quarter, the carrier added 155,000 new U-verse TV subscribers and 553,000 U-verse broadband subscribers, helping to offset the 96,000 traditional DSL subscribers it lost. Although the loss of traditional subscribers--due to defecting to cable or migrating to a higher speed service--has become an ongoing reality for AT&T, Stephens said that revenues are actually rising. "If you look at our customer counts, they were flattish because of the loss of DSL, but the U-verse broadband and the IP DSLAM products come with greater speeds and allow for greater ARPUs," Stephens said. "We are growing revenues in that space even though the customer counts net out." Another major factor in AT&T's broadband equation is IPTV, where the average revenue per user (ARPU) reached $170 a month thanks to customers who bundle IPTV with broadband and voice services as part of a triple play package. In addition to its looking at what to do with its rural lines, the service provider has been evaluating what lines of business it needs to exit or to sell a large stake to another player. In May, AT&T completed the sale of a 53 percent stake in its Yellow Pages business, which is known as AT&T Advertising Solutions and AT&T Interactive, to Cerberus Capital. As part of that deal it retains a 47 percent stake in the venture equity interest in the new YP Holdings LLC venture. "We believe that was a good solid transaction and get that focus on our business and was a first step review of assets," Stephens said. For more:
- see the webcast Special report: Q2 roundup: ILECs wade through legacy-to-IP migration Related articles:
AT&T's Q2 wireline growth driven by U-verse, next-gen business services
U-verse drives AT&T wireline business
AT&T, CWA hammer out tentative wireline labor agreements
Report calls AT&T, Verizon top U.S. 'investment heroes'
AT&T, IBEW agree on 1-year contract extension, CWA negotiations ongoing Read more about: rural broadband, investor conference
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BT (NYSE: BT) on Monday announced that it has promoted Luis Alvarez as the new CEO of BT Global Services, moving into the post beginning on Oct. 1.  | | Alvarez (Image source: BT) | A 12-year BT veteran, Alvarez most recently served as the President of BT Global Services, Europe, Middle East, Africa and Latin America. "We have a strong business in the UK, mature operations in key economies and are expanding our presence in the fastest growing parts of the world," Alvarez said in a statement. Alvarez is taking the reins of BT Global Services from current CEO Jeff Kelly, who decided to move back to the United States following an almost three-year tenure. Kelly, who will work part-time as a senior executive advisor to BT, the was named CEO of the division in January 2010 in a move to steer it back to profitability. During his tenure, Kelly led the company as it expanded its capabilities in key markets, including the United States, Latin America and Asia Pacific. One of the most recent initiatives BT Global Services took on was to expand its cloud and IT services in Colombia. In addition to cloud and IT services, BT Global Services is also fast becoming a bigger player in the global Ethernet market. On Vertical Systems Group's six-month Global Ethernet Leaderboard, which measures the amount of Ethernet port shares sold, the service provider climbed from number seven in March to the number four spot. That rise in the rankings is certainly attributable to its growing presence in international countries, including Asia Pacific, EMEA, Latin America and the United States. Having a solid set of services like Ethernet and cloud and presence combined with Alvarez's own experience in running operations in these countries will ensure the service provider can continue to be a competitive threat to other players like Orange Business Services, Verizon (NYSE: VZ), and Colt (Nasdaq: COLT). For more:
- see the release
Related articles:
BT expands cloud, IT security services in Colombia
BT reports 6% revenue dip; profits climb
BT Openreach adds 98 locations to its last mile fiber network
BT's cost-cutting, broadband service drive 3% earnings rise in fiscal Q4
BT hopes to attract more subscribers with 6 month free broadband bundle Read more about: BT, BT Global Services
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Jeff Gardner, CEO of Windstream (Nasdaq: WIN) on Thursday during the Bank of America Merrill Lynch 2012 Media, Communications & Entertainment Conference, said that he's seeing the demand for Fiber to the Tower (FTTT) revenues from its largest wireless customers continue to grow.  | | Gardner (Image source: Windstream) | The FTTT growth coming from two sources: inside its own traditional ILEC market and outside of market where it competes with other ILECs and aggressive cable operators. To date, about 60 percent of its FTTT sales have been is in its own markets where customers pay on a per Mbps basis. Gardner said that one of the major wireless operators have already doubled their original bandwidth is when they go to one of Windstream's FTTT sites. "In market we're earning in excess of our cost of capital and out of market it's totally incremental revenue that we've won versus incumbent LECs and cable companies," Gardner said. "We're getting better and better at this and we're going to spend $250 million on fiber to the tower projects." Gardner admits that Windstream does face a number of construction challenges in building out FTTT in rural markets where a number of its wireless operators need alternative backhaul sources where they don't have wireline assets themselves. "It's not easy to build fiber to the tower in rural markets," Gardner said. "This is underground fiber—miles and miles--to reach very rural cell sites with 5-7 year contracts." Gardner, however, is confident that given the low density of these rural sites, it should be able to gain renewal with its customers when the contracts end. Regardless of the challenges it faces, FTTT overall has become a large business driver for the telco. Although Windstream's wholesale revenues declined 12 percent, to $214 million, a factor the telco attributed the decline to a decision in the first quarter to suspend and modify certain wholesale products it inherited from its acquisition of PAETEC, Fiber to the Tower (FTTT) was a growth engine for its wholesale business During the quarter FTTT revenues were $164 million, up 5 percent year-over-year on a pro-forma basis. To bolster its FTTT capabilities, the service provider made a number of its organic and inorganic bets in recent years by expanding its own fiber reach and making strategic purchases. In 2010, Windstream announced its own plans to upgrade and expand the fiber network in its own 16-state ILEC territory with an additional 30,000 fiber route miles. Besides buying PAETEC, which included the Intellifiber wholesale operations that came from Paetec's acquisition of the former Cavalier Telephone, Windstream also bought the former fiber-rich Kentucky Data Link (KDL). With KDL, Windstream also enhanced its fiber reach to target more FTTT opportunities with a network that spans 22 states and a staff that understands how to build complex network configurations for wireless operators. For more:
