Headlines - JUNE 11, 1999
Top Stories
BRAZIL
EUROPE
FIBER OPTICS
INDIA
Top Stories
Justice Department Grants Approval of Patent Tool for DVD Technology
The Justice Department has granted the approval to six manufacturers to jointly license patents for digital videodiscs and players. These six manufacturers include Nintendo, Matsushita Electric Industrial, Toshiba Corp. Hitachi Ltd., Time Warner Inc. Under the terms of an agreement approved by the Justice Department’s antitrust division, companies that manufacture DVD-video and DVD-ROM discs and players can use the technology owned by the six businesses. By combining the patents held by the six companies, the cost of DVD technology will be significantly reduced, while raising little possibility of competitive harm, said Joel I. Klein, assistant attorney general in charge of the department’s antitrust division. These companies and four others have established specifications for players to read the discs and convert them into images for screen display.
Lockheed Martin’s Recent Financial Struggles Hinder Proposed $2.7 Billion Bid for Comsat Corp.
Lockheed Martin, which has suffered a host of recent financial struggles, could be forced to renegotiate the terms of the agreement or possibly abandon its $2.7 billion bid to acquire Comsat Corp. Comsat officials expressed their concern that Lockheed’s problems could further complicate the long pending agreement following the company’s announcement on Wednesday that earnings would be lower than expected through the end of 2000. This acquisition is at the core of Lockheed’s Chairman Vance Coffman long-term growth strategy. Also, the deal is one of the major initiatives to expand its telecommunications and commercial space business, which Coffman reiterated that position to analysts two days ago. The $2.7 billion deal involves a two-stage process that calls for 49 percent of the purchase price to be paid in cash and the remainder in Lockheed stock. However, the company’s faltering stock price has meant a 16 percent reduction in the total value of the proposed transaction since the
agreement was announced in September. Upon the announcement of the company’s earning projection on Wednesday, shares closed down at 14 percent.
Ireland Government to Launch Privatization Offer for Telecom Eireann
The Ireland government has launched a privatization offer for the partial sale of Telecom Eierann Sunday, revealing the percentage of the Telephone Company will be offered to companies and the public. Analysts predict that the government could sell between 25 percent and 50 percent of its holding, with a majority saying that the figure will be approximately 35 percent. If this deal is successful then the government could earn as much as $4 billion. The privatization is the largest in Irish history and will give Telecom Eireann the fourth largest market capitalization on the Irish stock exchange. Currently, Telia of Sweden and KPN of the Netherlands jointly own 20 percent of the company and have an option to purchase and additional 15 percent.
BRAZIL
Brazil's Tele Centro Sul Spends 62 Million Reais on Staff Cuts
Brazil's Tele Centro Sul Participacoes SA will take a 62 million reais (US$36 million) charge against second-half earnings to cover the cost of firing one-tenth of its work force. Tele Centro Sul, the No. 3 fixed-line phone company, which serves Brazil's southern region, last week dismissed 1,300 employees from its 11,400 staff. The costs include payment of extra benefits to dismissed staff, temporary extension of health insurance and help in finding new jobs. The costs will be charged against second-half earnings results.
Telesp Celular to invest R$1.2 Billion in 1999 to Expand Customer Services in Sao Paulo
Telesp Celular is expected to invest a total of R$ 1.2 billion in 1999 to expand customer services in the state of Sao Paulo. Company President Mateus made the declarations upon leaving a meeting of the National Telecommunications Agency (Anatel), which opened the round of meetings between mobile telephone operators and the organ regulator, to evaluate service quality. Mateus says Telesp Celular is expected to increase its base of subscribers from the current 2 million, which represents 55% of cellular users in the metropolitan area of Sao Paulo, to 2.7 million subscribers by the end of the year. Telesp's target is to go from its present 8% of the coverage in Sao Paulo to 13%.
EUROPE
Cable & Wireless Optus to Forms Joint Internet Venture with ExciteHome
Cable And Wireless Optus PLC unit C&W Onuap Ltd. Plans to form a joint venture with US Internet company ExciteHome. Optus said the venture, which will be marketed under the name OptusHome, aims to offer high speed Internet access services.
