Headlines - August 27, 1999
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Pennsylvania Regulators Adopt Measure Calling for Bell Atlantic to Split its Local Phone Service Operations
In what many are calling "Divestiture II," Pennsylvania regulators yesterday made an order to force Bell Atlantic to divide its local telephone operations into two independent companies, as a means to promote local competition. Under the terms of the measure, the Baby Bell would have to split their local service retail operations similar to the way AT&T had to divest itself of its 22 local phone companies in 1984 to promote long-distance competition. Pennsylvania is the state to pursue the plan, which Massachusetts’s regulators argue is unworkable and unnecessary. When the plan is finalized in September, Bell Atlantic would continue to operate the state’s network, but would have to create an independent retail marketing company. This independent company would compete with rivals such as AT&T, MCI, Sprint to serve the residential and business market. In addition, legislators ordered the company to reduce access charges for competitors and freeze local rates until 2003. As expected, Bell Atlantic’s president Daniel Whelan argued that the ruling is illegal and will appeal it.
FCC Approves MCI WorldCom Skytel Merger
The Federal Communications Commission has granted its approval of the merger between SkyTel Communications Inc. and MCI WorldCom. SkyTel expects to mail its proxy statement to shareholder early next week and has scheduled a special meeting of stockholders for September 29 to vote on the merger. Assuming SkyTel stockholder approval is obtained, the merger is expected to close on October 1.
British Telecommunications to Acquire Yellow Book USA for US$665 Million
British Telecommunications has acquired Yellow Book USA, the New York-based publisher of telephone directories, for $665 million in cash. The British telephone giant acquired Yellow Book USA from VS& A Communications Partners II LP, an affiliate of Veronis, Suhler and Associates. Yellow Book USA is the largest independent United States publisher of telephone directories, with a portfolio of 300 directories and a circulation of more than 19 million.
Questor to Acquire Stake in Aegis Communications for $46.75 Million
Questor Partners Fund will acquire a 30 percent stake in Aegis Communications, marketing research and services company, for $46.75 million. Questor, based in Southfield, Michigan, will acquire Aegis’s newly issued senior voting preferred shares, which will be convertible into common stock for $1.35 to $1.66 a share. Assuming an average conversion price of $1.51 a share, Questor would own about 30 percent of Aegis’s fully diluted outstanding shares.
ASIA PACIFIC
Telstra’s Earnings Rose 16 Percent during the Year
Telstra reported that earnings rose 16 percent during the year ended June 30 to 3.49 aud, the highest annual profit in Australia’s corporate history. Company sales grew 5.2 percent to A417.17 billion. Telstra’s results for the year were in line with analysts’ estimates, but the 86 percent dividend increase to 26 Australian cents a share was well above expectations. The year results included a special dividend of 16 cents, six cents more than expected. The government’s planned sale of a further 16.6 percent of Telstra figured high in the special dividend, designated to keep shareholders on board ahead of the new tranche sale.
EUROPE
Siemens and 3Com to End Joint Venture but Will Continue to Develop Telephony Equipment
Siemens AG and 3Com Corp. have decided to abandon plans for a joint venture company, but will continue to develop equipment for local area network telephony. Executives from both companies said the projected overhead costs from creating a separate company to market and manufacture the jointly developed products not worth it. In December, the companies announced the plans for a non-contractual joint venture to develop products for converged networks.
Ericsson to Acquire Two LCC Units for US$22 Million
LM Ericsson has agreed to acquire the assets of two divisions of LCC International for $22 million. Under the terms of the rights to all the management software, related technologies and all patents, copyrights and trademarks associated with LCC’s field measurement systems and network and planning software divisions. In addition, the two companies agreed to enter a three year product supply agreement for a range of field measurement and network optimization products, as well as a license agreement in which Ericsson will license back to LCC network planning software for use in its radio engineering services.
Winstar Communications Wins Spectrum Grant for Two Major German Cities
Winstar Communications Inc. has been awarded a spectrum grant for two of Germany’s largest business markets, Hamburg and Cologne. With this new contract, WinStar becomes one of the only US-based fixed wireless carriers to receive spectrum in any of Germany’s major business centers. The company paid a nominal license fee for these grants, which are in the 26 GHz band and designated for use with point-to-multipoint technology. William J. Rouhana, Jr., WinStar’s chairman and chief executive officer, said, "With this award, WinStar is one step closer to completing its plans to offer services to the 25 most important commercial centers across Europe."
Ireland’s E-commerce Era Takes Another Significant Step Forward
TeleNode Ltd. has announced its intention to offer a "Carrier Hotel" service in Ireland. The first of an international network of Carrier Hotels, the TeleNode Dublin facility will serve Ireland's telecommunications competitors, large corporations and importantly, international Internet and e-commerce companies. The Carrier Hotel concept has been well used in liberalized telecom markets such as the US. The service enables large users of telecom bandwidth to have access to a broad range of high capacity networks all in one location. Underpinning the development of the facility is the strong interest of the major telecom providers to extend their broadband networks into the Carrier Hotel. Perhaps the most exciting area to be facilitated by TeleNode's development is the hosting of international Web sites and e-commerce servers. By housing a Web server in the Carrier Hotel, the site owner has immediate access to the type of bandwidth required to carry high levels of international Internet traffic as well as a choice of corresponding telephone services.
European Companies Launch Offerings for Internet Divisions
Following the success of British retailer Dixons Group in floating its free Internet service, Freeserve, on the stock market, a flurry of Europe’s largest companies have now begun to launch offerings for their own Internet divisions. On August 27, French pay-television operator Canal Plus became the latest to launch an Internet service. And other companies have jumped on the bandwagon with Spain’s Telefonica on August 25, planned to lists its Interactiva online unit, and Deutsche Telekom intimated the possibility of spinning of its T-Online Internet division.
BroadNet Names Lucent Technologies as Preferred Supplier for Pan European Wireless Network
Comcast International Holdings partially owned Broadnet named Lucent Technologies as its preferred supplier in the rollout of its Pan European broadband wireless access network. On August 26, BroadNet was awarded 42 city licenses by Germany’s regulator covering all the major financial centers, potentially making BroadNet Germany’s second largest operator in the local loop. These are the first wireless broadband network licenses to be awarded in Europe. BroadNet plans to bid for licenses in up to 19 European markets and plans to roll out its network in Germany with Lucent’s support by the middle of 2000. Under the terms of the deal, will provide BroadNet with a complete network covering the design, building and deployment of a Pan European wireless broadband access network.
Alcatel to be Sole Supplier for France Telecom’s ADSL Network
Alcatel will become the sole supplier for the opening of France Telecom’s ADSL network. In July, France Telecom announced that it would invest 2 billion ffr in ADSL over the next three years. Also, the government approved France Telecom’s Netissimo service, allowing unlimited high-speed Internet access for 265 ffr a month in the first six Paris arrondissements and in Issy-les-Moulineaux, Neuilly-sur-Seine and Vanves from November.
Telefonica to Seek Stock Market Listing for Interactive Unit
Telefonica SA plans to seek a stock market listing for its wholly owned Telefonica Interactiva SA Internet unit. Telefonica said the decision was made by its board of directors at a meeting on August 25. No further details of the placement were provided, but sources close to the operation said that in July Telefonica planned to place the unit on the NASDAQ exchange in about three months.
