Today's Top Stories John Chambers, Cisco's (Nasdaq: CSCO) longest-serving CEO, shed some light Tuesday on who may be next in line to take over the company when he retires. Other than saying that he could possibly retire in the next two to four years, Chambers, in a Bloomberg article, said he and Cisco's board of directors have about 10 possible candidates they are reviewing every quarter. Those candidates include Gary Moore, Cisco's chief operating officer, Robert Lloyd, executive vice president of worldwide operations, Chuck Robbins, senior vice president of the Americas, and Edzard Overbeek, senior vice president of global services. At a time when executives have rapidly switched between various companies, Chambers is an anomaly. He has served as Cisco's CEO since 1995. During his 17-year tenure, Chambers has weathered a number of major storms, including the implosion of the dot-com industry, the ongoing recession and dealing with strong router competitors like HP (NYSE: HPQ) and Juniper Networks (NYSE: JNPR). "You begin to look at how these transitions occur, and the job of the board and myself is to make sure this next one goes really smooth," Chambers told Bloomberg. "Assuming the board wants me to, and assuming the shareholders do, I'll stay on as chairman after that." One of Chamber's most drastic measures came last year when the vendor cut 6,500 employees, or 9 percent of its workforce, in an effort to save $1 billion in annual costs and increase profitability. Then, this July, the vendor announced it would lay off another 1,300 employees. At the same time, a number of Cisco's top executives decided to move on to other ventures. Ned Hooper, a possible successor to Chambers who took on the chief strategy officer role in 2009, exited the company in July to found his own investment venture. In addition to Hooper, Cisco's Chief Marketing Officer Susan Bostrom and Charles Carmel, the former vice president of corporate development at Cisco who helped drive over 30 of the vendor's acquisitions, including Scientific Atlanta, left in 2011. While these executives did not cite reasons for their leaving, a number of reports indicate that they did not like the management structure that apparently delayed decision making. As part of his broad restructuring process, Chambers decided to simplify that management structure. As for the near-term future of the company, it's clear that Cisco will continue to invest in emerging technology areas, including data centers, IP routers, network provisioning and Operational Support Systems (OSS) and video services. Complementing its residential video play, Cisco purchased TR-69 software vendor ClearAccess and Virtuata. In its fiscal Q4 earnings season, Cisco's data center equipment revenue jumped 90 percent year-over-year, while IP router revenue rose 4 percent year over year to $2.09 billion. For more:
- Bloomberg has this article Related articles:
Cisco's fiscal Q4 revenues get boost from data center equipment, IP router sales
Cisco to lay off 1,300 workers
Cisco adds Benioff, Johnson to board of directors
Cisco acquires Virtuata, beefs up cloud, data center capabilities
Core switches to drive revenue growth in the Fibre Channel market Read more about: Ceo John Chambers
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Ericsson (Nasdaq: ERIC) on Tuesday added another piece to its Operational Service Systems/Business Support System (OSS/BSS) portfolio by reaching an agreement to purchase Toronto-based ConceptWave for an undisclosed amount. Through the all-cash transaction, Ericsson will add order management and product catalog capabilities to its growing OSS/BSS solution set. With Order Management, a service provider can handle its fulfillment flows by scheduling and or orchestrating tasks, materials and activities. For example, a telco that has an order for business grade Ethernet that requires both software and hardware orders could synchronize all parts of the order process to ensure the customer can have their service up and running on one service date. The Product Catalog is a system that would define all of the necessary components of a particular product like IPTV, including price, rules and interdependency with other products like broadband data and voice. Other OSS/BSS systems in a service provider's back office can use the catalogue's specifications to develop product bundles, campaign packaging, and revenue management. Besides enhancing its order management and product catalog capabilities, Ericsson also gets ConceptWave's four-region customer base, including North America, Latin America, Europe and Asia. Enhancing its OSS/BSS portfolio has been a major priority for Ericsson, as seen with its $1.15 billion acquisition of Telcordia in June 2011. The vendor immediately became the second largest vendor worldwide in Gartner's 2011 worldwide ranking for operation and business support systems (OSS/BSS) and next generation service delivery platforms. But it appears that Ericsson is not done building its OSS/BSS portfolio. Rumors have emerged that the Swedish telecom vendor is interested in purchasing Nokia Siemens Networks' (NSN) BSS unit. For more:
- see the release Related articles:
Rumor mill: Ericsson closing in on Nokia Siemens BSS unit
Sale signs: Nokia Siemens offloading BSS; Vivendi eyes multiple assets
Ericsson beefs up OSS power by acquiring Telcordia for $1.15B
Ericsson scoops up OSS/BSS vendor Telcordia for $1.15B Read more about: Acquisition, OSS
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FCC Commissioner Mignon Clyburn met with two citizens on Monday who are petitioning the FCC to help lower the cost of calls from U.S. prisons, most made from payphones managed by carriers like CenturyLink's (NYSE: CTL) Embarq, AT&T (NYSE: T) and privately-owned GTL via government contracts. The fees that families pay to talk to loved ones currently incarcerated were high enough to lead to several families filing a class-action lawsuit more than 10 years ago and eventually petitioning the FCC to regulate prison payphone rates. Spending more than $1 per minute to pay for a collect call from a traditional payphone located in the same country sounds exorbitant, but it's a reality faced by many of the families of the more than two million people incarcerated in U.S. prisons, according to Clyburn in a statement issued after meeting with Martha Wright and her grandson, Ulandis Forte and screening the documentary, Middle of Nowhere. "The cost of calling from prisons is over and above the basic monthly phone service families of prisoners already pay, and in many cases families will spend significantly more for receiving calls from prison," Clyburn said in the statement. In addition to a connection fee between $3 and $4, families pay per-minute fees of up to $0.89 for interstate long-distance service. This results in a single 15-minute interstate phone call costing as much as $17, according to the statement. "For those families, they will spend an additional $34 over and above their basic monthly phone rate to speak twice a month for a total of 30 minutes. Many cannot afford this," said Clyburn. Fees to call family or friends from prison vary from state to state. For example, the state of Texas charges call recipients local rates of $0.26 per minute and interstate long distance rates of $0.48 per minute. There's also a $2.50 monthly fee, and if the family wants to pay that fee by credit card, an additional $5.00 is tacked on. A study published in April 2011 by Prison Legal News detailed the rates and fees charged in various states. A CenturyLink spokesperson said the carrier is currently reviewing the proposals. The APCC (American Public Communications Council), which advocates for public communications providers (particularly providers of payphone services), explains in a FAQ on its site that "The rates for collect calls from corrections facilities can be higher than normal collect rates because of the additional costs associated with the specialized equipment and features required to control fraud and to allow the corrections facility administration a certain degree of control over inmate activity. These rates have become an issue not because of what PSPs are charging, but rather because of recent rate increases by certain long distance carriers who set the end user prices for long distance inmate collect calls." Still, Clyburn indicated in her statement that the fee issue is worth consideration by the FCC. "It is the Commission's responsibility to ensure that interstate phone rates are just and reasonable, and we have an obligation to ensure that basic, affordable phone service is available to all Americans, including low-income consumers," Clyburn said. "Incarcerated individuals and their loved ones should not be the exceptions here, and as watchdogs of the public interest, this Commission must and should act expeditiously." For more:
- see the news release (PDF) Related articles:
Bell Canada, Bell Aliant ask for regulatory permission to raise payphone fees
New York City converts payphones to free Wi-Fi hotspots
FairPoint to sell off its Northern New England payphone operations
Embarq Payphone completes Texas Criminal Justice phone system installation Read more about: FCC