AT&T, British Telecom and Nortel Reportedly Reach Agreement on Next Generation CDMA Standard
AT&T, British Telecom, Nortel Networks and LM Ericsson have reached an agreement on a single global CDMA standard for the next generation of mobile phones. Following the deal, a group of operators will announced that they will work to establish a common framework for standards based on Internet protocol for next generation wireless systems. The agreement, which was reached at a meeting in Toronto of the Operators Harmonization Group, will apply to third-generation wireless communications systems, also known as Universal Mobile Telephone Services. The agreement is supported by more than 30 wireless operators and 12 equipment suppliers serving 75 percent of the world’s customer base.
Olivetti to Pay Telecom Italia Shareholders on June 23
Olivetti SpA announced that it would pay the Telecom Italia SpA shareholders on June 23, 1999 that tendered their shares to its unit Tecnost Mael SpA during the public offering, which finished on May 21. Olivetti and Tecnost Mael SpA’s capital increases will begin on June 21 and finish on July 9.
Viag Interkom to Pay Deutsche Telekom 1 Billion DM to Use Mobile Phone Network
Viag Interkom GmbH and Co., the joint telecommunications venture between Viag AG and British Telecommunications PLC, is to pay Deutsche Telekom AG almost 1 billion DM to us its mobile phone network. Viag Interkom chairman Maximillion Ardelt said the deal "saves us two years’ time in the expansion of our network and one billion marks in investment," Ardelt added that he expects the European Commission to approve the arrangement in June. The deal between Viag and Deutsche Telekom was originally announced in March.
Belgacom to Reduce Tariffs on Some European Calls to 16 Bfr a Minute by July 1
Belgacom announced that it will reduce its tariff to a number of European countries to 16 bfr per minute from 21 as if July 1. The tariff applies to calls made from Belgium to Austria, Finland, Greece, Ireland, Norway, Portugal, Spain, Sweden and Switzerland.
FIBER OPTICS
Telemonde and TGNS to Develop "bandwidth risk management" Products
Telemonde Inc. has entered into a joint partnership with Trans Global Network Services ("TGNS") of the UK, a London based facilities-based company specializing in bandwidth risk management. The deal, which the two companies claimed was the first of its kind in the market for international fiber optic capacity, would initially involve the supply by Telemonde of US$6 million of capacity to TGNS. In addition, the two companies said they would pool their product and marketing expertise in the joint development of a number of innovative new bandwidth risk management instruments on the key Transatlantic and European routes.
INDIA
India’s Department of Telecommunications Finalizes Cellular Services Plan
The Department of Telecommunications (DoT) is finalizing plans to provide cellular services. The New Telecom Policy permits DoT to provide cellular services, but it will have to pay the same amount of license fee as the private operators. Taking advantage of its all-India network, DoT would provide a single number to subscribers who could use receive and make calls from anywhere in the country. Subscribers will also have the benefit of paying only local tariff for calls made from anywhere in the country. In contrast, subscribers of the private operators have to pay STD rates for local calls made in a city outside the territory of the provider. DoT will also have an edge over rivals on infrastructure equipment, as the global prices of equipment have fallen in the last few years. In the first phase of the project, DoT will provide services in 17 cities including, Bangalore, Hyderabad, Chennai, Calcutta, Chandigarh, Jaipur, Lucknow and Bhopal.
Telecom India Investment Plans Total Control of Hutchinson Max India
Telecom India Investment Ltd. (TIIL), a company jointly promoted by Kotak Mahindra group and CGP Indian Investment Ltd., plans to take total control over Mumbai cellular operator Hutchinson Max India, by acquiring the remaining 10 per cent stake in Max Telecom. To finance the acquisition, TIIL has sought a FIPB&Mac226;s permission to issue the preference shares worth INR 1.65 billion to CGP Investment LTD&Mac246; Hutchinson Whampoa subsidiary. Though Hutchinson Whampoa&Mac226;s direct and indirect holding would go up to 73 per cent after the acquisition, it would not be violate of the cap on foreign equity holding in the telecom sector, as TIIL is legally defined as an Indian company.
