Headlines - October 1, 1999
TOP STORIES
CHINA
EUROPE
INDIA
INTERNET/E-COMMERCE
SOFTWARE
TOP STORIES
BellSouth to Request FCC Permission to Offer Long Distance Service in Georgia
Just days after fellow Baby Bell company Bell Atlantic made its own filing with the FCC to enter New York’s long distance market, Bell South announced plans to request the FCC for permission to offer long-distance services to local customers in its home market of Georgia. The company will make its application to the FCC as soon as it completes a test of its systems for connecting its rivals to its customer lines.
America Online Makes Effort to reinvigorate its European Presence
After its dominant presence in the UK Internet market was beat out by Freeserve PLC, a free service that offers Internet access for the price of a local phone call, the company is taking steps to regain its prominence in the UK and Europe. First, it reduced its service prices in Britain last week and launched a flat rate in Germany to undercut T-Online. In addition, it will develop a plan to make personal computers more affordable in Europe, where home PCs are less common than in the US and average incomes are lower. The Internet giant is currently in talks with several PC manufacturers about offering rebates to new subscribers and could announce a deal within the next few weeks. However, AOL will have to pull itself out of a glut that stopped at 900,000 customers, while Germany’s T-Mobil has surpassed that mark since it reduced its prices in April.
Williams Communications Launches Initial Public Offering on New York Stock Exchange
Williams Communications Group. launched an initial public offering of 29,600,000 shares of common stock at a price of $23 per share. The company anticipates the stock to begin trading today on the New York Stock Exchange under the symbol WCG. Managing the IPO are Salomon Smith Barney Inc., Lehman Brothers Inc. and Merrill Lynch & Co. Williams Communications has granted the underwriters a 30-day option to purchase up to 4,440,000 additional shares of common stock to cover over-allotments, if any, and represents approximately seven percent of WCG common stock. An additional seven percent is being sold through private placements to SBC Communications, Intel Corp. and TELMEX.
CHINA
China Telecom 2000 Conference Early Registration Expires Today
The deadline for a 10 percent registration fee discount for the China Telecom 2000 is here today October 1. For additional information contact: Corey Hollister, Director of Events, IGI, Tel: 1-800-323-1088, or 1-617-232-3111, Fax: 1-617-734-8562, E-mail: corey@igigroup.com. You can register on line at Web: www.igigroup.com.
China’s Telecom Market Continues its Sustained Growth
In the first eight months of this year, China has invested a total of RMB58 billion (US$7 billion) in telecom fixed assets. The annual total investment in telecom is expected to reach RMB120 billion (US$14.5 billion), which represents a slight decline over last year. By the end of August, the toll switching capacity had increased by 79,000 lines, and local network switching capacity increased by 13.42 million lines. The local telephone network switching capacity in China reached 148 million lines by the end of August. The mobile phone network capacity increased by 24.59 million lines, totaling 58.46 million lines. China had over 100 million fixed telephone subscribers by the end of August, a net increase of 14 million in the first eight months of this year.
Beijing Telecom to Deploy Broadband Access Technologies
Beijing Telecom is planning to deploy broadband access technologies in the capital city in order to build a broadband network. Beijing Telecom has installed over 100 fiber optic rings by the end of February 1999. Key drivers for the high speed transport and access networks are the growth of the Internet subscribers and the government on line projects. The CATV operator has also put much competitive pressure on the local telecom service provider. The Beijing broadband trial network will have an ATM-based backbone. The operator is also examining the DWDM technology for future capacity expansion. Major broadband access technologies such as optical access, xDSL and HFC will be used for the access layer.
China Railway Paging Co. Now Reaches One Million Subscribers
China Railway Paging Co. has over one million subscribers, growing by 100 percent since August last year. The network has covered over 100 cities nationwide.
Wuhan Research Institute (WRI) Signs SDH Equipment Contract with Anhui Unicom
The Wuhan Research Institute has signed a contract with Anhui Unicom for the supply of SDH transmission equipment. The equipment will used in the third expansion of Unicom’s GSM Network.
Unicom to Trial LMDS Broadband Wireless Access Technology
China Unicom has signed an agreement with US-based P-Com Inc. to conduct a trial on the LMDS broadband wireless access technology using equipment provided by P-Com. Local multipoint distribution service (LMDS) is a broadband wireless point-to-multipoint communication system operating above 20 GHz that can be used to provide digital two-way voice, data, Internet, and video services.
Tianjin Unicom Has Invested RMB450 Million (US$54 Million) in Local Network
Tianjin Unicom has invested RMB450 million (US$54 million) in its local telephone network in Tianjin. The network has a switching capacity of 83,000 lines and a trunk relaying capacity of 20,000 lines. The company has also built a data communications network with a capacity of 400 ports.
EUROPE
Olivetti’s Colaninno Makes Move to Brake Fall in Share Prices
Feeling the sting of his decision to strip Telecom Italia of its most valuable asset, the highly profitable cellular phone unit, Telecom Italia Mobile, and transfer it to Tecnost, Olivetti SpA chief executive Roberto Colaninno decided to meet with investors to stop a flight of investment capital from the Italian telecommunications giant. The move was intended to help Tecnost pay back the debt it took on to finance the US$33 billion acquisition of Telecom Italia SpA. For the second consecutive day, stock investors punished the company by driving down the price of Olivetti shares 3.7 percent, after a 7 percent drop on Wednesday; Tecnost shares fell 4.4 percent, after an 11.4 percent loss Wednesday, September 29. At the outset, Colaninno said that this move is part of an industrial plan, and not strictly a financial maneuver. The stock of Telecom Italia gave up nearly 3 percent. The only segment that was not affected by the decline was the cellular phone unit Telecom Italia Mobile, whose shares rose added nearly 3 percent. The reaction to Colaninno’s move contrasts the triumph that he enjoyed in May when Olivetti succeeded in acquiring a company more than five times its size.
Telefonica Internet Unit Telefonica Interactiva Renamed Terra Networks
Telefonica SA has renamed its Internet unit Telefonica Interactiva has been renamed Terra Networks SA, noting the unit will operate under this new name in both Spain and America. In a letter to employees, Terra Networks chief executive Juan Perea said, " The company needed a global identity, which would distinguish us from other Internet users as a major player in the Spanish and Portuguese speaking markets." Before the end of the year, Telefonica plans to make a public offering of 20-30 percent of its Internet unit and will seek a listing on NASDAQ.
Nokia Launches Mobile Internet Service at Telecom ’99 Trade Fair in Geneva
Nokia Corp. has launched a new mobile Internet service at the Telecom ’99 fair in Geneva for wireless application protocol compatible environments, and provides subscribers with a personal portal interface. "Nokia believes in the potential of the mobile Internet. The purpose of this open application development framework concept is to open up the mobile Internet to existing Internet applications, moving us closer towards Nokia’s vision of the mobile information society," said Nokia Networks vice president for wireless systems Pekka Salonoja.
France Telecom to Sell 20 Percent Stake in Greece’s Panafon
France Telecom will sell its 20 percent stake in Greek mobile phone operator Panafon, which has a current market value of US$1.4 billion. The sale will be effected through an offer to institutional investors, another to Greek private shareholders and a third to Panafon employees, together comprising two-thirds of the stake and through an offer of convertible bonds for the remaining one-third.
UPC Consortium Wins Bid for Czech Mobile Telephony Frequency
A consortium including United Pan European Communications NV unit Priority Telecom has placed the winning bid for the third mobile telephony frequency which was put up for tender by the Czech government. The sales is seen as a further step towards complete liberalization of the Czech mobile phone market, and is expected to increase competition for the mobile telephony unit of Czech telecom company SPT, in which Royal KPN holds a considerable interest.
Motorola and Deutsche Telekom’s T-Mobil to Expand UK GSM Network
Deutsche Telekom AG’s unit T-Mobil received an $43 million order from Motorola to expand its T-D1 network. This award follows the US$47 million deal announced in July, covering the implementation of GPRS-enabling infrastructure and GSM network expansion to the end of 1999. Under the terms of the new contract, Motorola will have the responsibility for ongoing enhancement of the T-D1 network into the year 2000. T- Mobil will carry out field trials of Motorola’s General Packet Radio Service data communications infrastructure and handsets.
