Company News & Earnings

Siemens CEO dropped in scandal fallout

Wed, 25 Apr 2007 20:01:38 -0400

A few months ago, the big story in telecom was the Siemens scandal, where several all sorts of internal financial shenanigans came to light and several high-level execs were arrested on charges of bribery. The fallout, which involved the industrial giant's telecom divisions, held up the spin-off of the company's carrier division to a joint venture with Nokia. Now the other shoe has dropped: Despite strong financial results, Siemens's board of directors has declined to renew the contract of CEO Klaus Kleinfeld. A new deal had been widely expected but reports say that some of the board members, themselves survivors of scandals at their own companies, thought that giving a new contract to an executive currently under investigation would call their own governance into question.

For more about the fall of Siemens's Kleinfeld:
- see the announcement from Siemens
- read this article from The New York Times

Related Articles:
Former Siemens telecom head arrested in scandal. Report
Siemens corruption probe widens: $556M. Report
Siemens in $250M corruption scandal. Report
Analyst urges caution on Siemens phones. Report

Vonage gets its stay, launches astroturf site

Wed, 25 Apr 2007 20:01:37 -0400

It's been a big week for Vonage--and at last some of the news is good. A federal appeals court stayed a trial court's injunction that would have prohibited the company from signing up new customers. The stay will remain in effect until an appeal of the Vonage's patent loss to Verizon heard. That appeal will happen sooner rather than later: June 25, which is legal terms is practically tomorrow. Vonage is also trying to rally public support, kicking off freetocompete.com, a corporate site designed to get its side of the patent story out. (The term for this kind of corporate-sponsored grassroots effort, by the way, is "astroturfing." It's not a complimentary term.) The only sign that Vonage is backing this--aside from the obvious one-sidedness of the content--is a small copyright note at the bottom of the web pages. And lastly, Vonage unveiled Vonage Text, which translates voicemails to text, which it then e-mails to you.

For more about Vonage's court win:
- read this article from the San Jose Mercury News
- see this website for more about Vonage's astroturfing
- read this article from Voxilla for more about Vonage Text

Related Articles:
Vonage granted stay, still in hot water. Report
Vonage endures. Report

Vonage CEO has a sketchy past

Sun, 15 Apr 2007 20:01:37 -0400

Long-time Vonage-watchers may have experienced a quick shot of déjà vu with last week's restoration of Jeffrey Citron as interim CEO. It's Citron's second time around as CEO, an office he held from 2001 until early 2006. But before he got to Vonage, Citron had hit some heavy waters with the Securities and Exchange Commission. As CEO of Datek Online Holdings, he agreed in 1999 to a $22.5 million settlement in a securities fraud investigation having to do with NASDAQ's "pink sheets" trading system. As part of the settlement, he neither admitted or denied the charges. There had been speculation that Citron brought now-ousted successor Michael Snyder in to allay fears of underwriters skittish about Citron's background.

For more about Citron's past and present:
- read this article from Network World

Related Article:
Vonage CEO steps down. Report

Cisco wants high-end and low-end business

Sun, 15 Apr 2007 20:01:36 -0400

Cisco doesn't want to play nice with others, at least not in the reseller channel. Charlie Giancarlo, its chief development officer, told the company's distribution partners last week that if a VAR is selling Cisco gear and someone else's lower-end equipment, the company wants it to drop the other product line and sell Cisco's Linksys, instead. In addition, Cisco is starting to put its own stamp on lower-end gear to, introducing a Cisco-branded VoIP system for 16 or fewer users. Previously, Cisco bottomed out at 20 users and Linksys picked up the rest of the small-business market.

For more information about Cisco's distribution strategy:
- read this article from CRN

Related Articles:
Cisco to pitch at the SMB VoIP market. Report
Cisco buys WebEx for $145,000 per customer. Report

Genband/Tekelec a done deal

Wed, 21 Mar 2007 20:01:35 -0400

We wrote last issue about rumors of Genband buying Tekelec's switching business. Monday evening, Genband execs declined to comment. Tuesday afternoon, they handed around a press release announcing the sale. Tekelec got into the switch business by buying Santera Systems and Taqua; it's getting out of the business by essentially selling those assets and its SSG group to Genband for just under 20 percent of Genband. Tekelec's taking quite a haircut: the company said it expects to realize a net loss of between $55 million and $70 million on the sale (although, by the miracle of tax accountancy, it doesn't expect it to much effect on its cash holdings. The deal is expected to close next month.

For more information about the Genband Tekelec purchase:
- see Genband's release

Related Article:
Genband buys Siemens DCO products. Report

VON: Is there a Genband/Tekelec deal in the works?

Sun, 18 Mar 2007 20:01:38 -0400

The media gateway business is robust and competitive, but there may be one less player in the days to come. There are whispers that Genband, which for the last couple of years has been in acquisition mode, is about to buy the switching business of Tekelec. Tekelec, which is active in the signaling and session control business as well as number portablity and hosted VoIP, has been looking for a buyer for several months; there were reports that Ericsson or Alcatel-Lucent had been kicking the tires. I'll be meeting with Genband at VON, and I'll pass along what they say.

