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February 7, 2002
TOP STORY
--Taiwan's auction for 3G wireless licenses brings the government $1.4 billion
--China Unicom Group enlists 120,000 new CDMA customers since early January
--Verizon and SBC drop bid plans for WorldCom
--AT&T introduces flat-rate long-distance calling plan
--Global Crossing seeks better offer
--BellSouth to buy $350 million in services from Qwest Communications
--Siemens wins $305.4 million UMTS deal from Deutsche Telekom
--Belgium's three mobile phone operators seek gov't permission to delay roll-out of next generation mobile phone services
--Sonera to issue 3G warning
--Cisco Systems reports higher than expected profits and sales in fiscal second quarter
--Comcast cashflow drops 3% in fourth quarter, total revenues increase 17% to $2.82 billion
--Japan's Nippon Telegraph and Telephone defies government call for access fee cuts
--Microsoft launches mobile versions of its MSN Internet portal in Europe
--GlobeNet's Brazilian undersea cable ring to be ready for service in March or April
--Iridium Satellite to put five new satellites into space
--Critical Path and two former executives settle SEC accounting fraud case
ASIA PACIFIC
--China Unicom Group enlists 120,000 new CDMA customers since early January
--Shanghai battles with Suzhou for Taiwan Semiconductor Manufacturing's China base
--Sri Lanka Telecom seeks to renegotiate management contract with Japan's NTT
--Taiwan's auction for 3G wireless licenses brings the government $1.4 billion
BUSINESS
--Verizon and SBC drop bid plans for WorldCom
--AT&T introduces flat-rate long-distance calling plan
--Storm Telecommunications seeks partners to resell its Ethernet-on-demand service to corporate customers
--Global Crossing seeks better offer
--SBA Communications to close offices and build fewer towers this year, to cut employees
--Talks over possible partnership between Germany's Infineon Technologies and South Korea's Hynix Semiconductor on hold
--Goldman Sachs Group to share role as Tyco advisor
--Level 3 says its 3Voice Termination product will remain
DEALS
--BellSouth to buy $350 million in services from Qwest Communications
--Siemens wins $305.4 million UMTS deal from Deutsche Telekom
--CMG wins global 3G messaging software contract with Hutchison 3G
EUROPE
--Italy's Wind plans to float at least 20% stake in IPO
--Belgium's three mobile phone operators seek gov't permission to delay roll-out of next generation mobile phone services
--Estonian Eesti Telekom expects mobile penetration rate to increase between 58% and 60% by end of 2002
--Italy's board of Blu to consider bids received for all or part of the company
--Sonera to issue 3G warning
FINANCIAL REPORTS
--Sohu.com fourth quarter revenue grows by 15% on wireless services
--Time Warner Telecom posts $32.5 million loss in the fourth quarter
--Pacific Internet reports narrowed net loss in 2001, net revenue increases by 29%
--Sprint's senior secured debt downgraded to BBB from BBB+
--Comcast cashflow drops 3% in fourth quarter, total revenues increase 17% to $2.82 billion
--Cisco Systems reports higher than expected profits and sales in fiscal second quarter
--CommScope posts lower fourth quarter earnings excluding charges
INTERNET /E-COMMERCE
--Microsoft launches mobile versions of its MSN Internet portal in Europe
--Google expands deal with EarthLink
--McDonald's Japan to launch Internet-based business joint venture
--PayPal postpones offering
--Interior Department to work on improving its computer systems
--NTT DoCoMo in talks with Germany's E-Plus to launch i-mode mobile Internet access service
JAPAN
--Japan's Crosswave Communications completes construction of private network for Sony
--Japan's Nippon Telegraph and Telephone defies government call for access fee cuts
--Telecommunications Carriers Association says number of mobile phone users in Japan increased in January
LATIN AMERICA
--GlobeNet's Brazilian undersea cable ring to be ready for service in March or April
--Brazil's Embratel to focus on products with greater profit margins, not on revenues
--Telcel dominates Mexico's mobile market with 77% market share
MERGERS & ACQUISITIONS
--Advanced Micro Devices to acquire Alchemy Semiconductor
MOBILE & SATELLITE
--Handspring says Treo wireless device will be key in helping the company
--Ericsson choose Logica for SMS solutions, wins Latin American deal
--Iridium Satellite to put five new satellites into space
--AT&T Wierless Services will no longer seek new business for its air phone service
--Electronic Arts and Jamdat Mobile agrees to jointly publish soccer and golf games for cell phones in North America and Asia
NETWORK INFRASTRUCTURE
--Juniper Networks unveils new router and new product features designed for the edge of the network
--Sun MIcrosystems to announce strategy regarding free Linux operating system
REGULATORY
--Critical Path and two former executives settle SEC accounting fraud case
INDIA
--Bharti bid to make International long distance rates cheaper
NEW BOOK
--Understanding Fiber Optics
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ASIA PACIFIC
--China Unicom Group enlists 120,000 new CDMA customers since early January
China Unicom Group enlisted 120,000 new customers since launching its CDMA-standard mobile network in early January. The company, parent of Hong Kong-listed China Unicom, said an additional 500,000 customers from the former Great Wall CDMA network it acquired are using the new system, which is based on technology developed by Qualcomm. Company watchers, many of whom have questioned the company's decision to build a nationwide CDMA network alongside its existing GSM network, have said early CDMA customer takeup appears to be slow, in part due to the lack of handsets.