Deutsche Telekom Acquires 34 Percent of Secunet Network Security Service
Deutsche Telekom has acquired a 34 percent stake in the network security service provider secunet Security Networks AG. No financial terms of the deal have been disclosed. Secunet plans to list on Germany’s Neuer Markt stock exchange segment in November. Following the listing, Deutsche Telekom’s stake will be reduced to 25 percent after the listing, and the free float will be above 20 percent.
INDIA
AT&T/British Telecom Global Venture to Use Volume to Lower Rates with VSNL
The AT&T-British Telecom (BT) global venture, which today unveiled its global brand, will carry over 300 million minutes of telecom traffic from and into India. The global venture, which will combine the transferred assets of the two telecommunications giants, is likely to use the higher combined volumes to push down accounting rates with Videsh Sanchar Nigam Ltd. (VSNL), India's sole carrier of international voice services The profile of the VSNL South Asia hub venture, for which the Indian PSU is already negotiating with BT, could also stand to change. The AT&T-BT global venture announced that its services would be marketed under the brand name "Concert" after the multinational corporate services business already owned by BT. In India, it is likely that the relevant offices handling the bilateral traffic would be merged while the in-country assets, including the ventures for various cellular and value added telecom services, would continue to be handled separately.
Net4 to Offer Free Dial-Up Internet Accounts
As part of a "beta" launch, private Internet Service Provider Net4India, will offer a beta version of 1000 free dial-up Internet accounts. Net4India will use feedback from these users to iron out any glitches in its network prior to the formal launch next month. The 100 users who will be chosen randomly out of those who register with the company at net4india.com or by dialing their call center (6153340). The ISP, which is being promoted by the UK-based Sawhney Group, holds a Category B license and intends to initially launch services in Delhi. There are also plans to franchise the service by joining forces with Tier C ISPs. The company will invest Rs 25 crore in the next year devoted small and medium enterprise (SME) and home markets.
VSNL and MTNL to Offer Joint Telecom Solution
Videsh Sanchar Nigam (VSNL) and Mahanagar Telephone Nigam (MTNL) plan to jointly explore business opportunities in the country and abroad, VSNL chairman and managing director SK Gupta said at the company's 13th annual general meeting here on Thursday. As per the memorandum of understanding (MoU), the two companies will pool their resources, including expertise, to deliver telecom solutions in India and abroad. This will help them emerge as market leaders in an increasingly competitive world. Liberalization in the telecom sector will help VSNL increase revenue and enhance its product portfolio, Gupta said. The company will play by the new rules, which reflect a transition from high cost telephone-dominated to low-cost information-based services. VSNL is poised to emerge as a strong player in this new environment.
Rail India Technical & Economic Services Ltd. to Form Joint Venture for Fiber-Based Telecommunications Network
Rail India Technical & Economic Services Ltd. (RITES), a public sector undertaking, is will form a joint venture to launch a fiber optic network. In the first phase, the joint venture will lay and commercially exploit a fiber optic-based telecommunications network along the railway track on the Mumbai-Chennai section for which the Ministry of Railways has given RITES the right-of way. RITES has achieved a record turnover of INR 1.42 billion during 1999 against the previous year’s total value of new products secured was also an all time high of INR 2.10 billion, up from INR 1.17 billion in the previous year.
Private Telecommunications Carriers Form Alliance to Join Long Distance Market
Private telecom operators have launched a move to form grand operators to enter the domestic long distance (DLD) services. The strategy envisages operators joining hands on the border circles. Though the proposals to that effect had been submitted to the Telecom Regulatory Authority of India (TRAI) by the Cellular Operators Association of Basic Telecom Operators (ABTO) some time ago, the move has gained fresh impetus with the date for opening up the domestic long distance routes for competition drawing closer.
VSNL Expects International Tariffs to Decline 20 Percent in Next 3-4 Years
VSNL is expecting tariffs for international calls to be slashed further by 20 percent annual over the next 3-4 years. Speaking at the annual general meeting, S K Gupta, chairman and managing director, VSNL Stands to benefit from the increased outgoing volumes from India, and a favorable in coming to outgoing ratio as compared to the past because of falling rates." VSNL is also taking initiatives to latch on to opportunities in Internet, broadcasting and multimedia services. At the same time, it is also planning to enter into domestic long distance services which will thrown open to the private sector next year. The company has planned a capital expenditure of INR 70 billion to transform itself into a multi-service diversified company form a largely telephone-oriented international carrier.
Association of Basic Telecom Regulatory Authority Seeks Level Playing Field for Private Operators
Raising the demand for a level-playing field for private basic telecom operators, the Association of Basic Telecom Regulatory Authority of India to ensure that the Department of Telecom and Mahanagar Telephone Nigam Ltd. be also subject to the same terms and conditions as new private players. This is a moment in time when the entire exercise of opening up of the telecommunications sector is nearly a decade old and has not been completely successful in achieving its goals," said ABTO secretary general S C Khanna in a letter to TRAI chairman Justice SS Sodhi. Private players already licensed and the new ones should have the access to the same rights of way that DoT MTNL has for laying telecommunications cables and networks.
INTERNET/E-COMMERCE
Amazon.com Launches zShops to Enable Retailers to Set Up Online Shops
To promote healthy growth in e-commerce, Amazon.com has adopted a new program that will enable any seller to establish an online store and sell their products over the Internet via Amazon.com’s Internet site. ZShops will enable anyone, from major manufacturers to backyard businesses, to offer merchandise for sale at Amazon.com. A key feature of the program Amazon.com payments will allow individuals and small businesses to accept payments through Amazon.com’s one-click payment feature, eliminating the need to send checks and money orders through regular mail.
SOFTWARE
Novell Acquires Major Stake in Whitman Hart Inc
Novell Inc., a network software provider, will acquire $100 million of stock in Whittman-Hart Inc., an information technology services company. The investment is the first part of Novell’s plan to expand its partnerships with consulting and systems integrator groups. In addition, the companies had agreed to jointly develop customized Novell Directory Services tools for midsize businesses.
Today in Telecom is a publication of ©Information Gatekeepers Inc. 1999. 214 Harvard Ave, Boston, MA 02134; Tel: 617-232-3111; Fax: 617-734-8562
Headlines - September 30, 1999
TOP STORIES
BRAZIL
CELLULAR
EUROPE
FIBER OPTICS
INDIA
INTERNET/E-COMMERCE
JAPAN
SOUTH AMERICA
TOP STORIES
Bell Atlantic to File Similar Long Distance Plan in Massachusetts in July 2000
Following its filing yesterday to the Federal Communications Commission to provide long-distance service in New York state, Bell Atlantic Corp. plans to file a similar application by July 2000 requesting regulatory approval to offer long distance service to Massachusetts customers. Bell Atlantic sees the state’s 4.8 million customers and $2 billion long-distance market as the largest prize after New York’s $8 billion market covering 8 million customers.
Excite At Home’s Shares Jump 13 Percent on America Online Deal
In response to news that its largest shareholder AT&T Corp. will cut a deal with America Online, shares of Excite At Home Corp. rose 13 percent. In regular trading, Excite At Home shares climbed 5 1/16 to 43 7/16 in trading of 35 million, making it the second most active US stock. Shareholders predict that Excite At Home will be acquired or involved in partnerships so Internet companies can gain access to its system, which delivers high-speed Internet access through cable TV lines. Last month At Home president George Bell said the company was in talks with America Online, Yahoo!, Microsoft Corp., Walt Disney, and Infoseek Corp. Separately, the company plans to sign on two or three more cable network providers for its Internet access service. Speaking at the Banc of America Securities conference, Ken Goldman, Excite At Home’s chief financial officer said that the company also expects that 23 million homes will be upgraded for Internet access by the end of 1999, compared with 17 million at the end of the second quarter. The company forecasts that it will have as many as 10 million subscribers in 2002, compared with about 620,000 current subscribers. However, Goldman would not elaborate on which cable providers the company is speaking to. Separately, Excite At Home will expand its European presence through an agreement it reached with Deutsche Bank Investor, to provide high-speed Internet access to 2.2 million cable subscribers throughout Germany.