INDIA
MSEB to Forge Alliances for Net Backbone
The Maharashtra State Electricity Board (MSEB) is planning to form a joint venture with private players to set up an Internet backbone in Maharashtra, which will utilize its existing electricity distribution network in the state. Sources said that the new venture would be on a 50:50 basis, although the equity base and holding pattern could not be ascertained. The company is expected to invite bids for the joint venture shortly. The partner is likely to be finalized by the year-end. The bidders would be primarily cable companies, and the company does not rule out foreign alliances. The second stage would involve expanding the bandwidth to accommodate voice traffic on the same network, which may be kicked off by early 2002. Once the high-speed network is in place, it would be leased out to private Internet service providers, although MSEB will use it for internal communications.
ASC to Launch INR 5.35 Billion Initial Public Offering
ASC Enterprises Ltd. is planning an initial public offering of about INR 5.35 billion. This would be one of the biggest primary issues in the domestic capital market in the recent years. The proceeds will form part of the INR 16.5 billion equity proposed for the company. ASC, which is handling the INR 33-billion satphone project, has already informed the financial institutions about its plan. The issue is expected sometime next year. Though the company is yet to finalize the details, the issue will be close to the project's launch. ASC is negotiating with Commonwealth Development Corporation, Prudential Asia and ING Lease for picking up additional equity of up to US$40 million, amounting to 11 per cent of the company's total equity.
Escotel Accumulates INR 3.03 Billion in Losses During 1998–1999 Period
Escotel Mobile Communication, a joint venture between Escorts and First Pacific of Hong Kong, has notched up its accumulated losses of nearly INR 3.03 billion. In the 1998-99 period, it incurred a loss of INR 1.88 billion on a total income of INR 737.8 million. In 1997-98, it had posted a loss of INR 1.15 billion on a total income of INR 441.6 million. These losses together add up to INR 3.03 billion.
Tata Teleservices to Invest US$10 Million in Payphone Business
Tata Teleservices will invest over US$10 million over the next three years in the pay phone business in Andhra Pradesh, where it provides basic telephony services. It has introduced smart cards in phone booths, which will help it to increase profitability through customized sales and promotion of the product. Schlumberger of France has provided the technology for smart card phone booths. Initially, 300 phone booths will be opened this year, with plans to set up a total of 1500 booths in the state.
WIRELESS
Ericsson Canada Wins US$210 Million Supply Order from Microsell
LM Ericsson’s unit Ericsson Canada has been awarded a $210 million supplies contract from Microcell Connexions with PCS infrastructure products, services and applications. The new three-year contract confirms Ericsson as the lead supplier to Microcell.
Headlines - August 26, 1999
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Cisco Systems to Acquire Cerent Corp and Monterey Networks for a Combined $7.4 Billion
Continuing in its growth surge, Cisco Systems will acquire both Cerent Corp. and Monterey Networks for a combined $7.4 billion. Cerent Corp., based in Petaluma, CA, makes equipment that routes telephone calls and computer data between copper telephone lines and fiber optic cables, will be purchased for about $6.9 billion, or 100 million shares of Cisco common stock. Monterey Networks, based in Richardson, TX, a manufacturer of optical cross connect technology, will sell for shares worth $500 million. The boards of both companies have met and approved the deals. Cisco’s acquisition is a departure from its strategy of acquiring smaller companies, valued at $50 to $350 million. Cisco has steered clear of making large acquisitions. The exception to this rule was their 1996 $4 billion stock acquisition of Stratacom, because of the complexities involved in combining the two large and different staffs. Monterey Networks’ wavelength router product will complement Cerent’s product as a traffic management system. Monterey was formed in 1997 and employs 130 people. Earlier this year Cisco invested $15 million in the company, and gained a seat on the company’s board of directors. The company previously invested $13 million for a small stake in Cerent as well. The two newly acquired companies would become part of Cisco’s transport business unit and Mr. Russo and Joe Bass, Monterey Networks chief executive would report to senior vice president for the service provider line of business.
Tyco International to Cut 2,000 from its Newly Acquired Raychem Division
Tyco International Ltd. announced that it will dismiss 2,200 employees, or about a quarter of the work force, at the Raychem Corporation, less than a week after acquiring the company. Employees at Raychem, which employees 9,000 were told of the job cuts on Tuesday. Tyco has about 87,000 employees and expects the cuts, half of which are in the United States, to save about $250 million. It does not expect to take a charge
Axent Technologies to Acquire 2 Alta Vista Security Software Lines
The Compaq Computer Corp. reached an agreement to sell two lines of Alta Vista security software to Axent Technologies. Under the terms of the deal, Axent will develop the next version of the software products, which restrict access to computer networks and Web sites. This deal follows CMGI’s acquisition of a majority stake in Compaq’s Alta Vista Internet search site.
ASIA PACIFIC
Sprint to Trial Net2Phone Internet Telephony Services for Calls to Asia
Net2Phone Inc. announced that Sprint Corp. will trial Net2Phone’s Voice over IP technology and international network for international consumer long distance calls to Asia. The new service, which will be called Sprint Callternatives, will originate, carry and terminate consumer long distance calls to Hong Kong, China, Taiwan, Vietnam, India, Thailand and Japan. As part of the trial, Net2Phone, will create a dedicated customer service operation to assist customer inquiries in three languages, including Mandarin, Cantonese and Korean. In addition, Net2Phone’s billing technology will allow Sprint Callternatives customers to view their telephone accounts in real time from the Net2Phone web site.
BRAZIL
Brazil Begins Tests on High Definition Television
Brazil will officially begin testing high definition television, the initiative being coordinated by the ABERT/SET group, which is working with the Universidade Mackenzie, supported by the Brazilian division of NEC. The tests will take place according to standards established by Anatel, which has as its technical consultant The Fundacap CpQD. The announcement was made during ABERT/SET 99 Broadcast and Cable, promoted and organized by Certame Eventos Promocionais, at the Riocentro, Rio de Janeiro center. The tests, which will take in Sao Paulo, will begin at the end of August and are estimated to be completed by the end of the year, when a report of the results will be delivered to Anatel, which is responsible for choosing the digital transmission standard to be completed in the country. The objective is to compare the performance, advantages, and disadvantages of the transmission systems ATSC adopted by the United States, and DVB, which is prevalent in Europe. The tests will take place in two phases. The first involves the set-up of a laboratory at the Universidade Mackenzie, located in Sao Paulo, with equipment and instruments supplied through its agreement with the Brazilian division of NEC. The second phase, scheduled for the end of September and the beginning of October, will be field tests with 17 TV broadcasting stations authorized by Anatel.
CHINA
China CATV Coordination Group Claim Multi Billion Internet Plan
Fang Hongyi, chief engineer for cable networks under China's State Administration of Radio Film and Television (SARFT), the state organization responsible for coordinating China's fragmented but huge network of cable operators. In the interview Hongyi claimed that SARFT had developed a multi-billion dollar plan, backed by Premier Zhu Rongji and President Jiang Zemin, to deliver high speed mass low cost Internet access to China's estimated 80 million CATV users. Fang said that the core of the new mass Internet service would be a 15 city Internet backbone planned by China Network Communications Corp. This is a Shanghai-based government joint venture, which began earlier this year. The service will be offered for a one-time charge of around US$60 plus US$6 per month.
ENTERPRISE NETWORKS
Lucent Venture Partners and Columbia Capital Equity Partners Lead $12.25M Second Round Investment in CoManage Corporation
CoManage Corporation that Lucent Venture Partners Inc., and Columbia Capital Equity Partners joined together to lead a $12.25 million second round investment in the company. This is the largest round of pre-product funding ever for a Pittsburgh-based high-tech company. CoManage builds a service management system for next-generation Service Providers. The company is focusing on improving delivery of "managed services," including Transparent LAN Service, VPN Service and Cable Modem and DSL-based services.