Headlines - JUNE 9, 1999
Top Stories
ADSL
EUROPE
FIBER OPTICS
WIRELESS
News Briefs - JUNE 9, 1999
TOP STORIES
BellSouth Considers Acquiring Qwest Communications
As the Baby Bells continue in their battle to gain a slice of the long-distance market segment, BellSouth announced that it is considering acquiring Qwest Communications, following its recent deal to acquire a 10 percent stake in the company. Unlike their counterparts such as US West and Bell Atlantic who have entered into partnerships with Global Crossing and the impending merger with GTE Corp., BellSouth has chosen to remain alone. The company has continued to maintain its focus on developing its local service business in its nine-state territory as well as increasing its relationship with Latin America. In a recent filing with the Securities and Exchange Commission, the company suggested that it has considered acquiring Qwest and that Qwest&Mac226;s management could support the move. According a report in The Wall Street Journal, in addition to its current 10 percent stake, which the company has acquired for approximately $3.5 billion, the company has permission to offer long-distance services in all of its states.
New FCC Regulations Could Force Callers to Cell Phones to Pay
The FCC has proposed a new regulation that will require callers to pay for calls made to cell phones. During its monthly meeting today, the commission is expected to propose regulations that would enable wireless carriers to offer such a billing plan to their customers. With the new rule in place, wireless subscribers could chose to have their callers to pay for any calls they place to the cell phone. Right now, most subscribers pay for both outgoing and incoming calls, and only a few wireless carriers have the option on an experimental basis. One company, which does offer the service on an experimental basis, is Bell Atlantic Mobile. The Baby Bell is confident that the new measure will increase cellular phone usage. However, many other carriers have been weary about adopting such a measure because of the lack of national guidelines. However, the agency&Mac226;s ruling is expected to clarify such guidelines. As part of its overall plan, the FCC will suggest possible methods to establish uniform rules, such as playing a prerecorded message to let callers know they will be charged and giving them the chance to hang up.
AT&T Broadband Appoints Curt Hockemeier as Operating Chief
AT&T Broadband has appointed Curt Hockmeier, a former Telport Communications Group executive, to as chief operating officer for the phone giant&Mac226;s new Broadband and Internet services unit. The new appointment will create an alliance between Leo Hindery, president and chief executive officer of AT&T&Mac226;s Broadband and Internet Services Business with a long-time ally and friend. Previously, Hockemeier, 51, was a local network services vice president at AT&T&Mac226;s Basking Ridge, NJ headquarters, where he oversaw the development of local telephone networks in new markets. Hockemeier will replace Jerry DeFrancisco, who will move to AT&T&Mac226;s consumer services divisions in a senior executive post that will soon be determined.
ADSL
Rhythms and MCI WorldCom Complete Voice and Data Over DSL Test
In a ground-breaking test completed this week, Rhythms NetConnections Inc. and MCI WorldCom in conjunction with Cisco and Jetstream Communications demonstrated toll-quality voice and high-speed data communication over a DSL-enabled copper phone line in New York City. The trial is part of Rhythms' and MCI WorldCom's evaluation of Jetstream's enhanced CPX-1000 gateway designed to handle local voice and data access over DSL. Jetstream is a supplier of broadband access solutions for next-generation local telecommunications networks. In the demonstration, phone calls and Internet access were delivered simultaneously over a single DSL line. A telephone was plugged into an analog voice port on a Jetstream Integrated Access Device (IAD), while a PC was connected to an Ethernet port on the IAD. The Jetstream IAD was connected via the Cisco 6100 DSL Access Concentrator to Rhythms' DSL network. Voice calls were then transported via Cisco's 8650 BPX IP+ATM switches, through Jetstream's CPX-1000 voice gateway interface with MCI WorldCom's Class 5 PSTN (public switched telephone network) switch over MCI WorldCom's ATM network. Data traffic was transported to the Internet and also could be directed to a corporate LAN.