Global Crossing Appoints Gary Winnick Chairman of the Board
Global Crossing’s boards of directors have named company founder Gary Winnick as chairman of the board. Gary Winnick has been serving as co-chairman with Lodwrick M. Cook, former chairman and chief executive of ARCO. Winnick founded the company to meet the exploding demand for mega-capacity, fully networked global telecommunications systems. In August 1998, he led the company’s successful initial public offering and headed its effort to raise capital through a combination of bank, high yield, and project financing. Along with his role as chairman of Global Crossing, Winnick serves as chairman and chief executive officer of Pacific Capital Group, a merchant banking firm he founded in 1985.
BRAZIL
Anatel Gives Telesp Green Light to Increase Cellular Phone Charges
Anatel, Brazil’s national telecommunications agency, has authorized Telesp Celular SA to increase its charges beginning on October 2. Holding company Telesp Participacoes SA, purchased by Telefonica SA in 1998, owns a 71.4 percent stake in Telesp Celular, which is the largest telephony operator in Sao Paulo State. This is the first price increase since December 1996, and although inflation calculated by the IGP-DI price index has been 22 percent over the period, the average price increase is far lower than this. It will increase its monthly charge 11.7 percent to R$42.30 frp, R$37.84. The cost local calls in Sao Paulo will rise 13.5 percent to R$0.42 a minute from R$0.37, calls to other cities in the state will rise 11.1 percent to R$0.90 per-minute from R$0.81 and inter-state calls will rise 8.7 percent to R$1.00 per-minute from R$0.92.
CELLULAR
Ericsson and Roger Cantal Win US$340 Million Contract to Build Canada’s First 3G Cellular Network
LM Ericsson has signed an agreement with Rogers Cantel Inc. have won a joint US$340 million agreement to build Canada’s first third generation cellular network. Ericsson’s TDMA Research and Development facility and Technical Assistance Center in Montreal will provide for the third generation system.
EUROPE
Investors React Unfavorably to Olivetti and Telecom Italia’s Restructuring Plan
In response to what they see as a raw deal, investors reacted poorly to Olivetti and Telecom Italia SpA’s restructuring plans, selling off their shares of Italy’s largest telecommunications group. A number of fund managers argued that the Italian government, which owns 3.95 percent of Telecom Italia and can veto major corporate changes, to stop the planned split off of Telecom Italia Mobile SpA, which is the company’s major asset. One of the companies that suffered the most by the restructuring was Tecnost SpA, which holds 52 percent of Telecom Itlaia, was the main victim as its shares sank 9 percent to 2.15 euros, slicing 1.2 billion euros from the market value. Telecom Italia fell to 8.42 euros, Olivetti fell 6.8 percent to 2.14 euros and the Telecom Italia Mobile dropped to 5.61 euros. However, chief executive Robert Colaninno said at a news conference that he is not concerned about the share decline, brushing it aside as a short-term problem.
British Telecom Opens Office in Hungary
As it continues to expand its presence in central Europe, British Telecom has decided to open a new office based in Budapest, Hungary. The office will enable BT to develop its presence in a market whose telecommunications sector is preparing for full liberalization by the year 2001. British Telecom currently operates in Hungary through its distributor Global TeleSystems Group,
France Telecom to Open Local Network to Rivals in 2000
The unbundling of the local loop has permeated over into Europe’s telecommunications market as the French Government proposes a requirement for France Telecom to open up its local telephone network to competition in 2000, allowing private operators to install ADSL equipment. France Telecom is currently negotiating with prospective operators and the authorities on the plan, which is expected to take effect in the year 2000.
Spain’s Government Proposes Measures to Increase Competition in Telecommunications Market
Spain is preparing a set of new measure aimed at further liberating the telecommunications market as a direct anti-inflammatory move. Three of the proposed measures include allowing mobile phone users to switch carrier while maintaining the same phone number, accelerating plans to award six new wireless telecommunications licensees and legislation to allow clients of competing fixed-line carriers direct dial access, eliminating the need to dial special prefixes before long-distance calls. A previous proposal to lower Telefonica SA’s local calling tariffs has seen criticism and is unlikely to be passed in the short term.
FIBER OPTICS
VersaTel Lights First Netherlands 10 Gpbs SDH Fiber Ring in Randstad
VersaTel had completed its 10 Gbps SDH fiber optic Randstad Ring, which will span approximately 440 km and connect Amsterdam, Utrecht, Den Bosch, Breda, Rotterdam, Den Haag and Haarlem. The Versatel announcement claimed that the Randstad Ring was the first STM-64 Ring operational in The Netherlands and one of the first STM-64 Rings operational in Europe, and would now carry traffic at over four times the speed of current alternative fibre optic networks available in The Netherlands.
GTS says Berlin city network live, Paris almost ready, high bandwidth into city centres
Global TeleSystems Group announced that its City Enterprise Network (CEN) in Berlin was now operational and carrying billed customer traffic, and that its CEN in Paris had completed operational testing and would begin commercial operations once final regulatory approvals, expected shortly, were received. It had enhanced its CEN strategy by accelerating rollout plans from 12 to 14 cities in Western and Central Europe by year-end 2001 and was also now increasing both the capacity and interconnectivity of each core city ring. In Phase 1 of the CEN build-out, CEN rings in Western Europe would connect customers at STM-16 with each ring connecting to the major points on the GTS backbone network, including IP nodes, SDH and DWDM interconnection points. The primary rings will pass through the PTT local exchanges for access to unbundled local loops (ULLs) and other local facilities such as telehouses, where significant traffic was aggregated. GTS said it also planned to introduce wavelength services during Phase 1 in connection with new city builds, and in Phase 2 additional fibre sub-rings would be added to the core, to extend geographic reach.
RSL.COM to Build UK-Based 3 Ring SDH Network by April 2000
RSL.COM announced that its UK subsidiary, which it claimed was the second largest independent mobile services provider and fourth largest international carrier in the UK, and which already operates an international switch centre in London, would by April 2000 have built a US$26 million initially STM-16 network. The three ring SDH network, based on rights of way over the UK's canal system, would also add switches in Birmingham (February 2000) and Manchester together with 14 regional interconnect points expected to be installed in London, Leeds, Sheffield, Nottingham, Milton Keynes, Basingstoke, Bristol and Stoke on Trent. These would all be monitored from the London 24 x 7 NOC and connected to RSL.COM's 13 European nations network.
INDIA
Insat-3B Ready to Meet Demand for Ku-Band
The Insat system is ready to meet the demands of telecom service providers for Ku-band services and foreign satellite will not be required, expect in the event of Insat-3B's launch being delayed. The new telecom policy had given a green signal for the use of foreign satellites, provided there were requirements which could not be met by the Insat system. However, according to a DoT analysis based on requirements projected by the department and the private sector very small aperture terminal (Vsat) operators, it has been concluded that demands for foreign satellite segment in Ku-band will not arise until 2001-2. The DoT has in fact suggested that Ku-band transponder space on Insat-3B, scheduled for launch in November, could be allocated against reservation charges.
Department of Telecommunications to Seek Review of CPP Regime
The Department of Telecom (DoT) is set to ask for a review of the Calling Party Pays (CPP) regime announced by the Telecom Regulatory Authority of India. DoT will push for a reduction of the Mobile Termination Charge (MTC) accounting rate from INR 1.20 to INR 1 per pulse. The Department has estimated that the CPP rates finalized by TRAI would result in an annual loss of INR 2 billion since, at certain tariff levels, payout on count of MTC would reduce revenues from such calls below their cost. If the Department fails to persuade the TRAI to review the CPP proposals, it is likely that short of choosing to move the courts, DoT may be left with no alternative but to increase user tariffs by removing the lowest slabs of INR 0.60- 0.80 per pulse, so that losses are curtailed. According to TRAI's rates, fixed to mobile calls will be billed a double pulse on answer, with a pulse every minute. The revenue share between the fixed and mobile companies will be in the ratio of 1/3:2/3. The accounting rate per pulse for the calculating MTC paid out to the cellular operator is uniformly calculated at INR 1.20, independent of the actual tariff per pulse.