EUROPE
Bell Atlantic and Vodaphone to Form Joint Venture
Only three week after the companies ended their wireless venture, Vodaphone Airtouch and Bell Atlantic are in talks to form a joint venture. The possible merger could involve a merger of Vodafone AirTouch’s operations in the Western United States and Bell Atlantic’s cellular unit. However, neither company would comment on the situation. A venture between Bell Atlantic and Vodafone AirTouch could create a nationwide US wireless phone network. Vodafone has intimated that it would consider to buy or construct networks to extend its reach across the United States. Bell Atlantic made the decision to end their venture after Vodafone beat the Bell Company from acquiring AirTouch Communications.
Deutsche Telekom Plots International Expansion with Strong Outlook for Quarter
The shares of Deutsche Telekom AG rose 6 percent after the company reported a strong outlook, saying price cuts had halted gains in market share by its German competitors. Rates have gone down 75 percent in 18 months in a long-distance price war, but the company now expects to increase its share next year as the overall market grows. Ron Sommer, Deutsche Telekom’s chief executive, expects the long-distance business to give the company nothing but growth. In addition, he feels the company will benefit from the sale of the company’s cable television network. Telekom’s strong performance could help the company move forward with its plans to expand its international presence. A proof of this expansion is with the company’s recent acquisition of UK-based One2One. In addition to acquisitions, the company plans to take its T-Online Internet unit and its Deutsche Telekom MobileNet mobile phone group public.
NTL Inc. to Sell 50 Percent Stake in Cable London PLC to Telewest Communications for $682.2 Million
NTL, a British based cable television company, will sell its 50 percent stake in Cable London to Telewest Communications PLC, which owns the remaining half, for US$682.2 million. Telewest, whose main shareholder include MediaOne Group, chose to acquire NTL’s stake because it considers London to be a crucial market for new digital service, including high speed Internet access. Cable London currently operates a cable system with about 444,000 homes in its franchise area, which includes parts of North London. However, some close to the situation feel that Telewest may have paid too much for the network, with L2, 100 for each home in the franchise area. In contrast, NTL only paid L1, 400 a home for the residential cable lines it acquired from Cable & Wireless Communications PLC. In order to pay for the deal, Telewest will issue new shares to its current shareholders.
Mannesmann and Viag Receive Radio Licenses to Bypass Local Telecommunications Networks
The trend of telecommunications companies looking for routes around the local incumbent phone operators spreads over to Europe, as the telecommunications regulatory body has authorized Mannesmann AG unit Mannesmann Arcor AG & Co, Viag AG’s Viag Interkom GmbH& Co and 10 other providers to use radio frequencies to connect households for voice and data transmission services. Other companies that were granted licenses include Associated Com, BroadNet Callino, Deutsche LandTel, FirstMark, K-Net, Star One, tesion, Viaphone and Winstar. Previously, the link between municipal exchanges and end users had to pass via a fixed line network, such as Deutsche Telekom AG’s fixed line network. Klaus Dieter Scheurle, the regulatory body’s president, said the license awards mark another step towards the creation of a competitive environment in the local network.
Deutsche Telekom Expects Cable Television Sale to be completed by First Quarter of 2000
According to Deutsche Telekom AG chief financial officer Joachim Kroeske, the sale of the company’s cable television network will be completed by the first quarter of 2000. Turning to the full year dividend, Kroeske reiterated that the recent acquisition of UK mobile telephone operator One2One would not impact the company’s full year dividend. To match the previous year’s dividend of 1.20 DM per share, the total dividend of 3.3 DM would have to be increased to 3.6 billion DM due to the 9 percent increase in the number of shares.
FIBER OPTICS
Lucent Extends Tender Offer for SpecTran Stock to August 31
Lucent Technologies announced that it has extended its $9 tender offer for SpecTran’s stock until midnight August 31. The offer was scheduled to expire at midnight on August 24. The company said the offer was extended to give shareholders additional time to tender their shares. Approximately 48.2 percent of SpecTran have already been tendered.
Borg Warner Automotive to Sell Coleman Cable Unit to Investor Group for $144 Million
Borg Wanrer Automotive announced that it had agreed to sells its Coleman Cable unit to a group of investors that includes management for about $144 million, with debt of about $4 million. BorgWanrer acquired Colemenan Cable as part of its purchase of the Kuhlman Corp. in March. The company said at the time that Kuhlman’s electrical transformer and wire and cable businesses were outside its focus and would be sold. It expects to sell the unit in the current quarter as well.
INDIA
BSES Telecom to Offer Internet Service
BSES Telecom Ltd., subsidiary of power utility BSES, will launch Internet services in Mumbai in the last quarter of 1999. The project cost for five years is estimated around INR 800 million, of which the fixed cost would amount to INR 350 million. While a mix of equity will meet a part of the fixed project cost debt and leases finance, the remaining will be via internal accruals. The company, which has already secured license for Internet operations from the government, is targeting around 25,000 subscribers in the first year of operations.
ITI Seeks Compensation from Qualcomm
The dispute between the government-owned Indian Telephone Industries (ITI) and the US telecom giant Qualcomm has taken a new twist. ITI is seeking compensation from the US firm for supplying sub-standard wireless in local loop (WLL) systems to it. According to the agreement between ITI and Qualcomm, the US company was to supply CDMA-based WLL equipment to Indian firms, besides technical support. However, the WLL equipment failed to meet the specifications set by the Department of Telecommunications (DoT) and was found to be unfit for induction in the network. At present, ITI has now forged an alliance with Nortel, a Canada-based telecom company, for the supply of WLL systems. ITI also intends to manufacture WLL equipment indigenously. Mahanagar Telephone Nigam Ltd. has already blacklisted Qualcomm from bidding in its tenders.
VSNL Expands Bandwidth for Private Internet Service Providers
Videsh Sanchar Nigam Ltd. (VSNL) has commissioned 45 Mbps capacity through the Fiber Optic Link Around the Globe (FLAG) cable system. This is another attempt to woo private Internet service providers (ISPs) with improved and more reliable connectivity. The fiber optic link will terminate in the US through Canadian international carrier, Teleglobe. The new capacity will raise VNSL's total bandwidth from India to 165 Mbps.
National Association of Software and Services Companies Requests PSTN Connectivity for Indian Based Call Centers
National Association of Software and Services Companies (Nasscom) has requested the Department of Telecommunications (DoT) to permit PSTN connectivity to international call centers from the Indian end. A similar facility has been demanded for Indian software companies that provide product support and help desk from India. These centers will be a great source of export revenue and employment, while encouraging software companies to enable their employees work as teleworkers. Nasscom also urged DoT that domestic call centers be allowed to do international business to take full advantage of the 12-hour time difference between India and the US.
US-based Acquavit to Invest US$20 Million in Indian Internet Start-Up Companies
US-based venture capital company, Acquavit Inc, plans to make a foray in the Indian Internet segment. It has lined up investments amounting to US$20 million in Internet start-ups in Asia-Pacific region. The company will begin with India, and later expand its operations in other regions. Acquavit is expected to soon announce its first two investments in India. In return for its expertise, Acquavit would take an equity stake in fledging venture rather than a professional fee.
