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News summary for 7/30/07

Mon, 07/30/2007 - 8:52am

Verizon rolls with FiOS in Q2; Buys cell company
By Brian Santo

Verizon reported healthy second quarter increases in revenue and profit, based on subscriber growth increasingly fueled by the expansion of its FiOS fiber network and growth in wireless telephony and data services.

Separately, Verizon Wireless, a joint venture with Vodaphone, said it will buy Rural Cellular Corp. for $2.67 billion in cash plus the assumption of some debt. Rural Cellular has 700,000 customers in – as one might imagine – small markets.

In its second quarter, Verizon reported 167,000 net new FiOS TV customers, pushing it over half a million total (515,000) FiOS TV subs. Verizon also added 125,000 satellite TV customers through its co-marketing agreement with DirecTV. Adding FiOS and DBS video subs together, Verizon now has 1.3 million total video customers.

FiOS is now the source of the company’s broadband growth. Verizon had 288,000 net new broadband connections in the quarter, 203,000 of which were new FiOS Internet subscribers. Verizon now counts 7.7 million broadband connections, of which 1.1 million are FiOS Internet customers.

As of the end of the quarter, the company had passed a total of nearly 7.6 million premises with FiOS, on track with the year-end target of 9 million. FiOS Internet is actually available for sale to 5.7 million premises in parts of 16 states, while FiOS TV was available for sale to nearly 3.9 million premises by the end of the second quarter, up from 3.1 million at the end of the first quarter

Regarding Verizon Wireless, the company had 39.5 million retail data customers in June – a 36.6 percent increase over second quarter 2006. Verizon Wireless now has Revision A (Rev. A) technology throughout its entire wireless footprint, covering more than 210 million people. At the end of the second quarter, 46 percent of the company's 27.5 million retail customers had broadband-capable devices, though Verizon did not say how many of those were actually subscribing to the service.

Verizon reported second-quarter 2007 earnings of $1.7 billion, or 58 cents in fully diluted earnings per share (EPS). This compares with reported EPS in the second quarter 2006 of 43 cents before discontinued operations.

Verizon's total operating revenues grew 6.3 percent to $23.3 billion, compared with the second quarter of 2006.

Vyyo makes cuts to boost sales sector
By Traci Patterson

Vyyo Inc., as it shifts from a development phase to emphasize sales and product marketing, reduced its workforce by about 16 percent in Q3, with cuts coming from the engineering sector.

Fewer than 20 people have been affected, the company said. The last available employee count was 139, in both the U.S. and Israel, at the end of 2006. About $400,000 will go toward severance payments and related costs.

Vyyo has been expanding its sales group in conjunction with increasing trials and deployments of the company’s UltraBand spectrum overlay platform and T1 over HFC solution. Today, the company announced the appointment of Jon Koval as vice president of sales.

The 25-year industry veteran will be responsible for sales activity, at both the corporate and system levels, with Time Warner Cable, Charter Communications and Bright House Networks. Koval joins Vyyo from BigBand Networks, where he was regional VP of sales and responsible for the company’s TWC account.

“We have begun to shift our emphasis from development toward customer-facing activities to meet cable’s increasing interest in long-term solutions that can compete effectively with telco fiber,” said Wayne Davis, Vyyo’s CEO.

DOCSIS 3.0, PacketCable 2.0 components pass ITU study group muster 
By Mike Robuck

CableLabs recently announced that most of the DOCSIS 3.0 specification and key elements of the PacketCable 2.0 specification were given consent status by an International Telecommunications Union study group.

The consent status by the ITU-T is a stepping stone for both specifications becoming full-blown international standards. The meetings of Study Group 9 took place in mid-June in Singapore and were chaired by CableLabs President and CEO Richard Green. The elements that were agreed upon by SG9 were forwarded to full ITU-T membership for acceptance as ITU Recommendations.

“The June meetings were very important. Once again the world has embraced innovative technologies that were originated by North America’s cable industry with strong support from other countries and made them standards for the world to implement,” Green said, in a prepared statement.