65 cities to get DoT's IN Services from Next month
THE DEPARTMENT of telecommunications (DoT) is set to commercially launch the long-awaited intelligent network (IN) services in 65 cities in the country next month. Currently, IN services are being offered in Delhi and Mumbai by Mahanagar Telephone Nigam Limited (MTNL) and in Indore by DoT on a limited scale. The technology is developed indigenously by the country's premier telecom research institute, the Center for Development of Telematics (C-DOT).
vSplash in Talks to Secure Further Financing
AT the recently held India Internet World, Vsplash.com Ltd., which made a splash, is in talks with leading venture capital firms in the US for funding. The company has said it is seeking a deal, which will not offer it funding, but also offer strategic partnerships. It is seeking strategic tie-ups with Internet service providers (ISPs) to extract maximum mileage from the Internet boom. Launched in February this year, vSplash.com offers subscribers a ready-made environment to create and design their own web sites. The service is offered free for the first 10 days after which subscribers have to pay anywhere between INR 2,000 and INR 3,500 per annum, depending on the kind of web site that is being created.
SPICE Telecom Plans to Make Invest in New Backbone Service
Spice Telecom plans to invest INR 1billion during the year 2000 towards the investment of setting up a backbone service. Around 40 percent of the investment will be funded through internal accruals while the remaining 60 percent will come through foreign loans, said Fergus Wilmer, CEO, Spice Telecom. With the exit of Motorola, which held a 10 percent stake in Spice, Distacom's share in the company has gone up to 49 percent. It is understood that Motorola has divested the stake at par value or "at marginal premium". The majority (51 percent) shareholder of Spice is Modi Wellvest. The total equity of the company stands at INR 4.50 billion, up from INR 4.146 billion after the transfer of equity.
TRAI to Firm up Views on Domestic long-distance Telephony
The Telecom Regulatory Authority of India (TRAI) will formulate its views on the modalities of opening up domestic long distance (DLD) telephony to the private sector within six to eight weeks. Speaking to reporters here after a session organized by the TRAI on the subject, TRAI Chairman SS Sodhi said the authority is working towards the January 1 deadline so that the new Government could act on its recommendations. The TRAI held a series of sessions across various cities to discuss a consultation paper prepared on the basis of a study conducted by the Tata Consultancy Services (TCS).
Chandra Secures Rs 100cr in Financing from UTI, Dena Bank for Agrani
Unit Trust of India and Dena Bank are extending loans worth INR 100 billion to Subhash Chandra's satellite service project, ASC Enterprises Ltd. Sources said UTI will extend INR 500 million by way of subscription to secured redeemable, non-convertible debentures. In addition, the company has got another INR 500 million term loan from Dena Bank. With these approvals amounting to INR 1billion, awarded earlier this week, ASC has tied up funds totaling INR 11billion out of the required INR 12.50 billion for the Agrani satellite communication service project. ASC was in talks with institutions like SBI, GIC, LIC and IIBI for funding the balance INR 1.50 billion. "In-principle sanctions for the remaining part of INR 1.50 billion will follow soon and we are quite confident of achieving financial closure by the year-end," said a company official. Others who have pledged funds to ASC include IFCI, IDBI and ICICI of INR 3 billion each, while Bank of India (BoI) and Industrial Investment Bank of India (IIBI) have already pledged INR 500 million each to the project.
INTERNET/E-COMMERCE
Qwest Communications Partners with Hewlett Packard to Launch Data Storage and Internet Services
In its effort to take advantage of demand from companies planning to move administration, billing and other functions on line, Qwest Communications, has joined forces with Hewlett Packard to offer new data storage and Internet services. The company is currently increasing the number of network data service centers to 14 and will outfit them with Hewlett Packard’s storage computers. It will build new centers in Atlanta, Chicago, Dallas, Detroit, Philadelphia, Tampa, Florida, and Sterling, Va. Qwest expects the agreement to add $200 million in revenue during its first year of operations.
JAPAN
Yahoo Introduces Auction Web Sites in Japan and Singapore
Yahoo Inc. has introduced auction web sites in Japan and Singapore, which will feature local auctions content in each country as well as access to other English language auctions from around the world, including the US.
Kyocera and DDI Corp. to Make Joint 5 Billion Yen Investment in Iridium
Kyocera Corp. and its affiliate DDI Corp. will jointly invest 5 billion yen in the restructuring of satellite telephone service Iridium LLC. Iridium, which provides mobile phone services worldwide through a network of 66 satellites, has been undergoing restructuring since August, when it filed for court protection from creditors under US bankruptcy law. The sources did not disclose the details of the investment plan of Kyocera and DDI.
SOUTH AMERICA
Argentina’s CEI Citicorp Denies Allegations to Sell Cointel
CEI Citicorp Holdings SA said that there are no negotiations currently underway, nor plans to sell its stake in Cia Internacional de Telecommunicaciones SA. Spain’s Telefonica is also a shareholder in Cointel, that controls Telefonica de Argentina SA.
"Today in Telecom" ©Information Gatekeepers Inc. 1999•214 Harvard Ave•Boston, MA 02134•Tel: 617-232-3111•Fax: 617-734-8562
Headlines - September 29, 1999
TOP STORIES
CHINA
CONFERENCE NOTES (DSL CON 1999-Reston, VA)
CONFERENCE NOTES (NFOEC 1999-Chicago)
EUROPE
FIBER OPTICS
SOUTH AMERICA
TOP STORIES
Bell Atlantic Files Long Distance Application with the FCC
Bell Atlantic has applied to the Federal Communications Commission to provide long-distance service to more than eight million homes and businesses in New York. The filing follows a two and a half-year, comprehensive effort to open Bell Atlantic’s local network to competitors and meet the long distance entry requirements of the Telecommunications Act of 1996. If the application is approved, Bell Atlantic will become the first Regional Bell Operating Company to offer long distance inside its own service area. The FCC has 90 days to review Bell Atlantic’s long-distance filing, and the New York PSC and the Department of Justice will make their recommendations to the FCC before it makes a final decision. The filing provides extensive detail on the steps Bell Atlantic has taken to meet a 14-point checklist specified in the telecom act, which is a prerequisite for a Bell company to receive federal permission to offer long-distance service within its local service area.
Alcatel to Acquire Genysys Telecom for US$1.5 Billion
As it looks to update its technology and shift its customer presence towards the United States telecommunications market Alcatel has reached an agreement to acquire Genysys Telecommunications Laboratories for US$1.5 billion. Under the terms of the deal, Genesys shareholders will 1.667 Alcatel depositary shares for each Genesys share they hold, and has placed a US$55 maximum per share and a US$45 minimum on the value of the transaction. Genesys, which was founded in 1990, is a supplier of software that provide advanced management of voice, Web, e-mail and video interactions in call centers and automates call center administration. Upon completion of the acquisition, Alcatel plans to market Genesys’s products to businesses and to telephone carriers and Internet service provider, which would use them to offer call-center like services to corporate clients.
Tyco International to Acquire Siemens Electromechanical Components Division for US$1.1 Billion
Tyco International Ltd. has signed a definitive agreement to acquire Siemens Electromechanical Components from Siemens AG for US$1.1 billion in cash. Siemens EC, with sales of approximately Us$900 million, is a manufacturer of relays and components to the communications, automotive, consumer and general industry sectors, offering a broad spectrum of products. This deal follows two other Tyco acquisitions made earlier this year of AMP Inc. and Raychem Corp. for a combined US$14.2 billion in cash in stock. With the acquisition, electronics will become the largest of the company’s four main businesses. The electronic division would account for 42 percent of the $26 billion overall revenue the company is projected to record.