INTERNET
Newbridge Networks Furthers Internet Strategy with Planned Acquisitions of Timesetp Corp. and Northchurch Communications
The Newbridge Networks Corp. announced the first investments in its Internet strategy yesterday with the planned purchase of two affiliate companies. Newbridge, a computer networking company based in Ottowa, expects to spend about US$235 million in the next two years acquiring the Timestep Corp., also based in Ontario, and Northchurch Communications, of Andover, MA. Currently, Newbridge has a 30 percent stake in each company. Timestep makes technology that secures communications on networks based on the Internet, and Northchurch makes high-speed routers that provide access to data, video and other services.
MasTec Wins $120 Million in New Voice and Data Network Installations from Bell Atlantic Corp. and Cox Communications
MasTec, a telecommunications and energy provider, has receive more than $120 million in new contracts for voice and data networks installations and other services from Bell Atlantic, CAIS Internet Inc. and Cox Communications. In addition, the contracts cover power and gas distribution networks telecommunications infrastructure projects and transportation systems.
SOUTH AMERICA
EMC Enters Latin American Telecommunications Market with New Subsidiary in Argentina
The rise in interest in the Latin American telecommunications market continues as EMC Corp. opens a new subsidiary in Argentina EMC Computer Systems Argentina BV, a direct sales subsidiary headquartered in Buenos Aires. Heading up the new venture will be Sergio Lampe. With a sales force and customer service organization that has been built over the past six months, EMC will expand its existing presence in Latin America by selling and supporting EMC’s Symmetrix Enterprise Storage systems, software and services directly into customer accounts in Argentina. Currently, companies such Renault Argentina, Telefonica de Argentina, Banco Nacion, Banco Provinica and Siderca have been utilizing EMC storage solutions.
Headlines - August 25, 1999
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Nortel Networks to Acquire Periphonics Corp. for US$346 Million in Stock
Nortel Networks will acquire Periphonics, a global provider of interactive voice solutions used in call centers and other voice and data network applications for $346 million in common stock. This deal furthers Nortel Networks’ strategy to deliver a new generation of networks that unify voice, data and the Internet. Periphonics has more than 900 highly skilled employees in the Americas, Europe, and Asia. Revenues for the fiscal year ended in May 1999 were US$142 million. The company designs and supplies self-service voice response and web-enabled systems for call centers and other network applications that allow customers to interact directly with a company’s databases and customer care professionals. Upon completion of the deal, Periphonics will become a wholly owned subsidiary of Nortel Networks, and will continue to be headquartered in Bohemia, New York and chairman, with current CEO and president Peter Cohen leading the business. Under the terms of the agreement, each share of
Periphonics will be converted into a fraction of a Nortel Networks share at an exchange ratio equal to US$29.23 divided by the average price of a Nortel Networks share during a specified period prior to closing. In this specified period, if the average price of a Nortel Networks share is above US$47.15, the exchange ratio will be fixed at 0.62 and if the average share price is below US$38.46, the exchange ratio will be fixed at 0.76.
Richard Belluzzo Resigns as Chairman and CEO of Silicon Graphics Corp.
Richard Belluzzo, who resigned yesterday as chairman and chief executive officer of Silicon Graphic Inc., is expected to join Microsoft Corp. to run its rapidly growing Internet activities. Belluzzo is likely to take the position and is the best choice, even though he was not Microsoft’s first choice, said Rob Enderle, senior analyst at Giga Information Group. Belluzzo is expected o begin around September 1. Since November, the software giant has been looking for an executive who can build up its Internet businesses, which are facing tough competition from America Online and Yahoo Inc.
ASIA PACIFIC
Telstra Launches 400 Million Aud in CDMA Network
Telstra Corp. has launched a new 400 million aud CDMA mobile phone network, ahead of the closure of its analog network later this year. The network will become available in Sydney and Melbourne metropolitan areas beginning on August 26. The company expects the network to be launched across Adelaide, Brisbane and Canberra in September, as well as in a number of regional locations during October. By the end of 2000, Telstra CDMA network is expected to cover about 95 percent of Australia’s population.
BRAZIL
IFX Continues Expansion with Acquisition of e-Net Teleinformatica Ltda
IFX Corporation has entered into the Brazilian Internet market with the purchase of e-Net Teleinformatica Ltda ("e-Net"), one of the largest Internet service providers in the Northeast of Brazil. Terms of the acquisition were not disclosed. IFX has operations in Argentina, Bolivia, Brazil, Chile, Colombia, Mexico and Venezuela, and also offers its Latin American subscribers local Internet access in many major cities in the United States.
AT&T Enters Brazil’s Telecommunications Market with Acquisition of Netstream for US$300
AT&T Corp. has signed a deal to buy Brazilian-based telecommunications company Netstream. AT&T plans to initially invest US$300 million in Netstream, which provides high-speed Internet, voice, data and video services to the corporate world. The company will continue to expand Netstream's roster of business customers in Brazil, AT&T said in a statement. Netstream, which began operations in October 1998, has more than 400 customers. Promon Tecnologia S.A., a Brazilian engineering, and design and construction management firm currently own the company. Netstream will continue to be managed by its current local leadership.
EUROPE
Mannesmann Arcor Acquires Major Stake in German Regional Phone Operator ISIS
Mannesmann Arcor intends to acquire a 64.9 percent stake in the German regional phone operator ISIS Multimedia Net Gmbh for an undisclosed amount. However, the deal is still subject to regulatory approval by the supervisory board as well as the regulatory authorities. Through the acquisition, it intends to improve its direct customer connections in Germany’s western Rhine/Ruhr region, where ISIS offers local, as well as short and long distance calls and Internet access. Other ISIS shareholders include the city of Dusselforf’s utilities and municipal services provider, which holds 17.5 percent, Westdeutsche Landesbank Girozentrale, which holds 10 percent, and the city of Diusburg’s and the city of Neuss’ utilities and municipal services provider, holding 5 percent and 2.6 percent respectively.
Telecom Italia and Telekom Austria to Participate in Albania’s Privatization of Albanian Communications ShA
Telecom Italia SpA and Telekom Austria intend to participate in the upcoming privatization of Albania Mobile Communications ShA. The Albanian government will sell a 51 to 85 percent stake in AMC to qualified strategic investors and that a 15 percent stake will be earmarked for AMC employees. Indications of interest must be received by September 15. AMC currently has 9,000 subscribers.
France Telecom Says Free Internet Access will Have Negligible Impact on Wanadoo
Free Internet access planned by several Internet service providers in France had almost no impact on the number of subscribers to France Telecom’s on line service Wanadoo. Wanadoo is sticking to its forecasts of one million subscribers by the end of 1999. "Our customers have remained loyal and the growth in the number of subscribers is continuing," said Nicolas Dufourcq Multimedia division director.
INDIA
Telecom Regulatory Authority Places Prohibition Paging Company Wireless Planning Cell Charges
The Telecom Regulatory Authority of India (TRAI) has placed a prohibition on paging operators collecting wireless planning cell (WPC) charges from consumers. WPC charges are payments to the government for using the frequency spectrum and are paid by the operator in addition to license fees. The TRAI order was issued on June 18, 1999 after it discover that some operators had levied a charge of INR 100 per year on consumers as payment for WPC charges. The operators then passed on this amount to the government. The TRAI has made it clear that this practice could not continue. It has told the operators that WPC charges would have to be paid by the paging operator directly to the licensor, including the government. It cannot be collected separately form the consumers in addition to the monthly rentals which they have to pay to the operator. Monthly rentals are fixed at INR 300 per month for alphanumeric pagers and INR 175 per month for numeric pagers.