Choice One Communications Rolls Out DSL Technology for Customers in New York State
Choice One Communications Inc., a full service telecommunications provider headquartered in Rochester, New York has begun to offer high-speed DSL services for small and mid-size business customers in Albany, Syracuse and Buffalo, New York. A Competitive Local Exchange Carrier (CLEC), Choice One is installing the equipment necessary to support DSL technology in all of its markets in the Northeast.
EUROPE
Cable & Wireless Wins Bidding War for Japan&Mac226;s IDC Communications
Cable & Wireless Optus and Excite@Home Announce Formation of @Home Network Australia
Excite@Home and Cable & Wireless Optus (Australia: CWO) announced an agreement to form a joint venture. Under the terms of the agreement, Excite@Home will develop an Australian version have @Home, Excite@Home's high-speed Internet service. Cable & Wireless Optus will market the service to its approximately 2.2 million homes passed, which is nearly 100 percent two-way hybrid fiber coaxial cable. The new entity, @Home Network Australia, will combine Excite@Home's broadband Internet technology, content, systems and operating expertise with Cable & Wireless Optus's strong brand and market presence to create an Australian high-speed Internet service that is substantially better than any other Internet service available in Australia today. Cable & Wireless Optus&Mac226;s fiber optic HFC network is ideally positioned to carry the suite of services that will become available from @Home Network Australia, some not seen before in Australia.
COLT Extends European Coverage with New Network in Cologne
COLT Telecom Group plc (COLT) announced that it is now operating in 17 markets with the launch of its new network in Cologne. Cologne is COLT's 7th German network and the latest link in its fast expanding IP-based pan-European network. The initial 20-kilometer network covers the business and commercial center of Cologne and will be expanded further in line with demand. In Germany COLT now has operational networks in Berlin, Cologne, Dusseldorf, Frankfurt, Hamburg, Munich and Stuttgart and is constructing a high capacity, 2,600-kilometer inter-city fiber optic network. With the launch of Cologne, COLT is the largest city-network telecommunications provider in Germany. At 31 March 1999 COLT had 566 kilometers of fiber optic network in operation and 906 directly connected customers in Germany.
FIBER OPTICS
Tellium and Extant Inc. Enter Joint $250 Million Optical Cross Connect Development Deal
Tellium and Extant Communications have entered into a joint $250 million deal to develop optical cross connect technology. Under the terms of the agreement, Extant will begin deploying Tellium&Mac226;s Aurora 32 in 8 cities by the end of 1999 followed by the deployment of Tellium&Mac226;s Aurora 512 Super Switch in 2000. Tellium&Mac226;s new Super Switch, which was launched earlier this week at Supercomm 99, features 512 connections operating at 2.5 Gbps, for a total switching capacity of 1.28 Tbps.
WIRELESS
Nortel Networks, Samsung to Collaborate on Wireless Internet Solutions
Nortel Networks has entered into a joint collaboration with Samsung to enable wireless service providers to migration to third generation (3G) radio technology for delivery of enhanced voice and data services. Nortel Networks and Samsung are initially developing solutions for transition to 1XRTT -- the first phase of the proposed cdma2000 3G standard, which can support 144 Kbps data transmission and enable operators to increase radio capacity as much as 100 percent. Trials incorporating 1XRTT with IP (Internet Protocol)-centric, packet-based Unified Networks solutions from Nortel Networks and advanced terminals from Samsung will be conducted globally beginning early next year.