CHINA
China to Open Internet Sector to Foreign Investors "Sooner or Later"
Speaking at the Fortune Global Forum in Shanghai, China’s Industry Minister Wu Jichuan said that China will open its Internet sector to foreign investment "sooner or later" but the proper regulation has to be in place. Jichuan clarified earlier remarks in which he reaffirmed a ban on foreign investment in Internet service and content providers. "It is not a blanket ban on all foreign investments in the Internet sector but only in Internet services provision, Internet content provision or other value added activities," explained Jichuan. We will open up these areas to foreign investment sooner or later; the question is we have to have the proper rules in place."
CONFERENCE NOTES (DSL CON 1999-Reston, VA)
mPhase Technologies Inc. Demonstrates Traverser System at DSLcon ’99
mPhase Technologies Inc. demonstrates its 192 channel multi-user broadband Traverser system technology, at DSLcon ’99 in Reston, VA today at booth #514/515. The Traverser system provides users with high-speed Internet access digital television, and telephone capability, all of which can be performed simultaneously over existing telephone lines.
Pulsecom and FlowPoint Demonstrate DSL Equipment Interoperability
To further enhance the wide deployment of DSL services, Pulsecom announced that it has certified interoperability of its WavePacer RAM-1100 product with the SSR255 router from FlowPoint, a subsidiary of Cabletron Systems. The WavePacer RAM-1000 is a remote access multiplexer, which enables carriers to extend ADSL and DSL-Lite services to remote subscribers served by digital loop carrier systems.
CONFERENCE NOTES (NFOEC 1999-Chicago)
LaserComm Reports Successful Tests of New Hi Mode Dispersion Management Device
LaserComm Inc. reported successful results from a series of laboratory test of its new Hi-Mode dispersion management device at the National Fiber Optics Engineering Conference this week in Chicago, IL. The new Hi-Mode DMD was specifically designed to overcome problems caused by chromatic dispersion and dispersion slop in order to facilitate the migration from 2.5 Gbps to 10 Gbps in DWDM systems, and to enable expanded transmission rates of 40 Gbps and beyond. LaserComm has incorporated its Spatial Mode Transformation technology with a proprietary high order mode fiber, to produce a passive optical device capable of continuous broadband management of chromatic dispersion and dispersion slope, thereby opening the gate for a significant increase in bandwidth.
Telecom Vendors Demonstrate Integrated Management Solution for Multi Vendor, Multi-Technology Networks
Six companies working together to improve service providers’ network management capabilities presented a live demonstration of their TeleManagement forum standard interface solution. The companies, which include Fujitsu Network Communications, Lucent Technologies, Siemens AG, Telcordia Technologies and Tellabs, highlights management of both SONET and SDH equipment. The demonstration focuses on the establishment of a connection across the various suppliers’ element management systems and network management systems for functionalities such as network provisioning and integrated fault management, and the identification of alarms triggered by simulated network problems, all from a single management workstation tied to the multi-vendor network. Various service providers are planning field trials, followed by deployment, in the first quarter of 2000.
EUROPE
Olivetti SpA to Spin off Cellular Phone Operations from Telecom Italia
In the effort to revamp its telecommunications businesses, Olivetti SpA has decided to spin off its cellular operations from Telecom Italia SpA, Italy’s former phone monopoly that the company acquired in May. This move has been taken over a former program for merging Telecom Italia into Olivetti’s acquisition vehicle, Tecnost SpA, and using the phone company’s operating cash flow for debt payments. As a compensation for losing Telecom Italia Mobile SpA to Tecnost, minority investors in Telecom Italia will receive between 1.5 and 1.65 shares in Tecnost in addition to each Telecom Italia share they already own. However, directors representing mutual funds and the government on Telecom Italia’s board abstained in the vote on the proposal, prompting the company to seek an independent adviser for a fairness opinion on the swap. The Italian State owns 3.95 percent of the company and can block major decision affecting the company.
European Commission Approves Deutsche Telekom’s US$11 Billion Acquisition of One 2 One
European regulators granted their approval of Deutsche Telekom’s US$11 billion acquisition of British mobile phone operator One-2-One. The commission ruled that the deal would not lead to overlap on the market since Telekom was not previously active in Britain. Further, the commission’s investigation illustrated that the takeover won’t leave a creation of an unfairly dominant position in Germany or on mobile calls between Germany and Britain. Separately, Deutsche Telekom bought a Pan-European network from a new United Kingdom telecommunications operator, Iaxis for more than US$50 million.
Freeserve’s Stock Drops 8 Percent in Regular London Trading on Widening Losses
As a result of widening losses during the quarter, shares in Freeserve dropped by 8 percent to 137.75 pence in London yesterday. Analysts said the reaction says more about investor nervousness than the company’s actual performance. In line with its forecasts, the company said its operating losses before exceptional items for the weeks ended August 21 grew to L5.2 million (US$8.5 million), from L810,000 for the week period ended May. Revenue more than doubled to L3.38 million, from L1.65 the previous quarter.
Siemens to Install 18 City VoIP Network in Italy for Aexis Telecom
Siemens Information and Communication Networks of Boca Raton Florida announced a multi-million dollar agreement between Dallas-based Aexis Telecom and the Information and Communication Networks Group of Siemens AG to deliver and install EWSD InterNode IP Switching and IP Routing Systems, as well as an end-to-end 7X24 NMS. This is for an 18-city, VoIP network routing system, including the IP backbone, starting with installations in Rome, Milan, Turin and Naples in 1999 and continuing with deployments in an additional 14 cities during 2000.
OPTA to Force KPN to Lower Domestic Phone rates by 5.3 Percent during Next 3 Years
Dutch telecommunications regulator OPTA has set forth a rule whereby KPN will have to lower its domestic rates by 5.3 percent for the next three years as part of the continued liberalization of the telephone market. The cuts will be averaged over a basket of tariffs including subscription, local, interlocal, and fixed-to-mobile rates, giving KPN the option to cut different rates by different amounts. The first round of price cuts will take effect on July 1, and the whole program will be completed by July 2002.
Ericsson Wins US$80 Million Wireless GSM Mobile form Polska Telefonica Cyfrowa
Ericsson has signed a $80 million contract with operator Polska Telefonica Cyfrowa for expansion of their GSM network in Poland. Under the terms of the agreement, Ericsson will deliver base stations, base station controllers, MINI-LINK microwave transport solutions and services in addition to mobile switching centers and home location registers. With this expansion, Ericsson will support the rapid growth demands will support the rapid growth demands on the network and PTC’s services, brand named EraGSM.
FIBER OPTICS
IXC Communications to Deploy Nortel Networks’ OPTera Suite for Network Expansion
IXC Communications has selected Nortel Networks’ OPTera open optical solutions for a major network expansion, linking Boston, Baltimore, Denver and Miami linking with the existing IXC network spanning New York, Chicago, Dallas and Los Angeles. IXC plans to complete its 18,000-mile national network by the end of 2000.
SOUTH AMERICA
Impsat Wins US$50.67 Million Contract to Build Land Links
Impsat SA has signed a US$50.67 million contract with South American Crossing Ltd. to build two turnkey land link telecommunications projects and for use of a broadband duct. The first land link will run from Las Toninas where SAC’s submarine cable enters mainland Argentina to Buenos Aires, and the second link is from Mendoza to the border with Chile. An indefeasible right of use will also be granted for the broadband duct that Impsat will build from Buenos Aires to Medoza, and includes maintenance for the network.
