Today's Top Stories Tom Wheeler was confirmed by the Senate on Tuesday as the FCC's new chairman. A former telecom lobbyist and investor, Wheeler was nominated by President Barack Obama in May and will replace acting FCC Chairwoman Mignon Clyburn, who took over the post when Julius Genachowski left earlier this year. Wheeler faced last-minute opposition from Senator Ted Cruz (R-Texas) over his views on political disclosure rules, while consumer advocates cited concerns about whether his former roles at CTIA and the National Cable Television Association (NCTA) would affect his ability to be unbiased about telecom policy. Wheeler gained the support of Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.), who initially said he was skeptical that "a lobbyist" would be the right fit for the FCC chairman position. "Tom Wheeler will be a strong advocate for consumers and the public interest at a time when the FCC is facing decisions that will shape the future of our nation's telephone network and the wireless, broadband, and video industries," Rockefeller said in a statement. In addition to Wheeler, the Senate confirmed Michael O'Rielly, a veteran Republican advisor in Washington, D.C., to take over from Republican FCC Commissioner Robert McDowell, who left the FCC earlier this year. Clyburn congratulated both men in an official statement. "Tom brings a tremendous depth of experience, talent, and knowledge that will serve him well as the leader of this critically important agency," she said. "I have no doubt that he will be an outstanding FCC chairman." For more:
- The Hill has this article Related articles:
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FCC nominee Wheeler backs away from past comments on AT&T/T-Mobile merger Read more about: FCC, personnel changes
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Sprint (NYSE: S) reported that its wireline revenues of $875 million were driven by sequential increases in both Internet and voice segments. During the quarter, Internet revenues were $420 million, up from $373 million in Q2 2013, while voice revenues were $375 million, an increase over $333 million in the previous quarter. Meanwhile, data and other revenue were $64 million and $16 million vs. $14 million and $57 million in the second quarter. The service provider continued to enhance its wireline capabilities in the third quarter by upgrading its network and offering a host of new higher speed services. To support its wireline and wireless services under its Network Vision initiative, the service provider is in the process of upgrading its optical network backbone with Ciena's 6500 platform. As part of that work, Sprint deployed a 100G circuit over a 1,304-mile span in the United States and recently completed a live 400G trial. In tandem with its network upgrades, it introduced a suite Ethernet wavelength services supporting 10 Gigabit Ethernet (GigE), 40GigE and 100GigE speeds under its new Ethernet Wave Service line. From an overall financial perspective, Sprint's net operating revenue fell 2 percent to $8.68 billion. Shares of Sprint were listed at $6.75, up 7 cents, or 1.05 percent, in morning trading on the New York Stock Exchange. For more:
- see the earnings release Earnings summary: Wireline telecom earnings in the third quarter of 2013 Related articles:
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Sprint's wireline revenues rise to $910M with voice service gains Read more about: Sprint
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Level 3 Communications (NYSE: LVLT) reported that Core Network Services (CNS) revenue was a key growth factor, rising 1.7 percent sequentially to $1.4 billion. Inside CNS, the service provider's enterprise services segment, including the EMEA UK Government unit, grew 7.4 percent year-over-year and 3.1 percent sequentially to $905 million. It reported that transport and fiber and IP and data services revenues were $491 and $502 million, respectively. "We had another solid quarter, with continued growth in enterprise Core Network Services revenue," said Jeff Storey, president and CEO of Level 3, in the earnings release. "Our secure and reliable solutions are helping our customers manage the complexities of their IT environments." On a regional basis, North America was again the leader with $987 million in total revenues. While EMEA saw enterprise and wholesale revenues rise to $88 and $102 million, respectively, they were impacted by slow UK government sales, which declined to $32 million. Finally, Latin America CNS enterprise revenues rose 13.1 percent to $149 million. The company did report a number of losses, particularly in the wholesale segment, which declined to $492 million. From an overall financial perspective, Level 3 reported total revenue of $1.56 billion, down from $1.59 billion from Q3 2012, but up sequentially from $1.57 billion in Q2 2013. It also narrowed its losses to $21 million, down from $166 million in the same period a year ago. Financial challenges continued to be an issue for Level 3 during the quarter. In an effort to cut costs and pave a path to become profitable, the service provider announced earlier in the quarter that it would lay off 700 of its employees worldwide. Looking toward the fourth quarter, Sunit Patel, CFO of Level 3, said they expect "stronger sequential growth in Adjusted EBITDA, from the starting point of $415 million in the third quarter." For the full year 2013, Level 3 said it expects positive free cash flow, excluding payments related to interest rate swap agreements of approximately $45 million. Shares of Level 3 were trading at $29.28, up $2.26, or 8.36 percent, in morning trading on the New York Stock Exchange. For more:
- see the release Earnings summary: Wireline telecom earnings in the third quarter of 2013
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Level 3 extends Vyvx video services to South Africa Read more about: Level 3 Communications
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Ixia is continuing with its acquisition spree with a $190 million cash deal to acquire application and visibility solution vendor Net Optics. After meeting customary closing conditions, the two companies expect the purchase to close in Q4 2013. The board of directors for both Ixia and Net Optics both approved the terms of the agreement. Net Optics has been a profitable company, recording $49 million in revenues in 2012. During the first nine months of 2013, the vendor's revenue grew 21 percent year-over-year, reaching $42 million, with Q3 revenue growth of 31 percent year-over-year to reach $15.5 million. Ixia said in a release announcing the acquisition that it expects the acquisition to be accretive to non-GAAP earnings by the second full quarter after the acquisition closes. Errol Ginsberg, Ixia chairman and acting CEO, said that the acquisition of Net Optics not only enhances its product with a larger set of "network packet brokers, comprehensive physical and virtual taps and application aware capabilities," but also "strengthens our service provider customer base, increases our footprint in the enterprise, and broadens our sales channel and partner programs." Ixia also gets to tap into another established customer base. Net Optics currently serves a mix of 8,000 enterprises, service providers and government organizations. This acquisition comes at a pivotal time in Ixia's history. Last week, Vic Alston resigned as Ixia's president and CEO and as member of its board of directors after the company's audit committee determined that he misstated part of his academic credentials, age and early employment history. For more:
- see the release
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Spirent gets into automation game by acquiring Fanfare Read more about: Ixia
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Calix (NYSE: CALX) reported that Q3 2013 revenue rose 27 percent to $103.6 million, up from $81.3 million in Q3 2012 due to an uptick in its Unified Access portfolio products to both domestic and international service provider customers. It initially forecast Q3 revenues between $102 million and $106 million. Analysts expected Q3 profit to be 14 cents a share, up from 4 cents a year earlier, and revenue of $104.35 million. The company's non-GAAP net income was $10.2 million, or 20 cents per fully diluted share. Non-GAAP net income was $1.8 million, or 4 cents per fully diluted share, for the third quarter of 2012. GAAP net income for the third quarter of 2013 was $0.5 million, or 1 cent per basic and diluted share, compared to a GAAP net loss of $7.1 million, or 15 cents per basic and diluted share for the third quarter of 2012. During the quarter, Calix reported service providers in 16 states in the U.S. and Canada announced Gbps-based fiber to the home (FTTH) services using their Unified Access product line. One of Calix's key FTTH customer wins was CenturyLink (NYSE: CTL), which named it as its GPON supplier for its pilot in Omaha, Neb. Carl Russo, president and CEO of Calix, said during the earnings call that the company is seeing more of its customers citing interest in deploying FTTH networks. "It's becoming a much more widespread phenomenon," he said. "And part of it is driven by the economics of where fiber deployments have started to get to, i.e. lower upfront costs with much better operating economics, versus where continually extending the copper is going if the service provider is in a competitive environment."
These deployments helped drive up domestic revenue 12.9 percent to $92.9 million. It also continued to make progress outside of the United States and Canada as international revenues were $10.7 million. While international sales were 10 percent of its revenues, they declined 11.6 percent sequentially from $12.1 million in Q2 2013. For the fourth quarter, the vendor issued a more conservative outlook with a revenue range of between $97 million and $103 million and gross margin of 46 percent and 47 percent. Michael Ashby, CFO of Calix, said during the earnings call that "This expected decline reflects the completion of several BBS projects and include professional services where we have lower margins" and "we believe that this is a one-time gross margin impact." Shares of Calix were listed at $12.50 at the close of trading on the New York Stock Exchange on Tuesday. For more:
- see the earnings release
- see the earnings transcript (sub req.) Earnings summary: Wireline telecom earnings in the third quarter of 2013
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CenturyLink names Calix as its PON supplier for Omaha FTTH pilot
Calix's Q2 revenue rises 20 percent to $99.4 million on strong sales
Calix avoids Q1 downward trend as revenue rises to $90.5 million
GPON drove wireline access growth in Q4 2012, says Dell'Oro Read more about: Calix
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