Headlines - JUNE 8, 1999
Top Stories
ADSL
EUROPE
FIBER OPTICS
IP TELEPHONY
MERGERS/ACQUISITIONS
SATELLITE
News Briefs - JUNE 8, 1999
TOP STORIES
Sprint, Nortel Networks Sign $520 Million Contract to Expand PCS Wireless Network
Sprint has signed a three-year, $520 million contract with Nortel Networks for cdmaOne (IS-95 CDMA) equipment and services for Phase III of Sprint PCS' nationwide wireless network development and expansion. The contract represents the continuation of a successful relationship between Sprint and Nortel Networks, with Nortel Networks providing solutions for all three phases of Sprint's wireless network deployment. The two companies have previously announced $1.5 billion in contracts during the last three years of Sprint PCS' national rollout of its 100-percent digital, 100-percent PCS nationwide wireless network. Under the new contract, Nortel Networks will provide equipment andservices that will enable Sprint PCS to expand coverage and increase network capacity to meet rapidly growing customer demand. Similar to its earlier two agreements with Sprint PCS, Nortel Networks will supply and install CDMA network infrastructure equipment and services, including the flexible and third generation (3G)-ready multi-carrier Metro Cell base station, plus switches, intelligent network components and software. top
Microsoft to Enter $125 Million Product Licensing Agreement with Inprise Corp.
Microsoft Corp. will enter into a $125 million product alliance with Insprise Corp. in which Microsoft will liscesne Inprises technology patents and give the smaller company a boost to their limited cash flow. Under the terms of the agreement, Microsoft will pay $100 million to use Inprise patented technology in its products and finally settle long-standing patent issues that have lingered between the companies. In addition, Mcirosoft will purchse preferred shares valued at $25 million, representing approximately a 10 percent stake in the company. In 1997, Inprise sued Microsoft for unfair competition in recruiting, but never sued the company for patent infringement. top
ADSL
Paradyne Partners With Jetstream for Interoperable Voice Over DSL Solution
Paradyne Corporation has joined Jetstream's Voice over Digital Subscriber Line (VoDSL) Partner Program. As part of the relationship, Paradyne and Jetstream will ensure interoperability of Paradyne's Hotwire DSL access multiplexer (DSLAM) technology with Jetstream's VoDSL broadband access solution. In addition, Paradyne has licensed Jetstream technology and will be developing Integrated Access Devices (IADs) compatible with the Jetstream solution. Optimized for the small business and residential markets, the Hotwire multi-service system has been designed to provide the NSPs with unparalleled DSL flexibility to meet the voice and high-speed data needs of the small business market. The DSL types supported include Hotwire MVL(TM) (Multiple Virtual Line) system, Multi-rate Symmetric DSL (M/SDSL) and Multi-rate High-speed DSL (M/HDSL) up to E1, and Rate Adaptive DSL (RADSL) at 1Mbps. top
EUROPE
Vivendi Proposes $2.59 Billion Merger with Pathe SA
Vivendi announced that it will merger with French cinema and media company Pathe SA in a $2.59 billion deal, acquiring a large stake in Rupert Murdochs British pay-TV network in the process. The company plans to offer three of its own shares for two Pathe shares, representing a 20.9 percent premium for Pathe shareholders on the basis of Fridays closing prices. Upon completion of the first stage of the tranaction, Vivendi will retain Pathes 17.5 percent stake in British Sky Broadcasting Group PLC, which is 40 percent controlled by Mr. Murdochs News Corp. as well as Pathes 20 percent stake in a French satellite broadcasting operation, Canal Satellite. Then the compay will sell Pathes remaining assests, including its Liberation daily newspaper and a soccer club back to Pathes largest single shareholder, Jerome Seydoux, for 521 million euros. top
Cable & Wireless Investors Offer US$1.12 Billion for Stake in Bouygues Telecom
Cable and Wireless PLC has received a US$1.12 billion offer for its 20 percent stake in Bouygues Telecom. In February, the company said it was speaking with potential buyers of its stake in Bouygues Telecom, the third licensed mobile phone operator in France. The proposed sale is part of the companys program of selling pieces of its business to further its focus on corporate customers. However, it is not clear who will end up with the 20 percent stake in Bouyges Telecom because the French companys other shareholders have preemption rights. One of the major shareholders of Bouygues Telecom is holding company BDT, which is controlled by French conglomerate Bouygues SA. Additional shareholders include French Bank Paribas SA, Germanys Veba AG and Telecom Italia SpA. top