©Information Gatekeepers Inc. 1999. 214 Harvard Ave, Boston, MA 02134; Tel: 617-232-3111; Fax: 617-734-8562
Headlines - September 28, 1999
TOP STORIES
ADSL
BRAZIL
CHINA
CONFERENCE NOTES (NFOEC 1999)
EUROPE
FIBER OPTICS
INDIA
SOUTH AMERICA
TOP STORIES
AT&T to Acquire Two Million Cable Set-Top Boxes from General Instrument and Motorola
As it gears up to begin the upgrade of its newly acquired cable television systems for high-speed Internet access and local telephone service, AT&T will soon purchase about two million additional cable TV set-top boxes from General Instrument Corp. and one million cable modems from General Instrument’s merger partner, Motorola for $1 billion. The purchases would expand AT&T’s existing relationship with General Instrument, and would mark its first major cable modem purchase from Motorola, which recently reached an agreement to acquire General Instrument for $11 billion in stock. More importantly, AT&T purchase signifies the company’s support of the General Instrument and Motorola merger. As part of the deal, General Instrument will supply transmission gear, including amplifiers and fiber optic components.
IBM and Dell Computer Expand Alliance
International Business Machines have decided to expand their existing alliance in which IBM will provide computer installation and repair services to buyers of Dell Computer Corp. equipment. Under the terms of the agreement, IBM would provide $6 billion or more in services to Dell customers during the next seven years. This new agreement is one the company’s latest efforts IBM has made to sell services and computer parts to competitors. During the past seven months, IBM reached a similar service deal with Cisco Systems Inc. and signed OEM agreements to supply products to competitors, including EMC Corp. and Dell.
ADSL
Copper Mountain to Launch New G.lite Line Card at DSLcon Fall ’99
Copper Mountain Network will showcase their new G.lite line card and other new products at this year’s DSLcon trade show and conference, being held at the Hyatt Regency Reston, Va., September 27-29, 1999. In addition to its new G.lite line card, the company will demonstrate its voice over DSL solutions, at booth 200 throughout the show. In addition, Copper Mountain recently announced two new customers, MGC Communications, a full-service, facilities-based provider of competitive local and long-distance services, and Wiznet, a Canadian-based service provider.
BRAZIL
Lucent Wins US$470 Million Wireless Supply Contract from Brazil’s Vesper
Lucent Technologies has signed US$470 million, five-year contract with Brazil’s Vesper to supply wireless local loop technology. Under the terms of the contract, Lucent will supply equipment and enable deployment of Vesper’s network in the Sao Paulo State concession. This is Lucent’s largest wireless local loop contract to date. A consortium led by Bell Canada International control vesper, previously known as Megatel
CHINA
Yahoo Launches Joint Venture Web Site in China
Yahoo Inc. has launches the Beijing Founder Electronics joint venture with Founder Ltd., to develop an Internet site for China, two weeks after a senior Chinese government official ruled out foreign investment in Internet companies. The site will also replicate the services Yahoo offers on other local portal sites, including news, finance and weather information relevant to the region in addition to e-mail, instant messaging and a personalized web service. This new venture follows comments by Minister of Information Industry Wu Jichuan two week ago that investment by overseas companies in China’s Internet sector was prohibited. Founder will play a strategic role in guiding and supporting Yahoo China in China, and will help integrate technology developed at Beijing University.
CONFERENCE NOTES (NFOEC 1999)
Vitesse Introduces Two Industry's Firsts: 64x65 OC-48 Crosspoint Switch and Quad OC-48 Retimer
Vitesse Semiconductor Corporation is demonstrating today at the National Fiber Optics Engineering Conference, its new family of OC-48 crosspoint switches the VSC834, VSC835, and the VSC836. These crosspoint switches are ideal for broadband optical switch architectures, such as Dense Wavelength Division Multiplexing (DWDM) switch core systems. The VSC834 a 17x17 switch, the VSC835 a 34x34 switch, and the VSC836 a 64x65 switch, have the capability to operate at 2.7 Gbps for forward error correction (FEC) systems. This chipset enables manufacturers to easily build high performance switching systems for SONET, The VSC834, VSC835 and VSC836 crosspoints implement a completely non-blocking switch fabric, with a total throughput of up to 160Gbps with a single device. Intrinsic in the VSC834, VSC835 and VSC836 is the ability for each data output to be programmed to any one of the crosspoints inputs. In addition, each data input can be routed to multiple outputs. The non-blocking switch core allows for any input to reach an output without blocking any other input from reaching another unused output. These non-blocking fabrics reduce system complexity. All signal paths of this family of crosspoints are fully differential, maintaining a high degree of signal integrity through the chip.
Avanex Exceeds Forecasts for Photonic Components during the Quarter
Walter Alessandrini president and CEO of Avanex said at NFOEC that the company's recent sales experience certainly supported some organisations' market forecasts that the optical market would double by 2001. Alessandrini said his company, which was already producing evaluation units and products, including for production orders and supply contracts for a customer list which included MCIWorldCom, Lucent, Hitachi, Fujitsu, Nortel, Alcatel, Osicom Technologies, E-Tek Dynamics, Cerent, Siemens and Pirelli, had already shipped more products in the current quarter than Avanex had forecast for the entire year. The company forecasts anticipate that this rate of expansion would be sustained.
Monterey and Pirelli Demonstrate Interoperability of Wavelength Router and Wavemux DWDM System
A demonstration of how telecommunications carriers can now create a wavelength- granular optical core network able to meet the skyrocketing bandwidth demand generated by their Internet, ATM and other services will be held by Monterey Networks and Pirelli Optical Systems at the National Fiber Optic Engineers Conference (NFOEC) Sept. 27-29 in Chicago. The demo, showing the interoperability of the Monterey 20000 Series Wavelength Router and the Pirelli Optical Systems WaveMux Hyper-Dense Wavelength Division Multiplexer, will be the first illustration of wavelength routing technology to interconnect DWDM devices and provide them with connectivity to IP routers, ATM switches and other service nodes acting as service nodes in the demo will be Cisco GSR 12008 routers.
EUROPE
Deutsche Telekom Expects to Raise More than 20 Billion DM from Cable Television Operations Sale
Deutsche Telekom AG expects that the sales of its cable television operations will significantly raise more than 20 billion DM. "The sum of 20 billion DM does not even vaguely match our expectations. What we consider to be realistic, what we would accept, lies significantly above the figure named," said Deutsche Telekom board member Gerd Tenzer Since its launched its plan to sell off its cable network, the company has been in talks with 17 possible investors since the end of last week, including several consortia of domestic and foreign companies, and financial institutions. Negotiations with the bidders are expected to end in the coming week and will be followed by a 10-day evaluation period when investors will also have the opportunity to raise their bids.
Ericsson Expands GSM Mobile System in Poland
Ericsson has signed a contract with operator Polska Telefonica Cyfrowa (PTC) for expansion of their GSM network in Poland. The contract is valued at more than US$80 million (SEK 660 million). Ericsson will deliver base stations, base station controllers, MINI-LINK microwave transport solutions and services as well as mobile switching centers and home location registers (HLR). When fully implemented during first quarter of 2000, total network capacity will be increased to more than 2 million GSM users.
AOL UK and Fresserve Reduce Calling Rates
The battle for Internet companies to gain larger market share heats up as both of the UK’s major service providers, AOL UK and Freeserve have reduced their calling rates. Phone charges for AOL UK subscribers will be reduced to one penny a minute, from as much as four pence, for access at any time. AOL UK, a unit of AOL Europe, a joint venture between America Online and Bertelsmann of Germany, said the reduction is possible after AOL UK negotiated the rate with several telecommunications companies, which it declined to name. Under the Freeserve plan, clients who spend L3 to L9.99 in local telephone charges a month will qualify for three free hours of Internet access, and those who spend L10 or more will get 10 hours.
Telefonica and Indra Launch New Information Service
Telefonica SA has launched a new information service to facilitate the general public’s access to various government offices. The service has been developed in conjunction with Indra Sistemas SA, a contract that the two companies won from the Public Works ministry 15 months ago.
Orange PLC to Launch Bid for E-Plus
Orange PLC may launch a bid for E-Plus Mobilfunk GmbH, the joint venture of RWE AG, Veba AG, BellSouth Corp. and Vodafone Group PLC, which is valued at between 10-12 billion stg. The company is determined to enter the German market, potentially Europe’s largest, and has the power to acquire E-Plus, and if Orange decides against a bid, it could establish itself in Germany as a "virtual network," burying capacity from other carriers.