Center for Development of Telematics Develops Satellite Communications System
The Center for Development of Telematics has developed India's first satellite communications system. The technology developed by C-DOT, called Insat-MSS, uses transponders in the Insat series of satellites and is ideally suited for providing telephone connections in those areas where it is not cost effective to lay the conventional cable based network. C-DOT executive director KN Gupta says that the technology was developed in association with Comsat, a US based satellite communications company. According to sources, DoT is planning to induct 1,000 satellite phones in its network. These phones will be installed in the rural areas as village public telephones (VPTs). DoT will have to pay more than INR 150 million per annum in foreign exchange if the contract is awarded to a foreign company. This figure will further go up if charges paid for incoming traffic are also taken into account. On the other had, if the Insat-MSS terminals, with a 2.4 meter antenna are used as VPTs, then this amount can be saved an there is no outflow of foreign exchange.
ISRO to Put Hi-Tech Remote Sensing Satellite in Orbit in 2000
The Indian Space Research Organization (ISRO) will launch its technologically advanced remote-sensing satellite, with a resolution of 2.5 meters, in 2000. This satellite will help the country avoid Kargil-like situations. It will also help develop precise base maps, which could be used for better utility management, planning and environment. Dr K Kasturirangan, chairman, ISRO, disclosed this. Information infrastructure has become an essential element in the development of any country.
India’s E-Commerce Still 15-20 Years Away
The revolution in information technology and communication systems will completely change the way companies do business in the new millennium but it could still take 15-20 years before e-commerce catches on in India, according to P M Sinha, chairman of Pepsico India Holdings.
INTERNET/E-COMMERCE
Net2Phone to Link Service with Compaq’s Presario PC Users
Net2Phone, a provider of telephone services over the Internet, and Compaq Computer Corp. have joined forces to link international users of its Presario PCs with Net2Phone’s service. Terms of the agreement have not been disclosed. Under the terms of the three-year agreement, Presario users gain access to Net2Phone’s service through a Web site created by both companies. Computers shipped to Canada, Latin America, Japan, and other Asia nations have a button on the keyboard for an automatic link to the site.
America Online to Update Instant Messenger System
America Online Inc. has made a move to update its instant messenger software that includes features such as a news feed and a continuous stock ticker. Instant messaging has become one of the most popular ways to communicate on line because it enables people to see whether their friends are logged on, and then send an instant electronic mail message to them. The new software, version 3.0, is available for free from AOL’s web site, www. Aol.com. The company has been battling with Microsoft over instant messaging since last month when Microsoft unveiled a similar program that lets MSN users know when AOL members are on line. Microsoft wants free access between instant e-mail providers. However, AOL argues that the link jeopardizes its member’s security and has been blocking MSN Instant Messenger. AOL’s new software works on Microsoft’s Windows operating system and on Apple Computer Macintosh computers.
SOUTH AMERICA
Greece's Intracom Wins Initial Contract From Telecom Argentina
Intracom SA, Greece's largest telecommunications equipment manufacturer, said it won a $220,000 contract to supply Telecom de Argentina SA with digital radio systems. Intracom said the value of the contract could reach $6 million by next year, depending on the results of the initial pilot contract. The company said it's designed and built the digital radio systems it's supplying. Earlier this month, Intracom won three-year contract worth
more than $100 million for the supply of equipment and services to upgrade Armenia's telecommunications network.
SBC Communications Completes Acquisition of Cellular Communications of Puerto Rico
SBC Communications has completed its US$814 million acquisition of Cellular Communications of Puerto Rico. Through the acquisition, SBC will gain control of wireless licenses in Puerto Rico and the US Virgin Islands. Under the terms of the original deal announced in May, SBC and Telmex agreed to purchase the company through a joint venture but regulatory reviews held up the transaction. Under the terms of a separate deal announced on August 24, SBC will retain management control of the wireless company but will self half of its ownership with Telmex. The FCC must still approve this transfer.
SUBMARINE FIBER OPTIC NETWORKS
Global Crossing Completes Upgrade on Trans Atlantic Route
Global Crossing Ltd. has completed the first upgrade of its Atlantic Crossing 1 transatlantic cable system. AC-1 service capacity is now 80 Gbps, twice the initial system capacity. The company accelerated its initial upgrade schedule by 18 months in an attempt to meet broadband demand on the US Europe route. In addition, Global Crossing recently contracted for a second upgrade to 60 Gbps with a ready service date of March 2000.
Headlines - August 24, 1999
TOP STORIES
ASIA PACIFIC
EUROPE
INDIA
INTERNET/E-COMMERCE
TOP STORIES
SBC Communications to Offer New Phone Service Bundles in Two Market to Compete with AT&T
As the battle of the bundles begins to pick up speed in the local telephone market, SBC Communications will launch a new bundled telephone service package. The San Antonio-based Baby Bell plans to offer discounted packages that include Internet, entertainment and local telephone services to consumers in Fremont, CA, and Dallas, TX, two markets that AT&T has targeted for its own bundled offerings. Through its acquisition of Tele-Communications cable television network, AT&T has begun to offer local long-distance phone service. In response to Ma Bell’s move, SBC’s Pacific Bell has introduced similar bundled service packages, including DirecTV satellite TV service through a relationship with General Motors Corp.’s Hughes Electronics, for 6 percent to 35 percent less than customers would pay if they ordered these services separately. Customers have the flexibility to choose from bundles that mix and match offerings such as wireless and high-speed Internet with local phone service, and can
gain access to DSL service. However, one element that is missing from SBC’s plan is the ability to offer long-distance service. Under the terms of the 1996 Telecommunications Act, SBC and the other regional Bell operating companies are barred from offering long-distance services in their areas until they prove that their lines are open to competitors. No Bell company has won such permission
Sun Microsystems to Acquire Forte Software Inc. for $540 Million
Sun Microsystems will acquire Forte Software Inc., a producer of programming tools for $540 million in stock. The deal, which is valued at $22.275 a share, represents a 31 percent premium to Forte’s closing price $1`7 a share on Friday, August 20. Shares of Forte rose $4.125 today, to $21.125, while Sun rose 56.25 cents to $74.8125. Through its acquisition of Forte, Sun we be able to expand its reach to sites using IBM’s System 390 mainframe computer systems and Microsoft’s Windows NT. Companies use Forte’s software tools to further integrate applications like sales force automation and call center management, or front office applications.
ASIA PACIFIC
Zenith Electronics Makes Prepackaged Bankruptcy Filing with Court and Will Become Wholly Owned Subsidiary of LG Electronics
Zenith Electronics Corp. has made its prepackaged Chapter 11 bankruptcy filing in US Bankruptcy Court, the first formal step in a procedure that will make the television manufacturer a wholly owned unit of its largest shareholder, South Korea’s LG Electronics Inc. Under the terms of Zenith’s plan, all outstanding common stock will be canceled, and stockholders, including 55 percent owner LG Electronics, will receive nothing for their existing equity stakes. Upon completion of the proceedings, LG Electronics will receive complete ownership in Zenith in exchange for $200 million owed by Zenith. In addition, LG will receive certain Zenith production assets in exchange for forgiving certain other debt Zenith owes.
Tiger Management Sells Stake in SK Telecom
Tiger Management has reduced its stake in the SK Telecom Corp., selling shares to the Korean company’s parent a month after investment and vowing to fight management. Two SK Group units bought shares from Tiger and other investors for $820 million, increasing the company’s stake in Korea’s largest mobile phone company to 36.5 percent from 27 percent. Tiger, a major hedge fund, earned a 30 percent return by selling shares it bought last month.