Deutsche Telekom Launches Successful Equity Offering
Even though institutional investors are not big fans of Deutsche Telekom, the companys equity offering got off to a strong start yesterday. The share price climbed to 40.02 euros, up 1.02 euros, or 2.6 percent, outpacing the gains of the markets DAX index, which rose 1.7 percent. Although Michael Cohrs, head of equity capital markets at Duetsche Bank AG would not comment on the amount of orders received, it is clear that Germanys growing number of individual investors will be the main factor ensuring success of the offering of as many of 286 million new shares whose value could exceed 11 billion euros. top
COLT Implements Network Interconnection With Telefonica
COLT Telecom Group plc announced that network interconnection between its Spanish subsidiary, COLT Telecom Espana SA, and Telefonica was now operational. Commenting on this development, COLT's Regional Director, Lakh Jemmett, said, "The interconnection of our networks adds a new momentum to COLT's growth prospects in Spain." Angel Rojo Diez, Managing Director of COLT's Spanish subsidiary said, "This is an important step forward for COLT in Spain. We have been providing service over our fiber optic SDH network in Madrid since September 1998 and through our interconnection arrangements with Telefonica we are well positioned to accelerate our revenue growth." Also, construction of its Barcelona network was nearing completion and that plans to launch service in Barcelona before the end of June were well advanced. top
France Telecom, Nortel Networks to Explore Market, Technology Drivers For Wireless Internet with France's First UMTS Network Trial
France Telecom and Nortel Networks has begun France's first trial of a third generation (3G) mobile communications network, based on proposed standards for Universal Mobile Telecommunications Service (UMTS), to gain insights into the market and technology drivers for future Wireless Internet data and voice services. France Telecom Mobiles will be able to test a variety of data and voice services using actual size prototype terminal equipment representative of the first 3G devices expected to be commercially available. These will include W-CDMA (Wideband CDMA) voice terminals and PC cards capable of transmitting and receiving data at speeds up to 64 kbps. A prototype mobile device capable of transmission speeds up to 384 kbps will also be available.The trial is expected to include both consumer and business services. Participants will be able to conduct high-speed mobile communications sessions including Internet access and video conferencing. Nortel Networks and Panasonic, which formed an alliance last year to develop 3G wireless voice and data solutions, will provide the radio equipment, core data network and terminals for the trial. top
FIBER OPTICS
Tellabs Unveils New Titan 6500 Multiservice Transport Switch at Supercomm 99
Tellabs yesterday introduced the TITAN 6500 multiservice transport switch (MTS), a flexible, scalable networking, system that will deliver broadband digital cross-connect, SONET/SDH gateway, dense wave division multiplexing (DWDM) and data switching capabilities in a single platform at the SUPERCOMM '99 trade show in Atlanta. The TITAN 6500 MTS is part of Tellabs' new 6000 series of global optical networking systems. Tellabs is showcasing the TITAN 6500 MTS June 8-10. Tellabs will be exhibiting in Booth #2825 at the Georgia World Congress Center. top
IP TELEPHONY
Lucent Technologies Signs OEM Agreement With The Fantastic Corporation for Multimedia Broadband Solution
The Fantastic Corporation, a global provider of broadband multimedia solutions, and Lucent Technologies announced an agreement which will enable Lucent to offer its corporate and global service provider customers a bundled, end-to-end solution for designing, managing, monitoring and broadcasting high-quality multimedia applications -- such as text, audio, video, data streams and graphics over the Internet and other broadband networks. Under the terms of the agreement, Lucent will resell Fantastic's broadband multimedia software the CECPro(TM) (Channel Editorial Center), CMC(TM) (Channel Management Center) and MediaSurfer(TM) -- providing Lucent's customers the ability to broadcast any type of content using point-to-multipoint distribution over cable, xDSL and IP-based networks. Lucent has also made a small equity investment in Fantastic. top
MERGERS/ACQUISITIONS
Oracle Corp. Acquires Thinking Machines Corp.