FIBER OPTICS
Nortel Networks Unveils Breakthrough Optical Internet Capabilities to Bridge Optical and Packet Networks
Nortel Networks today introduced the OPTera Packet Solution, which will unify optical and packet networks into one powerful infrastructure capable of carrying all types of traffic. It will provide highly reliable optical switching and routing capabilities that replace 'Old World' routers responsible for 57 percent of all Internet failures today, and deliver massive bandwidth where and when it is needed. The OPTera Packet Solution will integrate and evolve all of these elements to deliver advanced optical switching and routing capabilities that will handle speeds up to 19 Tpbs of various kinds of Internet traffic (IP, ATM, SONET/SDH) and be scalable to hundreds of Terabits per second. It will be a major part of Nortel Networks' OPTera Portfolio that also includes metropolitan and backbone optical networking solutions.
INDIA
Telecom Regulatory Authority of India to Release Final Recommendations on Local long-distance Service
The Telecom Regulatory Authority of India (TRAI) will in the next six weeks make its final recommendations on the opening up of domestic long-distance service (DLD). The New Telecom Policy 1999 envisages subscribers being provided with the choice to access all domestic long-distance operators and make long-distance calls through any operator. It also provides for the resale of domestic long distance telephony. The national telecom policy of 1999, among its other policy initiatives permitted the opening of DLD to competition effective January 2000. In this context, the Department of Telecommunications had in May made a references to issues such as scope of service, number of operators, license fee structure and selection criteria of services providers.
Celltel Companies Resent Move to Makes Calling Parties Pay
The new telecom tariffs announced by the Telecom Regulatory Authority of India (TRAI), along with the introduction of a calling party pays (CPP) regime, is likely to lead to a reduction in revenue, according to cellular operators. They say that although the subscriber base will go up substantially, there will be a negative impact on revenues, at least initially. Alok Tandon, a director on the board of Hexacom, which operates mobile service in rajasthan, expects a drop of 10-15 percent. Nalin Tikoo, CEO essar Cellphone, one of Delhi's two cellular operators- estimates a more drastic revenue loss of 35 percent.
Sterling Financial in Talks with US Firms for Web-Trading
Sterling Financial Financial Services Ltd., an NSE brokerage firm, is in talks with US-based trading companies Charles Schwabb and E*Trade for offering internet-based investment management services aimed at the Indian market and non-resident Indians. Sterling will provide the services through its website--www.indistock.com, in a month's time, said company chairman & managing director Dhiren d mehta. As part of the company's time, said company plan to become a full-fledged Internet-based investment firm, Sterling Financial Services Ltd. Adding that indistock.com had also been registered in line with future plans.
BPL Telecom to Take Decision on DLD Foray after TRAI Recommendations
BPL Telecom, Part of the BPL group, is looking at entering the domestic long-distance service (DLD) arena. The company is awaiting recommendations from the Telecom Regulatory Authority of India (TRAI) to take a final decision. The company on Monday made a presentation to the telecom watchdog on the strategies of the group on this front. BPL has sought the strategies of the long-distance communication sector to two private operators apart form the Department of Telecommunications (DoT). BPL officials said the license period for the proposed domestic long-distance service operator (DLDO) should not be less than 20 years. Going by the huge investments for entering the segment and the related returns from the business, the related returns from the business, the entry should be restricted to a couple of players, according to the presentation.
MTNL Global Offering to Follow Book Building Route
The proposed GDR issue of Mahanagar Telephone Nigam Ltd. (MTNL) is likely to follow the common book route. A decision on the timing of the offering is likely to be made after looking at issues such as the Y2K problem and other overseas issues scheduled for1999 2000. At a meeting here yesterday, the scheduling of overseas of GAIL, India Oil Corporation and MTNL were discussed. The timing of the MTNL issue will also be affected by the bankers’ perception on the Y2K problem. There is some debate on whether there would be any appetite for investments in the run up to the millennium, given the threat to all computer systems for the Y2K bug.
MTNL's Cell Plans Immobilized by Telecom Regulatory Authority of India
Mahanagar Telephone Nigam Ltd.'s proposed expansion of its mobile phone service is unlikely to kick-start this month, as planned earlier, following hardening of Telecom Regulatory Authority of India's stand on the issue. The issue now threatens to escalate into a major row with TRAI chairman SS Sodhi stating that no decision would be taken on MTNL's proposal without proper open-house consultations on code division multiple access (CDMA) technology. This in effect means that MTNL will now have to wait till the regulator completes the "Open House" process, which starts with the issue of a consultation paper, followed by public consultations at a new locations before a final decision is taken. The TRAI charter, which gives it exclusive powers to fix tariffs, also makes it mandatory for the regulator to ensure decision-making in a transparent and fair manner.
SOUTH AMERICA
Brightpoint de Venezuela and Corporacion Digtel CA Sign Wireless Distribution Agreement
Brigthpoint Inc.’s subsidiary Brightpoint de Venezuela, CA and Corporacion Digitel CA have signed an agreement under which Brightpoint will provide outsourced logistics services related to wireless handsets and accessories for Digitel’s distribution channels. Under the terms of the agreement, Brightpoint will perform product acquisition, inventory management and technical services. Digitel is a telecommunications company offering basic, rural and mobile telephony using the European GSM standard for the Venezuelan central zone in the 900 MHz Band.
©Information Gatekeepers Inc. 1999. 214 Harvard Ave, Boston, MA 02134; Tel: 617-232-3111; Fax: 617-734-8562
Headlines - September 27, 1999
TOP STORIES
ADSL
CONFERENCE NOTES (NFOEC 1999)
EUROPE
INDIA
INTERNET/E-COMMERCE
SOUTH AMERICA
TOP STORIES
Veba’s Board Approves $14.6 Billion Merger with Rival Viag
The supervisory board of Veba of Germany has approved a $14.6 billion merger with the rival Viag AG. Upon completion of the merger, the combined company will become the largest electricity company in Europe and spur more consolidation in Germany. In addition, the combined company would create Europe’s number 3 chemicals company, behind rivals BASF and Bayer. Yesterday Viag’s board met to discuss the plan. The companies have the backing of their biggest shareholders, the state of Bavaria and of Germany’s top insurer, Allianz AG. It will have annual electricity sales of about 14 billion euros, ranking its in Europe behind only Electricite de France and Enel SpA of Italy.
ADSL
Interspeed to Raise $20.5 Million in Initial Public Offering
Interspeed, Inc., a new ADSL startup based in North Andover, Mass, has commenced trading of its common stock in its initial public offering (IPO). The Company will raise approximately $20.5 million of net proceeds in an initial sale of 2 million shares of common stock, priced at $12 per share. Interspeed, formerly a wholly owned subsidiary of Brooktrout, Inc. filed a registration statement with the Securities and Exchange Commission for the initial public offering on June 18, 1999. In addition to the 2 million primary shares offered by Interspeed, Brooktrout, Inc., its principal stockholder sold 1.5 million secondary shares. U.S. Bancorp Piper Jaffray, Inc. Warburg Dillon Read LLC, Tucker Anthony Clearly Gull, and DLJdirect managed the offering. Interspeed will trade under the symbol ISPD‰ on the Nasdaq Stock Market.
CONFERENCE NOTES (NFOEC 1999)
Qeyton Systems and Net Insight Demonstrate Interoperability during NFOEC
Today at NFOEC, Qeyton Systems, a new metropolitan DWDM startup based in Sweden, announced the successful application of their ultra-fast DWDM protection with the new generation of access transport equipment. Tests performed with fellow Swedish start-up, Net Insight, demonstrated the seamless integration of Qeyton's adaptive DWDM product family, the QS200, with the equally flexible Nimbra DTM access multiplexer. In particular, the tests confirm that Qeyton's unparalleled protection switching is able to secure less than one millisecond of service interruption within the DTM layer in the event of a fiber break. In the tests, Qeyton's QS200 DWDM nodes were used in a 50-km circumference ring to carry a 1.25 Gbps DTM channel between two Nimbra 101 DTM Access Devices. The DTM channel was protected in the optical layer with Qeyton's channel-by-channel fiber protection option. The working fiber path was then cut, and the switchover time determined from counting lost frames.