For more about the rumored Genband/Tekelec deal:
- read this article in Light Reading

Related Articles:
Genband buys Siemens DCO products. Report
Tekelec picks active IMS FMC testing vendor. Report
Tekelec's IMS brew. Report

Building value for VoIP investors

Thu, 22 Feb 2007 19:01:38 -0500

VoIP might be a good business to be in, but it might not be such a great business to invest in. Although Skype's metrics are good--more subscribers are paying more money each--the numbers are small. Skype brought owner eBay 30 cents per subscriber last quarter; eBay's core auction business netted $5.64 per subscriber. And when Vonage reported its most recent quarterly results, its stock sagged 9 percent, even though the 42-cent per share loss was in line with expectations. The trouble is that it's costing Vonage $579 to gain each new customer, up 65 percent in six months. That's the wrong direction on a trend line.

For more on VoIP as an investment:
- read this article from The Street

Level 3 restructures its debt

Thu, 04 Jan 2007 19:01:34 -0500

Level 3 is raising money. It just went to the bond market to borrow $650 million at 9.25 percent interest, a sum that's in addition to another bond offering back in October. A lot of the cash (though the company doesn't say exactly how much) is going to pay off 10.75 percent loans--not unlike paying off a higher-interest credit card with a lower-interest one. The rest of the money will go to build networks or acquire other ones.

For more information about the Level 3 bonds:
- read this article in The Hosting News

Related Articles:
Level 3 powers EarthLink consumer VoIP. Report
Level 3 acquiring ICG for $163M. Report

Siemens embezzlement scandal

Mon, 18 Dec 2006 19:01:35 -0500

I've gotten some email over the last couple of weeks complaining that I'm being too hard of Siemens. I don't think so. Siemens is one of the biggest telecom equipment companies in the world. A half-billion dollars embezzled and possibly paid in bribes. A former telecom division president arrested, the CEO's office searched by police. One deal to spin off a wireless infrastructure division put on hold. Other plans to divest an enterprise telecom division on the rocks until this is all sorted out. No, this developing story may be uncomfortable, but it's plainly one of the biggest and most important telecom stories of the year.

Thaw in the FCC's AT&T deadlock?

Mon, 04 Dec 2006 19:01:38 -0500

There's news of a possible ice break in the stalled AT&T/BellSouth merger. The FCC has been deadlocked 2-2 on the deal, which was unveiled all the way back in March. Commissioner Robert McDowell, holder of the fifth vote, has been recusing himself because of earlier work lobbying for COMPTEL, which opposes the merger. However, FCC chairman Kevin Martin has asked the regulator's general counsel to see whether McDowell might be able to vote after all. There's a chance that the general counsel could decide that the government interest in an up-or-down vote outweighs the government interest in a recusal. All the state regulators who would be affected by the merger have OKed it.

For more information about the FCC and the AT&T/BellSouth merger:
- read this article from Broadcasting & Cable

Siemens in $250M corruption scandal

Thu, 30 Nov 2006 19:01:38 -0500

There has apparently been a fair amount of coverage of this in Europe, although U.S. news outlets have been somewhat (though not totally) quiet about it. It seems that the enterprise telecom part of Siemens is embroiled in a significant financial scandal. To date, six employees have been arrested on charges of embezzling €200 million to pay kickbacks and bribes. (How is it possible to embezzle $250 million, anyway? Don't these people have any financial controls?) Police have raided 30 Siemens locations--including the CEO's office--and have seized about 36,000 files. Among the contracts being looked at is the one for the security system at the 2004 Olympic Games in Athens. Remember, Siemens is trying to sell this division; this scandal, along with ongoing public concern about the collapse of the Siemens' former cell phone group after its sale to BenQ, is not helping.

For more information about the Siemens embezzlement scandal:
- read this article from Heise Online and
- read this article from Telecommunications Industry News

Spirent sets stage for boardroom showdown

Thu, 30 Nov 2006 19:01:37 -0500

Siemens isn't the only company experiencing end-of-year executive turmoil. Spirent, a testing and measurement company that's shoulders-deep in the IMS market (among others), is having a boardroom fight with an activist investor. Two non-executive board members have said they will resign if shareholder Sherborne Investors gets to name four board members at an extraordinary shareholders' meeting slated for December 22. Non-executive board member and Former Ericsson CEO, Kurt Hellstrom was incorrectly identified as CEO of Spirent in an early version of this article. Sherborne owns 15 percent of Spirent, while other institutional investors who are backing Sherborne own another 15 percent--getting to name four directors would basically put those investors in control of the company.