Oracle Corp. has acquired the assets of Thinking Machines Corp., a Burlington, Mass based manufacturer of data mining software for businesses. At this time, the details of the acquisition have not been disclosed. All of Thinking Machines employees are now part of Oracles staff. As part of the agreement, Oracle will integrate their software into Oracles customer-relationship management offerings top
SATELLITE
New Class Action Filed Against Iridium on Behalf of Secondary Offering
Purchasers and Purchasers Through May 13, 1999 Wolf Haldenstein Adler Freeman & Herz LLP filed a class action lawsuit in the United States District Court for the District of Columbia on behalf of investors who purchased Iridium World Communications, Ltd., Iridium LLC, and/or Iridium Operating LLC common stock between September 9, 1998 and May 13, 1999 and on of a subclass of purchasers of Iridium common stock pursuant to Iridium's Secondary Offering. The lawsuit charges Iridium, Motorola, Inc., and certain officers and directors of Iridium (collectively "Defendants"), and Merrill Lynch & Co., Goldman Sachs, NationsBanc Montgomery Securities, Salomon Smith Barney, and SoundView Technology Group (collectively "Underwriter Defendants") with violations of the federal securities laws and regulations of the United States. The Complaint alleges, among other things, that Iridium's Secondary Offering materials contained false and misleading statements and omitted to disclose material facts concerning, among other things: the Company's financial condition and its future business prospects. top
Headlines - JUNE 7, 1999
TOP STORIES
ADSL
FIBER OPTICS
PEOPLE IN THE NEWS
News Briefs - JUNE 7, 1999
TOP STORIES
Allied Signal and Honeywell Announce $14 Billion Merger
Allied Signal and Honeywell Inc. announced yesterday that they will
merge in a $14 billion stock swap. Upon completion of the deal, a new
company will be created with $25 billion in annual sales and a market
capitilization in excess of $45 billion. The combined company will be
called Honeywell International, and will be based in Morristown, NJ,
Allied&Mac226;s current headquarters. Under the terms of the agreement,
Honeywell shareholders will receive Allied Signal stock valued at 4.2
percent premium over their existing Honeywell shares, based on last
Friday&Mac226;s closing prices. Company shares rose 9.5 percent when a report
emerged on Friday that Honeywell was entering a possible deal with
Allied. As a result of the merger, at least 4,500 jobs will be
eliminated, with 2,000 of those coming during the first six months upon
completion of the deal.
IBM to Enter into $8 Billion Sales Agreement with Taiwan&Mac226;s Acer Group
As IBM continues to accelerate its effort to market its technology to
companies that are often rivals, the company announced yesterday an $8
billion technology sales agreement with Acer Group of Taiwan. This seven
year agreement with Acer is the company&Mac226;s fourth large computer parts
deal for IBM in the last three months. Just last month, Nintendo said it
would purchase $1 billion worth of IBM&Mac226;s Power PC microprocessors to
run its new line of video game machines. And in March, the EMC Corp., an
IBM competitor in storage systems for large computers announced that it
would purchase $3 billion of IBM disk drives over five years. Also,
during the same month, Dell Computer Corp. planned to purchase $16
billion of technology components from IBM over the next seven years.
Cisco and Motorola to Jointly Acquire Bosch Subsidiary for $1 Billion
In the effort to expand the capability to deliver wireless Internet
links, Cisco Systems and Motorola Inc. reached an agreement yesterday to
jointly acquire a subsidiary of the Robert Bosch Corp. of Germany that
is developing advanced wireless technology. Although neither company
would disclose the terms of the agreement, executives close to the deal
said the price would be substantially less than $1 billion. This would
be similar to other acquisitions made by Cisco, which has made a string
of deals but none for more than $265 millioin since 1996, when the
company acquired Stratacom for $47.7 billion. The Bosch unit, which is
based in Richardson, TX has between 100 to 200 employees, is developing
products that transmit large amounts of data between stationary fixed
antennas using a wireless technology. Under the terms of the agreement,
the two companies will form a new company called Spectrapoint Wireless.