EUROPE
Ericsson Wins US$142 Million GSM System Deal from Morocco’s Medi Telecom
LM Ericsson Telefon AB has won a US$142 million GSM system deal from Morocco’s Medi Telecom. Medi Telecom recently won a license to operate the second GSM network in Morocco. A consortium, whose main shareholders are Morocco based BMCE Bank, Afriquia Group, Telecom Portugal and Telefonica SA own the company. Work on the GSM system is scheduled to begin in January 2000, and when fully completed will provide national coverage.
Racal to Divest itself of its Telecommunications and Defense Units for 1.5 Billion Stg
Racal Electronics PLC is preparing to sell its telecommunications and defense arms, which could together raise about 1.5 billion stg. Analysts said that Racal has had approaches for the defense electronics operations which is valued at up to 500 million stg, from DaimlerChrysler Aerospace AG and Thomson CSF. Potential suitors for Racal Telecom include Energis, Scottish Telecom and Callahan of the US. The breakup of the company will be announced over the next two to three months.
Telefonica and DoubleClick End Strategic Alliance
Telefonica SA and DoubleClick have ended their strategic alliance and joint venture DoubleClick Iberamerica. Currently, Telefonica holds 90 percent of the joint venture, which was created with share capital of 149 million ptas, to market Internet advertising in Spain and Latin America, with DoubleClick holding the remaining 10 percent. The joint venture was part of Telefonica’s Telefonica Publicidad e Informacion yellow pages unit, but it was transferred to Telefonica’s Telefonica Interactiva SA unit ahead of the former’s initial public offer. Antonio Botas, chairman of DoubleClick Iberoamerica will likely leave the company to head a new Internet publicity arm at Telefonica Interactiva, without the DoubleClick brand or technology, but with the venture’s 27 Internet web sites and current clients.
Tesco PLC to Launch Internet Cafes
Tesco PLC will launch a chain of Internet cafes in a bid to encourage the growing number of web enthusiasts to linger longer in its stores. Details of the project will be announced during the next few weeks. Also, the food retailer is stepping up its commitment to home shopping on the Internet, and five stores a week will go online with Internet home shopping.
UK Racecourses to launch tax-free Online Betting
Owners of Britain’s 59 racecourses will launch their own tax-free bookmaking business to bring low-cost betting direct to millions worldwide. The Racecourse Association, the trade body, is developing the new company, which will be called UK Racing Online, for racecourse owners, aiming to take bets for the beginning in April 2000 at the Grand National at Aintree.
INDIA
Inet Makes Effort to Boost Y2K Compliance
With a few weeks left to meet the September-end deadline for Y2k Compliance, Inet, a major network of the Department of Telecommunication (DoT), is yet to become compliant. Inet, a public data network currently operational in eight cities and used for e-mail, database services, credit card verifications, travel reservations and corporate communication - will, however, achieve compliance by the end of October. Though full compliance in the telecom sector would be achieved by November end, most of the DoT systems would be compliant by the end of next month, says a DoT report on Y2K preparedness in the telecommunications sector presented to Mr. K.C. Pant, deputy chairman of Planning Commission, on August 20. With the exception of Videsh Sanchar Nigam Ltd. (VSNL), which would achieve compliance by October end, the rest four public sector units (PSUs) under Bangalore-based Indian Telephone Industry (ITI), Chennai-based Hindustan Teleprinters Ltd. (HTL), Technology Corporation of India Ltd. (TCIL) here and Mahanagar Telephone Nigam Ltd. (MTNL) Y2K compliant. More than 90 percent of DOT's satellite and switching systems are compliant and the rest would achieve compliance within two/three months.
Crompton Greaves to Sell Skycell Stake for INR 2 Billion
Crompton Greaves will sell its 40 percent stake in the Chennai Skycell Cellular project for over INR 2 billion and the deal is likely to be finalized by September. The company has asked the investment banker the Investment banker ABN-AMRO to finalize the deal by September after getting bids form the interested parties. Escotel and Srinivas Cellcom had approached ABN-AMRO evincing interest in the 40.5 stake and have been provided with details of the project. The deal would fetch the company much in excess of its earlier demand of INR 2 billion. The proceeds from the deal, expected during the next quarter, would be used to retire the short term debts and would be reflected in the current year's balance sheet, Mr. Nohria said, adding, thereafter the company's debt-equity ratio would come down drastically.
Hughes Satellite Systems to Dilute Holding in Escorts Venture to 49 Percent
Hughes Satellite Systems has decried to divest control in its joint venture company, Hughes Escorts Communications Ltd. (HEC). From 51 percent, Hughes plans to drop its holding by two per cent to 49 percent. This divestment, although forced upon it, would assure the joint venture its V-Sat project is operational, after a nearly three-year conflict with the government. The project had been on hold for many years and could not get off the ground for several reasons, the most significant being its equity stake and the permissible equity levels stipulated by government policy. Apparently, Hughes wanted to have direct holding and control in the V-Sat joint venture, which was in contravention of policies stipulated by the Department of Telecommunications (DoT). While this was the case, Hughes preferred to stick to its guns and fight it out with the government and has been at it since 1996. The joint venture-HEC was established in 1992.
Bharti Telecom Spins Off its Telephone Handset Manufacturing Units
As part of a major restructuring exercise, Bharti Telecom has hives off its factories manufacturing telephone handsets and other items to a new company called Bharti Teletech. At the same time, Bharti Telecom is holding talks for mergers and acquisitions in the mobile telephony business. It is also finalizing plans to expand basic telecom services in Punjab, Karnataka and Andhra Pradesh when the next round of bidding takes place later this year. Bharti Telecom is 51 percent owned by Bharti Enterprises, the apex holding company of the Bharti group. Bharti Global, an UK-registered subsidiary of the group, holds the remaining 49 percent. The restructuring process to separate the services and manufacturing operations of Bharti Enterprises began last year. The group provides cellular services in Delhi and Himachal Pradesh, besides fixed-line phone service in Madhya Pradesh under the brand name Airtel. The new entity, Bharti Teletech, will have three operating units called Siemens Telecom, Bharti Dura-line and Goa Telecom. The manufacturing facilities are located at Gurgaon, Ludhiana and Goa. Mr. Mittal said Bharti Teletech, including its wholly owned subsidiary Goa Telecom, will have a combined net worth of INR 760 million. Bharti Telecom, the services division will now have two operating arms: Bharti Tele-ventures and Bharti Tele-spatial. Under Bharti Tele-ventures will be the operations of Bharti Cellular, which provides cellular services in Delhi and Himachal Pradesh besides those of Bharti Telenet, which provides basic services in Madhy Pradesh.
Cellphone Usage Soars in Mumbai
According to officials at BPL Mobile and Hutchison Max, cellular phone usage in Mumbai has virtually doubled over the past year and may reach the levels of some developed countries once incoming calls are made free from November 1, The two cellular operators in Mumbai together account for a subscriber base of about 3 lakh. This is expected to rise to 5 lakh over the next year. Since May 1, when tariffs were lowered by the Telecom Regulatory Authority of India (TRAI), cellular usage in the country's commercial capital has risen 25 percent to an average of 250 minutes per subscribers per minutes per subscriber per month against 200 minutes per month before the tariff cuts. Although subscriber numbers have not increased dramatically with the simultaneous hike in the monthly rental, Mumbaities are using their cellular much more and the spate of innovative tariff plans being doled out by the cellular operas is only helping the cause.