Pirelli and Cerent to Demonstrate Interoperability of Cerent’s 454 and Wavemux System
Pirelli Optical Systems North America and Cerent Corp. will demonstrate interoperability between the Cerent 454 and Pirelli’s hyper-dense WDM system during NFOEC. The demonstration will be held in Pirelli’s both 1001. Pirelli’s WaveMux platform is scalable to 128 channels, with each channel carrying OC-192, and is can interface readily with SONET, IP and ATM layers.
ADC Telecommunications Demonstrate Expanded OC-48 Capacity of Cellworx STN
ADC Telecommunications Inc. will demonstrate its new OC-48 capacity for the Cellworx Service Transport Node (STN) at the National Fiber Optic Engineers Conference (NFOEC). Three initial Cellworx customers, including the Iowa Communications Network and Midcontinent Communications, have purchased the OC-48 ring interface, with scheduled upgrades in early 2000. The Cellworx STN offers a new level of scalability and capacity to extend the bandwidth savings of ATM Virtual Path ring technology further into the core network. With the new upgraded Cellworx OC-48 capacity, a carrier can potentially support the same level of customer traffic as it would with TDM-based OC-192/STM-64 networks. Utilizing the bandwidth efficiency of ATM VP rings, the Cellworx STN collapses multiple high-speed services on a single network layer and manages these services through a simple integrated network manager.
EUROPE
UPC and France Telecom Express Interest in Rotterdam Cable Television Network
United Pan Europe Communications NV and France Telecom SA are among the companies interested in acquiring all or part of the Rotterdam cable television network from Dutch utility company Eneco. According to a source close to the situation, the rapid changes going on in the cable industry spurred the company to begin looking for a partner or consider selling the network. UPC and France Telecom unit Casema have both expressed interest in working with Eneco, while UPC hopes to make a full bid for the network. The cable network, with about 580,000 connections in the Rotterdam area, should sell for about 1.275 billion nfl.
Edison Acquires 1.5 Percent Stake of Olivetti SpA
Furthering its entrance into the telecommunications sector, Edison SpA’s boards of directors have voted to acquire a 1.5 percent stake in Olivetti SpA. Edison chief executive Enrico Bondi said that in the energy sector we are autonomous and want to remain alone, and the Monedison group has resources available to develop Edison.
European Commission Approves IBM’s Acquisition of Sequent
The European Commission has cleared the acquisition of Sequent Computer Systems Inc. by International Business Machines Corp. Although the deal will lead to overlaps in servers and IT services, the EU argued that given Sequent’s low market share in these areas, the commission said it considered the transaction will not raise competition concerns.
Telecom Italia Considers Spinning Off its Internet Operations
Telecom Italia SpA is considering spinning off its Internet activities with the aim of a separate quotation for the Internet activities as a separate company. Telecom Italia said previously that it would make an important announcement on Wednesday, September 29 regarding strategy and new products for the Internet.
Sonera Opens Internet Portal Service in the Netherlands
Sonera Group PLC has opened its first foreign-based Sonera Plaza Internet portal in the Netherlands. Sonera Plaza is a web-based concentration of links to a variety of services for which Sonera web architects provide a standard framework. The company plans to begin offering Internet connections in the Netherlands through the fixed telephone network. In 1995, Sonera began selling Internet and data transmission services via its Dutch subsidiary Sonera Nederland BV. Last July, Sonera expanded its Dutch operations with the acquisition of MuliWeb BV through which Sonera now offers Internet connections to households and small and medium-sized enterprises.
INDIA
Himachal Futuristic plans to exit Fascel
Himachal Futuristic Communications Ltd. (HFCL) has decided to sell its 10 percent stake in Fascel, the cellular operator in Gujarat circle. The company, which previously held a 43 per cent stake in Fascel, earlier sold a 30 percent stake to the Hindujas, and is now looking to exit the venture. Under the shareholders agreement, the other promoters - Hindujas (30 percent), Kotak Mahindra (11 percent), Shinwatra (33 percent) and Beze1q (16 percent) - will get the first right of refusal. There is a five-year lock-in period on divestment by existing shareholders, which ends in December 2000, and any sell-out would have to address this issue. The exit will mark HFCL's departure from major telecom services operation. Once it sells out of Fascel, the company's presence in the telecom service arena will be primarily be represented by paging operator Microwave Communications.
MTNL Faces Further Drop in Demand
Mahanagar Telephone Nigam Ltd. (MTNL) is facing a slowdown in demand for new connections for the second consecutive year. Average registrations for new connections have dropped to around 11,000 per month in Delhi for the first five months of 1999. In Mumbai, the demand is now between 10,000 and 15,0000 per month during the same period. A year ago, it was between 15,000 to 20,000 a month. The sluggish economy and rapid network growth - from 2.2 million connections to 3.6 million connections between 1995 and 1999 could have led to a decrease in demand.
Loral Wins Orders from Three ISPs for Global Connectivity
US satellite major Loral Orion has quietly entered the Indian market through a joint venture and bagged orders from at least three Internet service providers (ISPs) for global connectivity. Loral has entered into agreements with few ISPs for carrying their traffic through the satellite systems and the contracts will be announced after the Indian government gives security clearance for setting up gateways.
JT Mobiles to Expand Network
JT Mobiles plans to expand its network to 100 cities in Andhra Pradesh and Karnataka, in an attempt to increase subscriber base and market share. Initially, the company will expand to 60 cities, and will focus on value-added services. The total cost of the rollout is expected to touch INR$2.2 billion. The company hopes to tap 200,000 subscribers in the next one year with the network roll out.
India to Launch Geo-Synchronous Satellite Launch Vehicle in the First Quarter of 2000
India's Geo-synchronous Satellite Launch Vehicle (GSLV) will be launched in the first quarter of 2000 and preparations for the launch of indigenously developed vehicle is in the final stages. GSLV would be able to carry a payload of 5 tonne and place the satellite at an altitude of 3600 km. The INR 13-billion GSLV project is expected to help India achieve self-sufficiency in launch vehicles.
BSES Telecom Plans Internet Gateway
BSES Telecom is planning to start an Internet gateway, and has reportedly approached the Department of Telecommunications (DoT) for clearance. Prior to this, the company is expected to start its Internet services in the first week of October. For the Internet gateway, the company is exploring two possibilities, to either go in for a joint venture with other satellite service providers, or purchase and lease out transponder space to link up its gateway network. The gateway is estimated to cost the BSES Telecom around INR 800 million to 1 billion. The company is holding talks with various Internet companies.
INTERNET/E-COMMERCE
Cirrus Logic to Support Microsoft’s Foray into the Digital Music Scene
In the effort to gain a strong stance in the digital music market, Microsoft will announce that the newest line of Internet audio chips from Cirrus Logic will support Microsoft’s Windows Media audio format. As a result, portable digital music players and other devices built with the Cirrus chip would be able to play music encoded with Windows Media technology. Also, the right to use the Microsoft technology is included in the price of the chip. This agreement, whose terms were not disclosed, is a move to encourage the development of devices that support Windows Media, giving musicians and record companies more incentive to release music in the Microsoft format.
SOUTH AMERICA
Telefonica Launches Movistar Cellular Phone Service in Puerto Rico
Telefonica SA has launched its Movistar cellular phone service in Puerto Rico, with an initial investment of over $200 million. The new service will be available throughout the island by the end of 1999, generating over 200 new jobs, and the tariffs offered by its Telefonica Internacional’s TLD de Puerto Rico unit are below the current market tariffs. Movistar will be available to clients through the PCS systems, which will provide access to the Internet and television and agencies’s news. Telefonica said Movistar’s potential market in Puerto Rico is consists of about 3.8 million subscribers.
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