Recently in mergers Category

Today BroadSoft announced we have acquired Sylantro Systems Corporation. As one of our most formidable competitors of the last ten years, we have both succeeded in delivering high-quality products and superior customer satisfaction.

We believe the Sylantro acquisition is a tremendous opportunity that will allow us to continue our tradition of developing comprehensive solutions for hosted telephony and multimedia services. We will retain Sylantro's Synergy Multiplay Application Feature Server platform, and will begin to immediately integrate Sylantro's development team into our current engineering organization. We also have plans to actively incorporate Sylantro's Synapps Web 2.0 initiatives with our Xtended program.

Over the past several years, BroadSoft has established itself as the VoIP platform of choice through our unwavering focus on serving our customer needs. We look forward to continuing to work with you to deliver industry leading VoIP application services.

Should you have any immediate questions about this transaction, please feel free to contact me. In the meantime, I look forward to continuing our strategic collaboration.

Sincerely,

Ken Rokoff
VP of Business Development

• Cbeyond Reports $90.2 in Q3 Revenues, up 25 Percent
• Sprint Nextel $600 Million of Debt Coming Due Is Only One Worry - but they have $3B in cash??? Use it to buy a cool phone - T-Mobile, AT&T and VZW are killing Sprint because they have better phones. Handsets drive cellular. Period.
• EarthLink has a $54.7M profit last quarter!
• I forget that taxes play a huge part in mergers - that's why Embarq & Windstream didn't merge; it plays a part in XO's life (NOL's); and it certainly played a role in the VZ New England spin-off to Fairpoint.
• Sprint and Cogent re-connect but continue fighting
• JD Power's ISP Ratings are in (here). Cablevision, WOW!, Cox and bright House won.

Fresh off of buying Wayport for global wi-fi expansion, AT&T buys Centennial Wireless - $944M for 1.1 million cell subs.  AT&T is either at the point that they have to keep buying to keep the growth going or they have Monopoly Madness.

Well, AT&T wanted to be known as a wireless company, so that explains AT&T buying Wayport today for approximately $275 million in cash.  Wi-Fi is the new battle ground between Sprint and the Pivot posse and the RBOC's.  Wayport manages about 12,000 hotpsots including McDonald's.

AT&T figures with millions of devices utilizing a wi-fi signal, they should own that transit. Before cable does or Sprint/Clearwire/Xohm does. 

If you want the snarky post about this, go here.

The FCC voted today too. They took the Inter-Carrier Compensation and USF off the agenda, much to Martin's dismay.

"Federal regulators have approved a plan to open up unused, unlicensed portions of the television airwaves known as "white spaces" to deliver wireless broadband service." [Y! news] [fcc.gov]

FCC approved, with conditions, the mergers of Sprint-Nextel/Clearwire and  Alltel-Verizon. [fcc.gov]

FCC opened an investigation into the pricing policies of major cable operators and Verizon. "The agency wants to ensure the companies' customers are getting treated fairly, FCC Chairman Kevin Martin said in an interview with The Associated Press." [Y! news]

The FCC is holding a meeting on Nov. 4. On the agenda: Inter-Carrier Compensation, Alltel-VZ merger, Clearwire-Sprint merger, and a vote of White Spaces. Lots of heavy lifting on this agenda. Martin wants to give his pals at VZ one more gift before he goes.

The VZ-Alltel merger is big, but the topic that can really rock telecom is the Inter-carrier Comp issue, which has been a stagnant FCC docket for years.

If companies can show high costs, they will continue to benefit from the subsidy program. Martin also wants to eliminate wireless providers' right to claim government subsidies for offering service in hard-to-reach areas. Martin wants all companies, wireless included, to show they have incurred losses in providing rural service before they can collect the subsidy. Without those changes, Martin worries that the subsidy fund will collapse of its own weight and rates will go up anyhow. [CNN]

It depends want the Compromise looks like -- and it will be a large compromise. Democrats want one thing. Republicans another. Cellcos versus Wireline. Rural versus Urban. Inter-Carrier Comp even bleeds into the USF issue. How? Because rural carriers count on both Universal Service Fund subsidies AND rather high call termination charges to keep afloat.

Why now? The ISP inter-carrier comp rule has been in court for six years. Earlier this year, the DC Court ruled that the FCC had to get off the pot:

The court set the deadline for an order from the FCC at November 5, 2008, six months from the date of oral argument, stated it will not grant an extension and warned that if an appropriate order is not timely issued, it will vacate the interim inter-carrier compensation rules.

Consumer groups are against another largess for the monopolies at the expense of the ratepayers.