INTERNET/E-COMMERCE
Bertelsmann Sells 7.2 Million Shares America Online
Bertelsmann AG had recently sold half of its stake in America Online, leaving its with 0.7 percent shares outstanding. In a statement, Bertlesmann said that the sale was related to its acquisition of book publisher Random House Inc. in February 1998. On Thursday, August 19, AOL’s stock fell $3.1875, or 3 percent, to 96 in New York Stock Exchange composite trading on volume of 13 million shares. AOL shares closed at $99 yesterday, up $3.8125. The German company plans to use the proceeds of the stock sale for further development of its Internet business, including the expansion of AOL Europe. Since 1995 Bertlesmann has been a major shareholder when the two companies partnered to create a European version of AOL. AOL spokesman would not comment on the Bertelsmann sale.
Ebay Reduces New Fee and Delays Plan to Change Bidding Policies
In response to protests from customers, online auctioneer EBay has decided to reduce a new fee and suspend plans to change bidding policies for certain items. On Friday, August 20, the Ebay notified users that it would charge sellers $1 for reserve price auctions, where sellers set an undisclosed minimum price, below which they will not sell the item. Also, the company would require sellers to set opening bids for reserve auctions at 25 percent of the specified, or reserve, price. Ebay defended the new measures arguing that it was acting to protect buyers, who complained that they did not know when items offered for sale carried reserve prices. According to an Ebay spokesperson, the fee was designed to reduce reserve price auctions and to offset the additional costs of handling e-mails from frustrated buyers. Currently, reserve auctions make up about 15 percent to 20 percent of eBay auctions.
Yahoo Expands Music Downloading Capabilities
Yahoo has decided to expand its music related offering with a Web site that lets users download music, watch and listen to concerts, and eventually will let users self-publish and sell their own music online. Following this announcement, the shares of Liquid Audio Inc., a producer of music delivery software, rose 14 percent to $26.50. However, the deal did not have much of an effect on a second partner, EMusic.com.
Mail.com to Acquire Allegro Group for Undisclosed Amount
Mail.com has reached an agreement to acquire Allegro Group, a provider of corporate e-mail services, for an undisclosed amount of cash and stock. This acquisition is a sign of Mail.com’s continued expansion into the lucrative corporate e-mail management business. In addition to providing e-mail services to Web sites, corporations and Internet service providers, the company provides free e-mail boxes directly to consumers, competing with others such as Microsoft Corp.’s Hotmail service. Allegro manages and hosts the e-mail systems of more than 1,000 corporate customers, including Continental Airlines and Daimler Chrysler AG’s Mercedes Benz.
Headlines - August 23, 1999
TOP STORIES
EUROPE
FIBER OPTICS
INDIA
INTERNET/E-COMMERCE
JAPAN
TOP STORIES
Sprint Shares Drop 8.3 Percent in Response to Analysts’ Long Distance Concerns
In response to analysts concern over pricing pressure in the company’s core long distance business, shares of Sprint Corp. fell 8.3 percent. In New York Stock Exchange composite trading Friday, Sprint’s shares fell $4.0625 to $45. The market’s reaction underscores growing concerns about the impact of competition in the long-distance market. For example, Qwest Communications is adding new players to price aggressively to fill their networks with traffic. Also, the Bell companies pending entrance into the long-distance market in 2000 will also add to the competitive arena. Wall Street has expressed concerns over Sprint’s ability to compete against long distance giants such as AT&T and MCI WorldCom. Sprint has made an effort to steer clear of the telecommunications consolidation frenzy of the past three years.
PSInet Gains Stance in E-Commerce Market with Acquisition of Transaction Network Services for $705 Million
To gain a strong stance in the burgeoning e-commerce market PSInet will acquire Transaction Network Services Inc. for $705 million. Both boards of directors have approved the transaction and the formal announcement is expected today. Through their acquisition of Transaction Network Services, PSInet will be able to expand into a global Internet service provider for businesses, offering a full package of services to customers. The main source of revenue for Transaction Networks comes through providing network services at the point of sale, such as credit card and calling card transactions. In addition, the company is becoming a major player in providing authorization services for Internet transactions, handling eight million electronic commerce purchases last month alone. Upon completion of the acquisition, PSInet will gain access to technology for sending transactions quickly along the Internet, as well as a ready base of retailers who might shift their systems onto the Internet. PSInet
sees the deal as a means to further expand their international presence. In recent years, the company has purchased a number of smaller Internet service providers in Latin America and Europe and has expanded into the 20 largest telecommunications markets.
WIND Telecommunicazioni to Oust Two Telekom Directors
WIND Telecommunicazioni will make another attempt in September to rid itself of two board members representing partner Deutsche Telekom, as the fallout from German group’s failed attempt to merge with Telecom Italia continues to spread. WIND, the fixed mobile telecommunications group controlled by Italian utility ENEL, Deutsche Telekom and France Telecom, has been under serious strain since Deutsche Telekom tried in July to merge with the group’s main competitor. Because of that move, WIND and France Telecom have said they consider their partnership with the Germans to be finished, and have been looking to oust Deutsche Telekom’s two representatives from WIND’s board. The company on Friday called shareholders meeting for September 14 or 15 to expel the German group’s two board members. Previously, WIND made an attempt to expel the German group’s two board members, but technical reason stemming from a decision in German court regarding a complaint Deutsche Telekom had filed to block
such a move preventing the company from doing so. Now WIND will base its ouster attempt on Italian law allowing for the disenfranchisement of board members at its Nordic paper mills, about half of al its electrical power operations.
EUROPE
US Shareholder Seeks to Block British Telecom Cellnet Deal
British Telecommunications PLC could be forced to renegotiate the complex 3.1 billion stg deal that delivered it full ownership of its Cellnet mobile phone subsidiary. The deal involved Securior PLC, which helped set up Cellnet, selling its 40 percent stake in the company to BT. However, K Capital Partners, a US investor in Securior was objecting to the deal, arguing that "there seems to be a consensus among people that the valuation is too low." Kurtin wants Securior to either spin off its security, communications and distribution divisions or regenerate the deal, otherwise, he wants shareholder to block the deal.
Eriscsson, Libertel and Industriebank LIOF to Form Joint Mobile Services Venture
LM Ericsson Telefon AB’s Dutch subsidiary, Libertel Group NV, and Dutch regional development bank Industriebank LIOF have agreed to launch a mobile telephone services venture in the Netherlands. The companies will construct a support service center near the southern Dutch-German border to back up Libertel’s GSM network, which will also house training and joint research and development facilities. The new joint venture, to be called I-tractive, is expected to be operational by the fourth quarter of next year.
Bluetel Mobile Phone Operator to be Operational by March 2000
Bluetel, Italy’s newly appointed fourth mobile phone operator, will be operational by March 1, 2000. The company plans to hold its first board meeting and shareholders meeting on September 20 in Napoli to define an organizational structure. The new structure will include a board of four directors to be appointed by Autostrade SpA, a majority shareholder, three directors to be appointed by British Telecommunications PLC and several directors appointed by Edizioni Holding, Banca Nazionale di Lavoro SpA, Mediaset SpA, ENI SpA, Italgas SpA, Caltagirone SpA and Distacom. The company plans to deploy UMTS technology for multimedia, and will develop its activities using the 3,250-km of fiber optic cable running along Autostrades’s motorway network.
