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News summary for 7/19/07

Thu, 07/19/2007 - 10:01am

Motorola posts quarterly loss, re-organizes cable unit
By Mike Robuck

Motorola reported another disappointing quarter, but took the occasion to slip in a mention of a reorganization involving its cable unit. The company is folding its Networks Mobility unit into its Connected Home Solutions division to form the Home and Networks Mobility division.

“The advantage in combining wireless networks with wired is obvious, in that we are moving to a fixed mobile converged world, so network service providers must also plan their network equipment purchases accordingly,” said Gartner analyst Patti Reali. “Motorola is placing these capabilities together in order to move in synch with the NSP community.”

The Home and Networks Mobility division will be led by president Dan Moloney.

“The Home and Networks Mobility division will combine cable, wireless, and wireline resources with our networks equipment unit,” said Motorola spokesman Chuck Kaiser. “The realignment will help us sharpen our focus on meeting our customers’ needs.”

Motorola pointed to strong demand for its high-end HD DVR and IPTV devices, as well as the new CableCARD-enabled set-top boxes as highlights within the cable group.

The newly-created division was a bright spot in Motorola’s earnings report with sales of $2.6 billion, which was an increase of 9 percent over the same quarter last year.

Second-quarter net sales dropped 19 percent from $10.82 billion in the same time frame last year to $8.7 billion as the company continues to be dogged by slower mobile phone sales.

The company posted a loss from continuing operations of $38 million, or 2 cents a share, compared with a profit of $1.35 million, or 54 cents per share, in 2006. The sale of mobile devices was $4.3 billion, which was down 40 percent compared to the year-ago quarter. The company shipped 35.5 million handsets, but is losing ground to rivals Nokia and Samsung.

Motorola’s Enterprise Mobility Solutions unit, which includes Government and Public Safety and Enterprise Mobility, saw its revenues increase 42 percent to $1.9 billion.

“This was a challenging quarter for Motorola in which revenue fell short of our expectations due to a decline in mobile device unit shipments,” said Ed Zander, chairman and chief executive officer, in a prepared statement. “However, I am pleased with the solid results within our Home and Networks Mobility and Enterprise Mobility Solutions businesses. Our vision of seamless mobility and the mobile Internet continues to resonate with our customers and partners worldwide. We remain confident that we are taking the right steps to deliver improved performance and to create long-term value for Motorola shareholders.”

Sprint, Clearwire to tag-team on national WiMAX network
By Brian Santo

Sprint Nextel and Clearwire have signed a letter of intent to work together to provide nationwide WiMAX coverage through metropolitan networks that will be separately owned, though the service provided through those networks will be co-branded.

Both companies are already building WiMAX-based networks. Joining forces, they say, will enable significantly greater depth and breadth of services. In order to get a national footprint, Sprint Nextel and Clearwire expect to enable roaming between their respective territories.

In order for the plan to succeed, the two said they need to exchange selected 2.5 GHz spectrum in order to optimize build-out, development and operation of the network.

Under the network build-out plan, Sprint Nextel will focus on geographic areas covering approximately 185 million people, including 75 percent of the people located in the 50 largest markets, while Clearwire will focus on areas covering approximately 115 million people. Initially, the two companies expect to build out network coverage to approximately 100 million people by the end of 2008.

Sprint and Clearwire imagine sharing not only infrastructure and a name for the combined service, but also marketing and distribution.

Sprint expects to provide dual-mode CDMA (mobile phone) and WiMAX services. Clearwire will be able to sell the dual-mode services.

Procera lands $8M in funds for PacketLogic products
By Traci Patterson

Procera Networks Inc. has completed an $8 million common stock offering. Four million shares of restricted common stock were sold.

Procera provides network traffic identification, control and service management infrastructure equipment to broadband service providers and cable operators, including Cavalier Broadband (a CLEC in Virginia); Mesa Networks (a Colorado WISP); Comanche County Telephone, West Texas Telephone, Central Texas Telephone and Unitel (all ILECs); Com Hem (Scandinavia’s largest cable operator); CTR (a LEC in Chile); and Vipfone (a WiMAX provider in Spain).

The funds will be used for Procera's PacketLogic network traffic and service management products. The PacketLogic product family includes the PL5600, PL7600, PL7620 and PL9200 models, which range from 4 Mbps to 2.5 Gbps bidirectional throughput capacity.

Packet8 will take SunRocket’s VoIP customers
By Mike Robuck

Service provider 8x8, the provider of Packet8 residential and business VoIP services, signed an agreement to take over SunRocket’s 200,000 subscribers after SunRocket pulled the plug on Monday.

“8x8 is pleased to be able to quickly transition SunRocket subscribers that opt into the Packet8 service," said 8x8 chairman and CEO Bryan Martin in a prepared statement. "In addition to special pricing, Packet8 is making arrangements with its network service providers to rapidly port SunRocket phone numbers to Packet8's network in order to minimize the disruption that this transition may cause to their communication services.

Packet8 will waive all regular start-up costs that are normally associated with its residential service plans in addition to one free month of service. Whether SunRocket’s former subscribers take Packet8 up on its offer remains to be seen as Vonage and Nuvio are also offering special incentives to SunRocket customers.

Cable VoIP providers are also expected to join the fray for SunRocket’s subscriber base by offering their telephony services as part of their triple play bundles.

Ikanos jumps into GPON-based FTTH market
By Mike Robuck

Ikanos Communications said it was licensing technology from Terawave Communications in order to compete in the GPON-based fiber-to-the-home sector.

Ikanos has licensed GPON physical layer (PHY) technology with Ethernet 2 functionality from Terawave.

Ikanos will combine Terawave’s ITU-compliant GPON PHY technology and the gigabit performance of the Fusiv R Vx170 gateway to form a GPON residential gateway reference platform.

Ikanos will add the GPON FTTH solution to its portfolio, which includes CO and CPE VDSL2 solutions.

Broadband Briefs for 7/19/07
By Traci Patterson and Brian Santo

* Verizon retail wireless subs top 62M 
Verizon Wireless added 1.6 million retail net customers in Q2. Total net customer additions were 1.3 million after 300,000 net reductions in the company’s wholesale business. The company ended the quarter with 62.1 million customers, including 60.1 million retail customers.

* Arkansas telco picks Occam’s apps for network upgrade 
Occam Networks Inc.’s products have been chosen by Arkansas’ Prairie Grove Telephone Co. for the telco’s network upgrade to Active Ethernet. Prairie Grove provides voice and data broadband services to about 10,000 subscribers in the state, and the telco plans to offer video in the future.

Prairie Grove will deploy a combination of Occam’s fiber, DSL and T1 CES blades on a 10 Gig backbone network that will feed 55 wire centers. The five-year goal is to bring ultra-high bandwidth to the telco’s entire customer base.

* Eagle Broadband receives order for IPTV STBs
Eagle Broadband said it received a follow-on order for another 425 MediaPro IP3000HD set-top boxes from its largest hospitality industry customer, which the company has not identified. The customer is expected to continue placing additional orders, pretty much on a quarterly basis, through next March.

* Comcast adds Mexican content via VOD
Comcast now has available, via VOD, content from Alterna'TV’s Mi Cine. Mi Cine has a library of Mexican movies, dramas, comedies, romance and popular rancheras that includes content originally filmed in the 1930s. This content will be available to all Cable Latino de Comcast subscribers through its VOD service beginning Friday (July 20, 2007).

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