The head of the Federal Communications Commission wants a massive overhaul of the fees that phone companies pay each other when they connect calls. Supporters say the reforms will help fund improved broadband Internet access for rural America, but consumer advocates question how much the plan will raise people's phone bills. "This could be potentially a billion-dollar giveaway to phone monopolies, paid for out of consumers' pocketbooks," said Chris Murray, an attorney with Consumers Union. [AP]

Intercarrier comp is how the various phone companies pay each other for traffic. VoIP providers and cellular carriers, especially Sprint, would like a fairer shake. The old RBOCs would like the Rural LEC's to stop getting so much money. (see Free Conference services not getting paid by RBOCs).

The National Telecommunications Cooperative Association, which represents small phone carriers, told FCC officials earlier this month that a new rate of $0.0007 per minute puts many of their members' livelihoods at risk.

And then there is the White Spaces issue. When broadcasters make the DTV transition in 1Q09, there will be unused spectrum that the Wireless World would like to use for its own bandwidth needs. However, due to bleed over (interference) with cordless microphones and other broadcasting devices, the NAB is opposed. [see dailywireless]

All of this is at one meeting while America votes.

Nuvox is out kicking tires to see who they can buy. Rumor has it that Greenville-based Nuvox is looking to buy One Communications in the Northeast to expand their footprint, especially their MPLS reach. (I didn't know Nuvox sold MPLS. I thought they were just a cheap Integrated T1 supplier).

Rumor also has it that One Comm. is having problems. Provisioning being one of them, which usually leads to sales declining. Customers don't like install issues and neither do agents, since it costs them time - time they need to be out selling to make up for the shrinking commissions. (The shrinking commissions correlate to the shrinking prices).

Nuvox is coming off its merger with FDN last year that created a good amount of internal strife as former Nuvox folks didn't relate well to FDN people. Maybe that has been straightened out. Here's hoping another merger will have better integration.

UPDATE: In another rumor, it's Nuvox will get bought by XO to increase its VoIP customer base. (And because privately held Nuvox has debt coming due end of 2008).

In 2007, Cisco integrated Jabber components into its conferencing platform. Today, Cisco buys Jabber, "an open-source IM and presence protocol used by Google Talk and Gizmo, for an undisclosed sum".  On our panel at IT Expo, The Role of Apps in VoIP, we talked about Gen Y not liking to talk on the phone. My conclusion is that you will need to incorporate XMPP and XML to enable chat, instant messaging, SMS messaging to IP phone - all to communicate with employees, customers, vendors - without talking on a phone.

A couple of clients use GenBand. They are in for a shock today as Broadsoft announced "their acquisition of GENBAND's M6 Communication Applications Server, formerly VocalData, product line and related customer base." Broadsoft will now have 435 client companies.

Broadsoft says, "Yes, a bit of consolidation and widening of partnerships .... I think it will serve the M6 customer base very well."

On a CLEC listserv, the discussion recently was about this space - the Hosted VoIP Application Services space. Now it comes down to Sylantro and Broadsoft really. This probably means more folks will do "proprietary" systems like VOX and FreedomVoice. It is certainly an industry of smaller players who can't fork over the money for the Broadsoft system; like to Do-It-Yourself; and dislike licensing. There is the scale factor. Obviously, Sylantro and Broadsoft can demonstrate scale, but can a proprietary system or an Asterisk-based system? Probably not. But then it may not have to. Many of the Asterisk-based providers won't see an issue until there are more than 300 simultaneous calls going through the box. That means at least 1200 lines. That is a munch of customers. More than many VoIP Providers get. (Which is why the VoIP Orig/Term market is so fragmented as well).

We can discuss this more at IT Expo West in 18 days. (Join the Facebook group). Ping me about doing dinner on the 16th. Have a great weekend!

Over at Xchange magazine, Bob Wallace writes about the possibility of Ma Bell buying one of the DBS companies. Since Murdoch owns DirecTV and he fought so hard for it, I don't see him giving it up.

However, DISH did split its business into wholesale and retail divisions to make room for a sale. And they did have a subscriber loss this quarter. But with $2.9B in quarterly revenue, how does Ma bell afford it after all its acquisitions and its CAPEX spending needed to complete U-Verse and Internet backbone builds?

Both DISH and DTV provide service to RBOCs.

Does Ma Bell want to go back into the TV game? Remember that AT&T, the IXC, bought TCI (Liberty Media) and MediaOne in 2000? It was a mess.

There's a reason that MSO's outsource digital phone service. Stick to your knitting. Bell-heads barely understand IP let alone multi-cast and DOCSIS.

My prediction: Ma Bell will make a bid for DISH but it won't win it.