Deutsche Bank NordLB Group Makes Bid for Cable TV Network in Bremen and Lower Saxony
A consortium made up of Deutsche Bank AG unit DB Investor Norddeutsche Landesbank and regional utility EWE AG will bid for Deutsche Telekom AG’s cable TV network in Lower Saxony and Bremen. Deutsche Telekom is planning to split its cable TV network into regional operators and sell at least 74.9 percent by 2000.
Nemetschek Acquires 80 Percent Stake in APSIS Software
Nemetschek has acquired an 80 percent stake in Munich based APSIS Software AG for an undisclosed sum. APSIS, which has annual sales of 4 million-DM and 20 employees, develops cost and planning management software, especially for architects and construction engineers. The acquisition will lead to enormous cost reductions in the whole IT software market.
FIBER OPTICS
Motorola to Unveil New Feature to Improve Digital Television Signal
Motorola Inc. will unveil a new technology that will solve one of the problems plaguing the transmission of digital television signals. The company said the new technology, which is called MCT2100, will reduce the effects of multiple reflections. Multiple reflections are caused when an obstacle, such as a building or a car, interferes with a digital signal. For example, when a big truck rumbles past the family den, these multiple reflections make the picture on a TV screen get fuzzy. Other TV makers such as Sony Corp. and Matsushita Electric Industrial Co.’s Panasonic Unit are developing their own digital reception technologies.
INDIA
Government to Divest 1 Million Shares in VSNL for INR 750
The government has decided to divest 1 million shares in VSNL at INR 750 each from September 17, a senior finance ministry official said on Friday. The core group of secretaries on divestment took the decision, said the official.
Telecom Regulatory Authority to Reject Usha Martin’s Plan to Cancel Airtime Incoming Call Charges
The Telecom Regulatory Authority of India has decided to block Usha Martin’s plan to cancel airtime charge for incoming calls. Further, the tariffs reported by Usha Martin changed the standard tariff package specified Tariff order (TTO), 1999, according to an official release. An examination of the tariffs notified by Usha Martin shows that if the proposed tariffs are implemented in their present form, they are likely to cause network congestion, thus affecting the capability of service providers to provide quality service to customers. The proposed tariff is likely to result in an asymmetric flow of traffic between fixed and mobile networks due to callback effect. The callback adversely affects network performance and quality of service available to the customer. TRAI has received written submission from the industry conveying these points, according to the release.
Mobile Phone Users call for INR 2 Per Minute Airtime Charge
A body of mobile phone users has approached the Telecom Regulatory Authority of India (TRAI), seeking to fix a flat airtime charge of INR two per minute considering the implementation of new telecom policy, from August one. In a letter to TRAI, the Indian Mobile Phone Users Association has demanded passing off benefits of the new policy to the subscribers since it felt that with the switchover from license fee to revenue sharing, cellular operators could soon stabilize their operations. Since the operators are going to pay the Department of Telecom to pay the Department of Telecom (DoT) on the basis of revenue sharing from August one, mobile phone users must also get the benefit retrospectively from that date, the association informed the regulator. TRAI has fixed an upper ceiling for airtime charge at INR six per minute and a monthly rental of INR 500 by its March order. The Calling Party Pays (cpp) system providing free incoming calls is expected to come into force in a few months.
Satyam Infoway to Invest INR 500 Million to Build New Internet Gateway
Satyam Infoway is planning to set up its own gateway up with an investment of INR 500 million by the end of this year. The company, which operates on 22 MBPS lines leased from Videsh Sanchar Nigam Ltd. (VSNL), has also earmarked another INR 500 million for its expansion plans. Pradeep Lakshmanan, Vice President of Internet operations, said on Friday that the ISP would have 32 MBPS of bandwidth by the end of September, which would continue to be used along with the gateway likely to be commissioned by the end of the year. Lakshmanan said Satyam Infoway, a wholly owned subsidiary of Satyam Computer Services Ltd., was inclined to take the satellite route for its gateway rather than cable, since the former would prove to be more cost-effective. The gateway would also offer service to category 'B' and ‘C’ ISPs, he said, but skirted query on any acquisitions by the category 'A' leader to increase its base. The INR 500 million investment would come form internal accruals, but declined to
comment on the progress of talks with America OnLine (AOL) which is eyeing a piece of the Indian ISP pie. Lakshmanan said Satyam was in process of expanding its reach in terms of subscribers as well as Points of Presence (PoPs). The ISP currently has about 22 PoPs with a subscriber base of 70,000 and is looking to increase it to 2,00,000 subscribers across 50 centers within a year.
Zee Telefims to Build Own Earth Station
ZEE telefilms Ltd. will set up its own earth station, making it the first Indian Company to do so. This earth station is coming up primarily to facilitate live coverage of the incoming general elections. Zee Telefilms uplinks through one of the six nodes of VSNL's earth stations located at Dehradun from where the signals go to Hong Kong and are transmitted back to India. This process takes about 45 minutes, while through its own earth station Zee will be able to transmit its signals within a very short time. Although coverage through this earth station would not be live, quick incoming signals were likely to give Zee an upper edge during the elections as also new coverage against its competitor, mainly Doordarshan, while already had a vast network.
Start Up Ironbridge Networks to Raise $50 Million in Private Financing
Ironbridge Networks expects to raise about $50 million in private financing by the end of 1999, which would likely lower Newbridge Network Corp.’s controlling stake in the startup to a minority position. Also, the company, which is based in Lexington, MA, plans to play an important role in Newbridge’s strategy for supplying Internet-based networking gear. Newbridge, which is primarily a maker of ATM switches, has begun to shift its focus towards offering Internet-based equipment. In addition to Ironbridge, Newbridge Network has been working with Northchurch Communications Inc. an Andover, MA-based startup, which makes high-speed routers. As part of its plan to go public through an eventual public offering, Ironbridge’s president and CEO Paul Lazay, said that the company plans to raise the $50 million in several stages between now and the end of 1999. Also, Ironbridge continues to negotiate with Newbridge on a deal to distribute its terabit routers. Ironbridge first announced those
talks on April 29.
JAPAN
NTT Regains Reclaims Number One Spot Declared Income Earner
Nippon Telegraph and Telephone Corp. reported the largest declared taxable income in its 1998 business year, reclaiming the position for the first time in three years. Although NTT posted declines in sales and pretax profit due to cuts in telephone charges, the company declared 946.69 billion yen in income, up 3.7 times over the previous year. The higher income was the result of a windfall profit from the sale of shares in NTT Mobile Communications Network Inc. on the occasion of the subsidiary’s listing on the First Section of the Tokyo Stock Exchange in October 1998. During 1997, NTT ranked third.
Resetting of Global Positioning Satellites Systems Causes Problems in Japan
Hundreds of people complained today to Japanese car-navigator manufacturers about breakdowns caused by the resetting of time mechanisms in Global Positioning System satellites. However, few problems were reported after the timing system for the 24 satellites of the Global Positioning System, which is widely used by planes and ships for assisting with navigation, was switched back to zero just before 7 PM, Eastern time, on Saturday. The rollover was necessary because the system, which uses radio signals from satellites to provide navigation data, was designed to ignore calendar dates but keep precise time measure in seconds and weeks. Only 1,024 weeks were allotted from January 6, 1980, before the system had to be reset. Serious consequences were not expected because only some older receivers were thought likely to run into trouble when the clock struck zero. In Japan, the screens on some car navigation systems went blank while others froze, the Pioneer Corp. said. |