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BT (NYSE: BT) Openreach on Tuesday announced plans to extend its hybrid copper/fiber Fiber to the Cabinet (FTTC) service to an additional 163 telephone exchange areas in 2013. Set to be operational in both the United Kingdom in areas such as Torquay, in Devon, and Kilbirnie in Scotland, the service provider said the latest phase of its ongoing FTTC buildout will extend service to over 1 million homes and businesses. As of September this year, BT has built out FTTC service to 11 million premises. Both BT Retail and other competitive providers like Talk Talk (LSE: TALK) and BskyB will be able to purchase wholesale access services on Openreach's FTTC network to deliver broadband services to their customer bases. Because FTTC is a hybrid copper/fiber delivery method where fiber is extended to a Remote Terminal (RT) cabinet and then service is delivered to the customer over existing copper via ADSL2+ or VDSL2, BT can deliver up to 80/20 Mbps. The actual speed each residential and business customer gets depends on the condition of the existing copper and how far a customer is from the nearest RT cabinet. Meanwhile, BT is delivering up to 330 Mbps with its Fiber to the Premises (FTTP) products. "Today's announcement shows that we are well into our journey to bring fiber to two-thirds of the UK by the end of 2014," said Mike Galvin, Openreach MD Network Investment, in a press release announcing the latest FTTC expansion effort. "We have now announced the bulk of the exchanges we will be deploying fiber to under our own steam but we are keen to go even further with the help of BDUK funding." This latest network build follows an effort in July where BT announced it would enable an additional 98 telephone exchange areas across the UK to deliver a mix of FTTC and FTTP broadband services. By the end of 2014, Openreach said, it is on track to extend fiber-based broadband, an effort that includes a mix of both FTTC and FTTP to about two-thirds of UK premises by the end of 2014. BT is augmenting its own buildout plans with Broadband Delivery UK (BDUK) funds from the government. In April, BT began building its first government-backed FTTX network under the BDUK program in Lancashire. Since BT launched its FTTC service in 2010, the service provider has enabled about 1,100 telephone exchanges with FTTC, and has increased the speed from 40 Mbps to up to 76 Mbps.
Both BT Openreach and BT Retail have made considerable progress on bringing fiber-based broadband services to their customers. In its most recent quarter, BT Retail added 150,000 fiber broadband customers, while Openreach added 170,000 connections. For more:
- see the release Special report: Wireline in the second quarter of 2012 Related articles:
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
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Ritter Communications on Tuesday reached an agreement to acquire west Tennessee-based Millington Telephone Company and Millington CATV. By making these deals, Ritter immediately extends its service footprint into the western Tennessee market with a new set of cable TV and traditional wireline telephone network assets. As a traditional telco, Millington Telephone Company offers a mix of POTS voice and broadband data services for residential and business customers in four counties in Tennessee, including Tipton County, which the telco said is one of the state's fastest growing areas. Like Ritter, Millington found its way into the cable TV industry in the early 1980s. Over its cable network, it offers cable-based video and broadband services in north Shelby County and south Tipton County. Dan Hatzenbuehler, chairman and CEO of Ritter, said in a release that buying Millington's assets "increases our customer base, strengthens existing relationships and improves our competitiveness and service offerings." When it completes the acquisition, Ritter, which currently serves 25,000 residential and business customers in over 45 Arkansas communities, will gain an additional 20,000 business and residential customers in parts of Shelby, Tipton, Haywood and Fayette counties in Tennessee. Although neither company would reveal the terms of the deal, Ritter said that once it gets the expected regulatory approvals and satisfies other customary conditions, it expects to close the two acquisitions by the end of this year. Consolidation of the independent ILEC market and regional cable market over the past three years has been fierce, and Ritter has not been shy about acquiring other local providers to expand its service and geographic footprint, particularly on the cable front. Following its acquisition of cable systems in a number of northeast and north central Arkansas communities from Cebridge Connections, now Suddenlink Communications, in 2005, Ritter bought Blytheville, Ark.-based CableTel in 2008 and then the retail division of Jonesboro, Ark.-based Optus in 2010. Complementing its acquisition efforts, Ritter has been no less aggressive in expanding its own network to target the needs of business customers that want Ethernet and cloud-based services. The service provider said it recently completed a "major fiber overbuild serving the main business and industry corridors in Jonesboro." For more:
- see the release Related articles:
Q4 roundup: ILECs bulked up on video, business and broadband
Independent ILECs go beyond the voice call Read more about: Acquisition, Tennessee
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Infonetics: Cloud-based security will jump to $18M market by 2016
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