Today's Top Stories FairPoint Communications (Nasdaq: FRP) is facing a new challenge from Maglan Capital, who wants to gain a larger presence on the telco's board of directors. The firm said it will propose to replace three of the company's directors at the next board meeting this spring. Maglan, an investment fund that owns a 6.2 percent stake in the telco, told the board in April that it they should sell more of their rural telecom assets outside of Northern New England. In February, the telco completed its sale of Idaho-based network properties to Blackfoot Telecommunications for about $30 million. Selling its Idaho properties was part of a move to grow the company and enhance profitability, particularly in its core New England markets of Maine, New Hampshire and Vermont. The telco said in a prepared statement that it continues to hold discussions with Maglan and "welcomes input toward the goal of improving long-term value." "We are pleased with our significant progress executing on our four pillar strategy to enhance sustainable value for all FairPoint shareholders and we will continue to act in the best interests of FairPoint and its stakeholders," FairPoint said. David Tawil, co-founder of Maglan Capital told FierceTelecom that while selling the Idaho assets is a good start, they need to consider divesting other rural properties. "They really need to get on the bandwagon on selling those smaller telecom properties they own spread across the Midwest," Tawil said. "It's not part of their core business, and there's no more efficiencies they can squeeze out of those businesses." While FairPoint has made progress to improve its business since emerging from bankruptcy protection, Tawil said they also need to handle their cash differently and issue a dividend. "At this point, they are generating a fair amount of free cash flow and they have to look like every telecom company," Tawil said. "They have got to look more like CenturyLink (NYSE: CTL), Windstream (Nasdaq: WIN), Frontier (Nasdaq: FTR), AT&T (NYSE: T) and Verizon and issue a dividend because they're not going to get valued the way those other guys get valued."
Tawil added he thinks that the telco wants to "keep as much flexibility as they can going into negotiations with the unions." The service provider and the International Brotherhood of Electrical Workers union have been at odds since 2010 when FairPoint hired a non-union company to do work on its New York properties. According to a report in vtdigger.com, the collective bargaining agreement, which FairPoint and the IBEW negotiated when it acquired Verizon's northern New England network in 2008, said it could not outsource work to non-union companies. Overall, FairPoint continues to make considerable progress in becoming a profitable company. In Q3 2013, it reported that revenues grew $1.5 million sequentially to $236.0 million. A key factor in the revenue mix was Ethernet, rising to $16.4 million as retail and wholesale circuits grew 57.8 percent year-over-year. Regardless of the progress made, Maglan said in a letter that "FairPoint will only be able to unlock its significant intrinsic value once it demonstrates a meaningful and firm commitment to return capital to shareholders."
For more:
- WSJ has this article Related articles:
FairPoint completes $30 million sale of Idaho properties to Blackfoot
FairPoint's Ethernet service revenues jump to $16.4 million
FairPoint extends broadband service into 6 Maine towns
FairPoint expands broadband footprint in 6 New Hampshire towns Read more about: Fairpoint Communications
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AT&T (NYSE: T) is making its fiber-based network service capabilities available to more California-based businesses by completing the installation of its fiber to over 450 multi-tenant office buildings throughout the San Francisco metro area.
With this latest buildout complete, it will be able to offer its fiber-based broadband services, including Ethernet and cloud, to over 16,000 area business customers. Two of the buildings that will be served are Two Embarcadero Center and 680 Folsom, both of which are owned by Boston Properties. The network extension in San Francisco is part of the telco's broader three-year Project Velocity IP (Project VIP) plan, part of which includes deploying fiber to an additional 1 million business locations in its 22-state wireline service area by the end of 2015. California is one of its largest Project VIP network investment targets. Overall, it will invest $1.5 billion in the state to bring fiber to 800 buildings and serve a total of 30,400 businesses. Besides California, AT&T has made progress in extending fiber to 107 buildings in Ohio and 93 buildings in North Carolina. Providing fiber-based services like Ethernet has become a major business service growth priority for the telco. Despite seeing overall business revenues decline 0.9 percent sequentially to $8.8 billion, next-gen business services, which include Ethernet and IP VPN, grew 15.7 percent in Q3 2013 vs. Q2 2013. For more:
- see the release Special report: AT&T's $14B Project VIP: breaking out the business service, U-verse numbers Related articles:
AT&T extends fiber into 107 buildings in Ohio through Project VIP initiative
AT&T lights 93 North Carolina buildings with fiber as part of Project VIP initiative Read more about: Carrier Ethernet