--Shanghai battles with Suzhou for Taiwan Semiconductor Manufacturing's China base
Shanghai and Suzhou are in the midst of a fierce battle to enter TSM to set up shop in china. Shanghai already attracted $4.6 million microchip investments since June 2000, but needs foundries to become a regional chip production base. TSMC said it wants to set up a China unit, but is waiting for Taiwan government's approval, which is considering lifting a ban on chip investments in political rival China.
--Sri Lanka Telecom seeks to renegotiate management contract with Japan's NTT
Sri Lanka Telecom (SLT) seeks to renegotiate a management contract with Japan's Nippon Telegraph and Telephone (NTT) which also has a 35.2% stake in the fixed-line monopoly. The five-year deal is due to expire in August, and the government, the majority stakeholder of SLT, gave six months formal notice to NTT. The announcement comes ahead of renewed efforts by the government to sell its stake in the company and seek new investors who might want management control.
--Taiwan's auction for 3G wireless licenses brings the government $1.4 billion
Taiwan's auction for 3G wireless licenses ended after 19 days and 180 bidding rounds, bringing the government $1.4 billion, about 50% more than it originally expected for the five licenses. The country's three largest mobile operators, state-owned Chunghwa Telecom, Taiwan Cellular and Far EasTone Telecommunications all secured a license. Two new entrants, Taiwan PCS Network and Asia Pacific Broadband Wireless Communications, won the other two licenses.
BUSINESS
--Verizon and SBC drop bid plans for WorldCom
Verizon and SBC both have considered bidding for WorldCom. Now, the two companies have dropped the plans for the bid due to concerns about the state of the long-distance telephony market, and to worries about aggressive accounting techniques used by WorldCom in the past. A spokesman from WorldCom said that all of its accounting practices are in line with generally accepted accounting practices.
--AT&T introduces flat-rate long-distance calling plan
AT&T introduced a new consumer calling plan enabling unlimited calls from home to other AT&T customers for a flat fee, making its latest bid to slow the drop of its revenue and compete with Baby Bells and wireless firms. The company said its AT&T Unlimited plan will cost $19.95 a month. Calls to non-AT&T customers will cost 7 cents a minute. The plan mirrors pricing adopted by ISPs, many of which charge a flat rate for unlimited monthly service.
--Storm Telecommunications seeks partners to resell its Ethernet-on-demand service to corporate customers
Storm Telecommunications, a UK-based carrier, seeks for partners to resell its Ethernet-on-demand service to corporate customers. The company expects to sign its first two direct customers for the service this week. The company launched the service, which is based on switch routers from Riverstone, in September 2001. It enables companies to extend their LANs between international offices and to scale bandwidth as and when required. The company hopes to get four partners in each of its key markets: the UK, France, Germany, the Nordics and the US.
--Global Crossing seeks better offer
Global Crossing, a telecommunications carrier seeking Chapter 11 protection, asked a judge to approve bidding procedures for selling the company's assets, including its 100,000-mile fiber-optic network. The company had filed for bankruptcy and agreed to a buyout offer from Hutchison Whampoa for $750 million for a 70% stake in the company. The company, in papers filed earlier this week in US Bankruptcy Court in Manhattan, detailed the buyout proposal and its plan to seek better offers to sponsor its reorganization.
--SBA Communications to close offices and build fewer towers this year, to cut employees
SBA Communications Corporation, which leases antenna space to mobile phone service providers, plans to cut an unspecified number of employees, close offices and build fewer towers this year. The company expects to build or buy 250 to 350 towers this year, instead of 400 to 600. The company expects to have costs for severance and office closings of $35 million to $65 million in the first quarter. The company will report final fourth quarter results on Feb. 27.
