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tw telecom Posts High Revenue for 4Q 2011, Joins Amazon Web Service's Direct Connect

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February 09, 2012

tw telecom Posts High Revenue for 4Q 2011, Joins Amazon Web Service's Direct Connect

By Tammy Wolf, TMCnet Web Editor


It’s been a busy -- and momentous -- week for tw telecom (News - Alert), as within a matter of four days, the business Ethernet company scored high marks for its 4Q 2011 earnings, earned a services contract for the state of South Carolina, and now has the Amazon Web Services platform to add to its growing resume.


In becoming an Amazon Web Services (News - Alert) Direct Connect Solution partner, tw telecom will now bring its Ethernet and Intelligent Network services portfolio -- including plans for on-demand and bandwidth services – to the Amazon Web Services platform, which is hosted in the cloud.

The Direct Connect program is well-known for enabling customers to go around the Internet and institute dedicated connectivity between the Amazon Web Services platform and their data centers and offices with a high-speed, protected carrier Ethernet connection that adheres to their applications’ performance needs. In addition, Amazon Web Services delivers affordable, reliable and scalable IT infrastructure services that customers can utilize to power their applications and transition their IT infrastructure into the cloud, all the while giving them the ability to scale to seasonal demand.

tw telecom offers 10Gbps connectivity into the Amazon Web Services platform, meaning customers will have access to high-speed, dedicated Ethernet connectivity supporting cloud-based service delivery.

“As IT departments move more of their applications into Amazon Web Services, the scale and complexity of the environments require superior network connectivity,” said Graham Taylor, senior vice president of Marketing for tw telecom, in a press release. “AWS Direct Connect customers can work with tw telecom to obtain Ethernet connectivity with Intelligent Network capabilities that support the application performance requirements customer’s demand.”

tw telecom’s Intelligent Network services portfolio is comprised of several parts: Enhanced Network Performance Management, or the representation of real-time network performance management information available in the company’s customer portal; and Dynamic Capacity, or bandwidth-on-demand,” which will be introduced later this year.

Meanwhile, on Thursday, tw telecom revealed a jump in revenue for the fourth quarter of 2011, up 8.2 percent to $351.5 million from $324.8 in the same period of 2010, and net income of $16.4 million. For the year, tw telecom posted $1.367 billion in revenue and $57.9 million in net income.

Other highlights included $128.1 million of Modified EBITDA and $25.6 million of levered free cash flow for the quarter. The company’s 4Q profit slipped 6.3 percent, down from $17.49 million to $16.39 million year-over-year, but due to higher expenses. Earnings per share was $0.11

“We delivered another strong annual performance, as we significantly expanded our revenue growth rate, maintained an impressive Modified EBITDA margin and produced continued strong cash flow,” said Larissa Herda, chairman, CEO and president of tw telecom. “At the same time, we strategically invested in the business to advance our network capabilities, deliver new product features and reach more customer locations.”

According to company officials, the significant rise in revenue was primarily due to ongoing strong enterprise revenue growth, specifically a $27.6 million uptick in revenue from enterprise customers. Other key revenue changes included a $.02 million decrease in revenue from carriers due to churn and repricing for contract renewals offset by Ethernet services delivered to wireline and wireless carriers, and a $0.7 million downgrade in intercarrier compensation caused by fluctuations in disputes and rate decreases.

Meanwhile, tw telecom observed an 18.3 percent boost for data and Internet services, thanks to an increase in Ethernet and IP-based products, and a sox percent increase in voice services, which tw telecom says reflects sales of converged and other voice solutions. tw telecom also experienced a 4.5 percent decrease in network services due to churn and repricing for contract renewals particularly in transport services.

“In 2011, we excelled financially, operationally and strategically through a balanced approach to the business that yielded a strong and consistent performance highlighted by our 29th consecutive quarter of revenue growth, ongoing strong margins and continued strong cash flow,” said Mark Peters, tw telecom’s executive vice president and CFO. “In 2011, we were able to invest in our operations and also return value to our shareholders in the form of share repurchases. Our plans for 2012 will be similar to 2011, and include our goals to continue to further expand our revenue growth rate, deliver strong margins and grow cash flow, with a balanced approach and disciplined capital plan.”

As for how tw telecom plans to tackle 2012, Herda added, “For 2012, we expect to continue to innovate and take market share as we focus on delivering better, faster and easier network solutions for our customers’ dynamic network needs. This includes further advancing our new Intelligent Network capabilities and enabling customers’ changing consumption models that drive data center and cloud demand. ”

In addition to business Ethernet as part of its managed services offerings, tw telecom also provides converged and IP VPN services to enterprises and carries throughout the nation and globally. As one of the three top business Ethernet providers in the U.S., tw telecom has successfully connected more commercial buildings to its fiber network than any other communications provider in the market. Thanks to its robust metro fiber networks and ownership of one of the 10 most interconnected IP backbones globally, tw telecom is capable of supporting mission-critical enterprise applications and delivering high-quality customer experiences and improved business productivity.


Tammy Wolf is a TMCnet web editor. She covers a wide range of topics, including IP communications and information technology. To read more of her articles, please visit her columnist page.

Edited by Rich Steeves








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