- view the webcast (reg. req.) Special report: Wireline in the second quarter of 2012 Related articles:
Windstream's net income slides 44% on higher expenses
Windstream wins Defense Dept. fiber-services contract
Windstream serves up IT, telecom service bundles for SMBs
Windstream lights up 1G fiber network for Richmond, Va. school district
Windstream to lay off 375-400 employees in Q3 Read more about: Windstream
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Telefonica (NYSE: TEF) on Friday appointed Alcatel-Lucent's (NYSE: ALU) professional services division to consolidate its diverse set of network management and back office systems onto a common platform. As a service provider that operates in multiple countries, Spain-based Telefonica has two main challenges: Not only are its operational processes different in each country, but they also use a number of different software platforms. To simplify the telco's overall operations systems, Alcatel-Lucent's professional services group will combine the network management systems into one common software platform. This platform will be integrated with the remaining element of Telefonica's network operations without any impact on existing customers. Upon completion, Telefonica will have what it says is a more efficient way to conduct network monitoring and management to more rapidly resolve network problems that arise on its wireline and wireless network assets. Besides providing necessary software, Alcatel-Lucent's professional services group will help the telco create a set of best practices and operating procedures. It will also oversee the platform for the next few years. By making this move, Telefonica said it will be able to achieve three goals: streamline operations, improve service quality, and optimize costs. "Together, over the course of the next few years, we will achieve a new level of harmony and consistency that will make us more agile and efficient in managing our networks to respond to our customers' needs, to improve service quality and offer the highest availability with customer-focused, integrated processes," said Enrique Blanco, Telefónica's Global Chief Technology Officer, in statement. With the European economy is in transition, a factor that's made service providers delay spending on new equipment, this deal is significant for Alcatel-Lucent as it looks to turn around the company and fight off hungry service rivals like Ericsson (Nasdaq: ERIC). During the second quarter, the vendor was forced to cut 5,000 jobs across all of its regions as part of a company-wide restructuring process after reporting a Q2 loss amid slow telecom equipment sales. Despite the losses, the services sector overall has been a growth magnet for the Franco-American vendor. While Q2 revenues for its S3 (Software, Services and Solutions) declined 1.7 percent to €1.05 million ($1.38 million) year-over-year, on a sequential basis they rose 8.7 percent to €969 million ($1.27 billion). For more:
- see the release Related articles:
Alcatel-Lucent cuts 5K jobs amid Q2 2012 loss
China Telecom selects Alcatel-Lucent for its OTN/WDM transition
Alcatel-Lucent revamps management team structure
Earnings preview: Verizon seen doing well; ALU to miss guidance
BT Ireland chooses Alcatel-Lucent for its IP/VPN Ethernet initiative Read more about: Telefonica
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CENX, one of the early pioneers in the still-nascent Ethernet exchange market segment, announced Monday during the Carrier Ethernet World Congress in Barcelona that Ericsson (Nasdaq: ERIC) is the latest company to make an investment in the service provider.  | | Chen (Image source: CENX) | Ericsson joined Verizon Investments LLC, a subsidiary of Verizon Communications (NYSE: VZ), Mesirow Financial Private Equity, DCM, Highland Capital Partners, and Wasatch as the latest investment round. Besides making an investment in the company, Ericsson is working on various opportunities in the United States with CENX, particularly for 4G/LTE wireless backhaul. Nan Chen, co-founder and president of CENX said in an interview with FierceTelecom that its enhanced partnership with Ericsson will enhance its ability to serve a broader international market via the Swedish vendor's broad channels and service provider relationships. "The investment enables to really rapidly be able to expand globally," he said. "That obviously gives us a great channel with presence in 80 countries so with our technology and their global presence we're really adding value to both our customers." With wireless operators continually migrating to fiber-based Ethernet circuits for wireless backhaul, the CENX Carrier Ethernet Interconnect Systems & Services suite will come in handy for Ericsson's client's who are continually looking for the best options. CENX can appeal to service providers on two levels: providing physical interconnections between carriers at their Physical Exchanges, and offering the Interconnect System software where carriers interconnect systems and processes.
And while the physical connections CENX makes is important, Chen said the real secret sauce lies in the software component. "The good news is that when we do that software we can manage exchanges that are owned by us or exchanges owned by others, which made us even more valuable from the perspective of being able to manage different exchanges," Chen said. "When I say exchange it could be a mobile backhaul exchange." Neither CENX nor its investor partners revealed the amount of the latest financing round. This is the second big member of the telecom food chain to show support for CENX. In June, the Ethernet exchange provider got a $9.5 million investment led by Verizon and Mesirow Financial. For more:
- see the release Related articles:
eircom names CENX's Herb Hribar, T-Mobile UK's Richard Moat to leadership positions
CENX gets $9.5M investment from Verizon and Mesirow Financial
CENX brings aboard telecom veteran Dominick DeAngelo Read more about: Ericsson
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XO continues to find new fortunes in Ethernet over Copper
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