Motorola will own 81 percent of Spectrapoint and Cisco will own 19
percent. However, the new company might have a difficult time to locate
customers. However, potential new customers such as Nextlink
Communications have expressed interest in the new company.
ADSL
Covad Completes Trials of Toll-Quality Voice Calls Using DSL Over ATM
During a presentation at SuperComm by Chuck Hass co-founder and
Executive Vice President of Sales, Covad Communications announced
yesterday the successful technical trials of voice over its DSL service
using ATM technology. Covad claims that the trials have proven technical
capability of simultaneous data and voice service for up to 16 POTS
lines over a single DSL line, and the company has already completed
toll-quality voice calls over DSL lines via Class 5 voice switch.
Jato to Deploy Turnstone&Mac226;s Copper CrossConnect for their DSL Service
Rollout
Jato Communications Corp. will deploy Turnstones Systems&Mac226; CrossConnect
family of products as a key element in its standard DSL architecture.
The company will use the Copper CrossConnect CX100 platform to manage,
monitor and control its copper local loop infrastructure. The Copper
CrossConnect will enable Jato to streamline and accelerate DSL improved
service reliability to customers. With Turnstone&Mac226;s CX100 platforms,
Jato&Mac226;s network managers and provisioning personnel will have complete
control of their copper local loop infrastructure from a central network
operations center, reducing the need for service visits to the customer
premises.
FIBER OPTICS
Lucent Technologies Introduces New TrueWave Submarine RS Fiber
Lucent Technologies yesterday unveiled their new TrueWave Submarine RS
fiber at an analyst conference in their Atlanta works manufacturing
plant in Norcross, GA. The company claims that by developing an undersea
fiber with a reduced dispersion slope, Lucent can help network providers
dramatically increase the number of channels and transmission speeds of
their networks, while providing a future-proof solution for emerging
transmission speeds of their networks, and for emerging technologies
such as WDM. The new fiber is capable of supporting speeds up to 10 Gbps
over 32 wavelengths in a single fiber. Unlike non-zero dispersion fibers
used in long-haul terrestrial systems, TrueWave Submarine Fiber has
negative dispersion to mitigate a non-linear effect, called modulation
instability, to maintain signal integrity.
Ciena Sponsors Lectures on Optical Networks Trends at Supercomm 1999
During this year&Mac226;s Supercomm event, Ciena will sponsor a series of
lectures on optical network trends. Experts from Enron Communications,
Williams Communications, iaxis Ltd. And Crosswave Communications will
discuss the latest trends in optical networking at the CIENA Optical
University. Also, analysts from Forrester Research, Current Analysis and
The Aberdeen Group, as well as CIENA Corp. scientists and engineers,
will give their own perspective on the trends. The lectures will be held
at the CIENA booth between 11 a.m.&Mac246; 5 p.m. Tuesday, 11 a.m.&Mac246; 4 p.m.
Wednesday and 11 a.m.&Mac246; 3 p.m. Thursday.
PEOPLE IN THE NEWS
Cabletron&Mac226;s Co-Founder Craig Benson Resigns from Posts of Chairman,
Chief Executive
Cabletron Systems Inc. co-founder Craig Benson has resigned from the
posts of chairman, chief executive and president only 14 months after
returning to day-to-day management to help revive the struggling
computer networking manufacturer. In his place will be Piyush Patel,
Cabletron&Mac226;s head of engineering. Patel, 43, was formerly chief
executive of Yago Systems Inc., which Cabletron acquired last year. The
company said Mr. Benson, who still holds a 12 percent stake in
Cabletron, would remain on the board of directors. This new appointment
is part of a series of high-level turnovers at Cabletron, which has lost
its leading stance in the computer networks business to other
competitors such as Cisco Systems. Previously, in August 1997, S. Robert
Levine, Cabletron&Mac226;s other co-founder resigned from his post of President
and chief executive officer, arguing that he did not feel qualified to
help the company grow rapidly. In his place came Donald Reed, a
long-time Nynex Corp. executive, who then resigned himself only eight
months later.
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