--Talks over possible partnership between Germany's Infineon Technologies and South Korea's Hynix Semiconductor on hold
Talks over a possible partnership between Germany's Infineon Technologies and South Korea's Hynix Semiconductor are intensifying, with Infineon sending a team of negotiators to South Korea. An Infineon spokesman confirmed that it has a team in South Korea, but declined to comment on when it arrived or the state of the discussions. Hynix is also in talks with Micron Technology, a maker of memory chips, about selling some of Hynix's assets. But Hynix and Micron disagreed about the value of the assets, and the recent increase in memory chip prices has increased pressure on Micron to increase its offer opening the door for Infineon.
--Goldman Sachs Group to share role as Tyco advisor
Until this week, Goldman Sachs was the sole advisor on Tyco's elaborate plan to split into four companies. The deal is expected to generate more than $100 million in fees. However, after a series of quiet negotiations, JP Morgan Chase, Credit Suisse Group's Credit Suisse First Boston and Citigroup's Salomon unit all piled onto the deal. Each of the banks is a major lender to Tyco, and they used their critical lines of credit to help them get hired by Tyco. According to the people close to the company, the three banks said they were retained as co-advisors alongside Goldman and will help with the sale or spinoff of any or all of Tyco's businesses. The advisors say they will split the fees, depending on their contributions.
--Level 3 says its 3Voice Termination product will remain
Level 3 said its 3Voice Termination product will remain. Several reports brought the decision to discontinue the service to light last fall, though there were no formal statement from the company at the time. However in response to customer feedback, the company never actually turned the service off. 3Voice Termination carries traditional circuit-switched voice as IP in the long-haul stretch before handing it back to the PSTN at the terminating network. The company has however stopped selling the service to smaller resellers and will also not terminate traffic outside of North America, since the cost of interconnecting with local partners erodes the already thin margins that exist in the international VoIP business. Level 3 will introduce a new VoIP product in the second quarter of the year.
DEALS
--BellSouth to buy $350 million in services from Qwest Communications
BellSouth, a local telephone company, will buy $350 million in services from Qwest Communications, a telephone and data services company, over a four-year period to expand its offerings. The company said the agreement takes effect immediately. It also said the companies agreed to terminate a previous purchase agreement.
--Siemens wins $305.4 million UMTS deal from Deutsche Telekom
Siemens won a $305.4 million deal for new generation mobile phone technology. The two companies have signed a 10-year agreement under which Siemens will deliver UMTS mobile networks and switching systems to Deustche Telekom. DT was also expected to sign UMTS equipment supply deals with Nokia and Nortel by the end of the second quarter. The orders were expected to be worth millions of dollars.
--CMG wins global 3G messaging software contract with Hutchison 3G
CMG, an IT services group, won a global contract with Hutchison 3G to provide software for picture messages and data to next generation mobile handsets. The deal is CMG's third contract win for MMS that enables users to send pictures, video and audio clips, adding to existing deals with Norway's Telenor and Sweden's Telia. CMG said the deal with Hutchison 3G in the UK enables all Hutchison group companies and affiliates to use a range of its 3G-based messaging software. Hutchison plans to start 3G services in the July to September quarter of 2002, using dual-mode handsets capable of operating on both 3G and GSM networks that will be made by Japan's NEC. The financial terms of the deal were not disclosed.
EUROPE
--Italy's Wind plans to float at least 20% stake in IPO
Italy's Wind, a mobile telecom group, plans to float at least 20% of the company in an initial public offering later this year. The company said the IPO is expected to be ready between the end of March and the beginning of April. The floatation was originally planned for the second half of last year but was postponed because of market weakness. Wind is 73.4% owned by Enel, an electricity giant, with the rest held by France Telecom.
--Belgium's three mobile phone operators seek gov't permission to delay roll-out of next generation mobile phone services
Belguim's three mobile phone operators seek government permission to delay the roll-out of next generation mobile phone services by one year, because they have not been able to set up the network on time. The operators, Proximus, Mobistar, and KPN, filed a joint request with the telecommunications ministry on Jan. 31 to postpone the planned Sept. 1, 2002 launch date by 12 months. The company said the operators want to postpone the date of the roll-out, because they have not received all of the equipment for the network, have problems making the new handsets work and have not obtained all the local government permits to put up the towers for the network. A telecommunications ministry spokeswoman said the minister will decide whether to postpone the launch after receiving the advice of telecommunications regulator, IBPT.
--Estonian Eesti Telekom expects mobile penetration rate to increase between 58% and 60% by end of 2002
Estonian Eesti Telekom expects the country's mobile phone penetration rate to increase between 58% and 60% by the end of 2002 from 52% at the end of 2001. The company said earlier that the state communication board estimated the counry's mobile penentration rate at 52% and EMT's market share at 54% by the end of the year. The company is 49% owned by Finland's Sonera and Sweden's Telia, while the Estonian state has a 27% stake in the company and a single controlling golden share.