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CenturyLink's (NYSE: CTL) cloud and data center subsidiary Savvis has scored another point in the financial services sector by securing a contract for data center services with trading company IEX Group. The trading provider will use Savvis' data center complex in Weehawken, N.J., as the primary site of its new alternative trading system. Leveraging the NJ2 site in site in Weehawken and a secondary presence in Savvis' CH4 data center in Chicago, IEX said it will provide trading connectivity and market data to a range of broker subscribers. Savvis is already a well-established player in the financial arena, providing a suite of network and latency management tools and access to over 200 exchange and liquidity venue feeds. "Savvis' proven track record in hosting mission-critical infrastructure for a number of liquidity venues makes it an ideal partner to enlist in our mission to protect investor orders, from both a technology and market-design perspective," said Ronan Ryan, chief strategy officer at IEX, in a release. During the third quarter, Savvis was once again a key revenue producer for CenturyLink as operating revenues rose 4.6 percent year-over-year to $342 million. The service provider also made itself more valuable to the financial and other segments it serves by adding about 80,000 sellable square feet of colocation space. For more:
- see the release Related articles:
CenturyLink legacy declines drag revenue down to $4.52B
CenturyLink, CWA reach accord on 4-year labor contract
CenturyLink deepens Telstra Global's U.S. reach via NNI arrangement Read more about: Savvis
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IPTV gains on cable: While cable subscriber numbers are still much higher at 93 million worldwide, IPTV is posting steady gains, an Infonetics Research report says. The largest boost is in Asia, with China Telecom boasting 22 million IPTV subscribers. Overall, IPTV subscriptions grew 6 percent sequentially from Q4 2012 to Q1 2013, while cable subs slumped 1 percent in the same period. "Cable TV and IPTV subscriptions in North America and EMEA continue to move in opposite directions," said Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research. "While telcos saw healthy quarter-over-quarter gains in IPTV subscribers in both regions in the first quarter of 2013, cable video subscribers fell off yet again." Orange (NYSE: ORAN), Iliad Group, Verizon (NYSE: VZ) and AT&T (NYSE: T) rounded off the top five IPTV providers, which combined have 43 million subs. Release Optical hinges on 100G: Between 2012 and 2018, the optical networks market will see a compound annual growth rate of 3.1 percent and will surpass $17.5 billion, Ovum predicts. The research firm sees increased spending and the surge in demand for 100G as key factors in this growth: In 2013, revenues for 100G optical products exceeded 40G products for the first time, and spending was up 233 percent in the first half of 2013 compared to a year previously. "Nearly all new large-scale, long-haul optical networks designed and deployed today will be 100G," said Ian Redpath, analyst, network infrastructure at Ovum and the report's author. "100G has assumed the lead position and will not yield within our forecast period. Two positive market trends are emerging at the same time. The first is a need for the CSPs to refresh network technology after a long period of running core networks hotter and delaying investment. The second major trend is the maturity of 100G technology to the point where CSPs have begun deployments at scale. 100G is in the right spot at the right time." Release Dark fiber outlook brightens: Optical network providers laid more fiber optic cable in 2011 than they had since the halcyon days of 2000, a CRU Group study says in a Communications of the ACM article on the dark fiber market. And wholesalers are seeing a pickup in activity around buying and leasing dark fiber lines, the CACM article says. However, there is still some caution around buying dark fiber. Some carriers are worried about being labeled as primarily infrastructure providers, while "another drawback to leasing dark fiber is that a company could wind up enabling a competitor." Article Read more about: Week in Research
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TDS Telecom (NYSE: TDS) is moving forward with four broadband stimulus projects that will extend service to customers in parts of Georgia and Wisconsin. Targeting the south of Fowlstown in Decatur County, Ga., and around Sycamore in Gadsden County, Fla., TDS' Quincy Telephone Company subsidiary is building network facilities to bring broadband service to about 400 households. For this $1.8 million project, the telco installed 14 miles of fiber optic cabling and five new remote terminal (RT) cabinets in Quincy Telephone Company's exchange. Under the terms of the agreement with the Rural Utilities Service, the grant covered 75 percent of the cost and TDS invested the remaining 25 percent (about $450,000). In Wisconsin, the telco is in various stages of completing projects in four areas, including Medford, South Wayne, Stetsonville, and Woodford. With the project around South Wayne and Woodford, the telco's UTELCO subsidiary partially completed a project that will ultimately provide broadband services to about 850 area households. The service provider installed 40 miles of fiber optics and 14 new RT cabinets. Set to be completed by the end of the year, the projects in Medford and Stetsonville will provide about 1,200 with broadband service. TDS installed about 84 miles of fiber cabling and 18 RT cabinets are being installed throughout its Midway Telephone Company telephone exchange to provide high-speed Internet access to more residents. Earlier this month, it completed a project serving Beetown and Potosi, Wis., that will bring broadband to about 500 households. Similar to its other buildouts in rural areas, TDS said it would inform residents when service is available. During the past five months, TDS has completed nine ARRA projects in Georgia, Indiana, Missouri, New Hampshire, and New York. For more;
- see the Medford, Stetsonville release
- and the South Wayne, Woodford, Wis. release
Related articles:
TDS Telecom completes part of Alabama broadband stimulus build
TDS' Wisconsin, New Hampshire broadband projects extend service to 1,300 customers
TDS Telecom extends broadband to 600 more homes in Indiana
TDS Telecom wraps sixth broadband stimulus project in Georgia Read more about: Tds Telecom
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Verizon gets ready to make bigger dent in online video
Grading the top 13 wireline service providers in Q3 2013
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