The DOCSIS 3.0 specification establishes ways for cable companies to tie multiple 6 MHz transmission channels together to deliver data at speeds in excess of 160 Mbps to consumers, and at 120 Mbps or more upstream from consumers. The specification also includes support for IPv6, which will open up more IP addresses to cable operators such as Comcast who will use them on a variety of devices and new IP-based services.

The initial set of IPCablecom2 Recommendations, covering the core elements of the PacketCable 2.0 architecture, was consented by the study group in 2006. The additional standards consented during the Singapore meeting added Home Subscriber Server (HSS) functionality to the architecture. The HSS provides key mechanisms needed to support subscriber mobility and roaming.

Report: Cable builds on VoIP superiority
By Mike Robuck

According to a report released today by The Yankee Group, cable operators are still the leaders of the pack when it comes to VoIP deployments.

The Yankee Group report said that cable’s 167 percent growth rate for 2006 was the largest in the VoIP sector.

The study also forecast that the majority of residential subscribers will get their service bundles from cable companies by 2011. While single service VoIP providers, such as SunRocket and Vonage, have struggled, there is the potential that cable could face stiff competition in the VoIP arena from AT&T and Verizon with their respective fiber solutions, according to the Yankee Group.

Overall, VoIP adoption grew more than 125 percent last year with more than 9 million customers in the fold. The substantial growth rate was led by cable operators, who have utilized their triple play bundles as a means for signing up more subscribers to their telephony services.

"The U.S. consumer VoIP market continues to evolve and propagate," said Patrick Monaghan, Yankee Group Consumer Research senior analyst, in a prepared statement. "The disruptive impact of global connectivity will continue to change the VoIP market - making it even more difficult to measure. Despite some growing pains we've seen in the VoIP market recently, the market continues to grow and has significant potential as ILECS begin to migrate and create increased competition for both cable MSOs and broadband VoIP providers."

The report also said VoIP is evolving beyond residential phones by being embedded into Web-based ads, Web site assistance and other click-to-call solutions. The Yankee Group predicts that the number of VoIP dual-mode mobile phones will increase from 913,000 last year to 22 million in 2011.

Qwest beefs up HD lineup
By Mike Robuck

Qwest announced today that it has added new HD programming to its video service in Phoenix. The new HD channels include Fox Sports Net Arizona, Universal HD, Golf/VERSUS HD, ASUtv and KPHE-TV. The new HD channels will be available to Qwest’s HD tier subscribers at no additional charge.

While Verizon and AT&T have jumped into the cable TV pool with both feet, Qwest has only dipped its toes in to date. Qwest CEO Richard Notebaert, who is retiring, has said this year that the company will look at doing more video deployments if there’s customer demand. Qwest does offer a video service in a suburb near Denver in addition to its Phoenix deployment.

Broadband Briefs for 7/30/07

* Amedia gives stockholders operational update
By Traci Patterson

Amedia Networks Inc., which provides media gateways for the distribution and management of ultra-broadband triple-play services, said it has shipped equipment to Motorola for U.S. residential trials of the jointly developed MIPX home gateway, has renegotiated the Motorola manufacturing agreement from a capital intensive production commitment to a software licensing agreement, and has launched a new product development program to bring video content from Web sites to the TV set, without the need for a computer.

* Liberty may jump into Virgin Media auction
By Brian Santo

Liberty Global is considering a bid for Virgin Media according to the Financial Times, which quotes Liberty Global Chairman John Malone saying his company was "doing our homework" looking into a possible acquisition.

Virgin Media has been up for grabs – “grabs” being defined as about $23 billion – since Carlyle Group made an offer on the company earlier this month.

* FiOS TV gets two more N.Y. franchises
By Brian Santo

The town of Islip and village of Floral Park have both given Verizon the green light to offer its FiOS TV service; the Town of Islip covers 21 individual communities. The Board of Trustees for both municipalities granted video franchises to Verizon last Friday (July 27). These votes bring to 51 the total number of New York communities that have approved video franchises for Verizon, the company said.

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