For more information about the Spirent boardroom fight:
- read this article from Light Reading

Former employees buy Zultys in bankruptcy auction

Thu, 02 Nov 2006 19:01:36 -0500

Zultys Technologies, a VoIP hardware company abruptly driven into Chapter 11 this summer, was bought at auction this week by a company founded by a group of its former engineers. Pivot VoIP paid $2.6 million plus the assumption of some debt for Zultys, which owed $2.75 million in back wages and more than $41.8 million in unsecured claims. Zultys' former president has pressed for a quick auction, hoping to get raise enough money to start again. But he was outbid by his former employees, who were backed by the Israeli solutions provider Telrad Connegy. Zultys Web site remains up and active--though there is no mention of the bankruptcy or its resolution.

For more information about the Zultys bankruptcy:
- check out this TMCNet article

Intel and Siemens getting together on VoIP

Thu, 14 Sep 2006 20:01:36 -0400

Intel and Siemens are tying the knot on a VoIP technology development that sounds very IMS-ish. It's a little hard to tell from the report linked here, but it sounds like the two tech giants are particularly going after the secure wireless market in large-scale enterprises. At a minimum, the announcement seems to be that Intel will put its latest line of processors in Siemens' HiPath products. Siemens, of course, is in the process of selling its TDM business and sticking with its IP telephony business.

For more information about the Siemens/Intel agreement:
- read this article from Reuters via CNet

VON: Brix gets data from 300 million TI DSPs

Thu, 14 Sep 2006 20:01:34 -0400

Surely you remember Brix Networks, the quality testing company. They're the ones who said a little while ago that VoIP quality was pretty bad and getting worse. They've got a deal with Texas Instruments that will give them access to endpoint quality data from each of the 300 million TI DSPs deployed in the market. TI's PIQUA system, embedded in each of those DSPs, automates the gathering of real-time quality data; the deal with Brix gives Brix's gear access to all that information.

For more information about the Brix/TI agreement:
- read this press release from Brix Networks

Google and eBay ally on VoIP

Mon, 28 Aug 2006 20:01:37 -0400

Here's an alliance that I'm not quite sure I understand. You know, of course, that eBay bought Skype not long ago--and that stock analysts have been puzzled at the billion-dollar-plus price tag. And you know that Google has its own beta VoIP service Google Talk. You may also know that Google has a payments infrastructure that competes with eBay's PayPal. So there's news now that eBay and Google are partnering. Google will provide AdSense ads on eBay outside the United States (which must delight eBay vendors). But here's the interesting part: Skype and Google Talk will provide "click-to-talk" service on Google's ads. Presumably, people who don't subscribe to Skype would get shunted to Google Talk. The service starts next year.

For more information about the eBay/Google deal:
- read this press release from Google

Sprint expands on JV with Time Warner Cable

Thu, 03 Aug 2006 20:01:38 -0400

Sprint Nextel announced a major five-year agreement to expand on its joint venture with Time Warner Cable. The deal sees Sprint provisioning the cable MSO's "digital phone service" in an additional 14 service areas. The companies also claim that Time Warner will soon use Sprint Nextel's IP network to offer VoIP services across most of its footprint, an approximate 28 million homes. That expansion, however, will exclude Time Warner Cable's system in New Hampshire and Maine. Sprint currently services more than 1.2 million VoIP subscribers for cable companies and over the next year it expects to push that figure up to 2.5 million VoIP subscribers.

For more on Sprint's expanded deal with TW:
- take a look at this press release from Sprint

SingTel CEO quits

Mon, 24 Jul 2006 20:01:35 -0400

I suspect that this is not the last we're going to hear about this one. The head of Singapore's SingTel, the largest telco in Asia, is stepping down. Lee Hsien Yang, 48, is the younger brother of Singapore president Lee Hsien Loong and has been SingTel's CEO for 11 years. No reason was given for the resignation, which will be effective as soon as a replacement is found.

For more information about SingTel's management change:
- read this article in America's Network

Aussie VoIP partners wind up in court

Thu, 06 Jul 2006 20:01:35 -0400

One bid to roll out VoIP service in Australia has wound up in court. Softswitch developer Transcom is suing the publicly traded ISP Chariot over the apparent collapse of a joint venture that would have provided VoIP starting late last year. Transcom says Chariot never came up with promised cash for the venture but continued to tell the public that the service was coming soon. Chariot says the whole thing is a misunderstanding over a wholesale distribution agreement. Now a judge will decide.

For more information about the Transcom/Chariot dispute:
- read this article in VoIP News

Nokia and Siemens merge infrastructure biz

Mon, 19 Jun 2006 20:01:38 -0400

Siemens and Nokia are putting their telecom divisions together, continuing a consolidation in the infrastructure business and creating a European tech behemoth. The Finnish Nokia is best known for his cellular handsets, but about 20 percent of the company's €34 billion in sales comes from GSM infrastructure equipment. Siemens's telecom business, based in Germany, is a leader in the fixed-network business and claims to be the number one vendor of fixed-network IMS switches. The combined company, to be called Nokia Siemens Networks, will be equally owned by the two parents but will be headquartered in Finland. Nokia will have a majority of directors. Pro forma sales for the combined company for 2005 were €15.8 billion. Pending regulatory approval, the companies expect the venture to close before the end of this year.

For more information about the Siemens/Nokia deal:
- read this article from the AP