--Italy's board of Blu to consider bids received for all or part of the company
The board of Blu, an Italian mobile phone operator, will meet to consider bids received for all or part of the company. Blu, a consortium of live wireless operators, failed to win a license for the next wave of radio spectrum, and has said it will either be sold or liquidated. Roger Westbury, a spokesman for British Telecommunications, which owned 29% of Blu, said that a liquidation is an extreme option and not in the cards at the moment.
--Sonera to issue 3G warning
Sonera, a Finnish telecommunications group, forecast that a mass market for 3G mobile services will not appear until 2004 or 2005. The company, which through its joint ventures holds greenfield 3G licenses in Germany, Italy and Spain, also warned of slowing growth in its existing company's mobile operations where the lack of handsets equipped to exploit the new GPRS and 3G networks will act as a brake. The company said that the growth in its Finnish mobile operations is expected to slow down significantly from the figure last year and to be markedly less than 5% in 2002.
FINANCIAL REPORTS
--Sohu.com fourth quarter revenue grows by 15% on wireless services
Sohu.com, a leading Chinese Web firm, said its fourth quarter revenues grew by 15% over the third quarter as wireless services. Including sales of cell phone service using SMS increased 41% and increased total revenue up to $4.1 million in the fourth quarter of 2001 from $3.8 million in the third quarter. It said advertising sales, which make up most of its revenues, grew by only 3% in the quarter. Other revenues, including sales of downloadable cell phone screens and subscriptions for news and information sent to mobile phone via SMS, made up a record 39% of Sohu's revenues.
--Time Warner Telecom posts $32.5 million loss in the fourth quarter
Time Warner Telecom, which provides voice and data communications services to businesses, posted a wider fourth quarter loss due to the costs of expanding its network and a restructuring charge related to job cuts. The company, which is partly owned by AOL Time Warner, said its net loss totaled $32.5 million, or 28 cents a share, compared with a loss of $3.4 million, or 3 cents a share, last year. Excluding one-time items, the company said its loss was 24 cents a share in the fourth quarter of 2001. The company blamed its wider quarterly loss on depreciation and interest expenses related to an acquisition, costs to expand its network in five markets, and a $6.8 million restructuring charge.
--Pacific Internet reports narrowed net loss in 2001, net revenue increases by 29%
Singapore-based Pacific Internet reported that its 2001 net loss narrowed to $8.1 million from $12.1 million as its net revenues increased by 29%. The company, an Internet service provider, had a net loss that shrank to $800,000 from $4.7 million in the same 2000 period. The company said it was the fifth consecutive quarter of improved operating performance. Pacific Internet, a unit of Singapore conglomerate SembCorp Industries, said it aimed to return to profitability by the third quarter of 2002 on the back of the steady improvement. The forecast of a return to profitability was one quarter earlier than it previously estimate. The company said it will focus on broadband services, expanding its corporate market and increasing its regional businesses.
--Sprint's senior secured debt downgraded to BBB from BBB+
Sprint's senior unsecured debt was downgraded to BBB from BBB+ by Fitch, a credit-rating agency, which cited concerns about the telecommunications concern's long-distance business and its Sprint PCS wireless unit. Fitch also said it had concerns about Sprint's ability to improve its financial position enough this year to sustain a higher rating. Earlier this week, the company reported a loss of $1.23 billion. Revenues at its long-distance unit dropped 11%, though revenue at its PCS unit increased 42% to $2.76 billion. In addition, Fitch analyst, John Culver, said the agency is concerned that the wireless unit might not meet expectations for EBITDA. The agency said the rating outlook is stable.
--Comcast cashflow drops 3% in fourth quarter, total revenues increase 17% to $2.82 billion
Comcast, a US cable company, said its cashflow dropped 3% in the fourth quarter after the company absorbed the cost of adding former customers of ExciteAtHome to its network. The company, which will become the large US cable company if its $72 billion bid for AT&T Broadband passes with regulators, said taking on Excite's customers cost an extra $140 million in the quarter. Without the added costs from Excite, which went bankrupt last year, its cashflow would have increased 17.7%. Total revenues increased 17% in the quarter to $2.82 billion, driven by higher cable subscriptions and sales at its retail group, QVC. The company said it expected revenue to increase 10% to 12% in 2002, with cashflow up 12% to 14%. The increases are based on projections it will add 600,000 to 700,000 digital cable units and 400,000 to 500,000 high-speed Internet customers.
The company also said it expected to cut its capital spending by 30% to $1.3 billion in 2002, representing a large cut in what it spends to upgrade its cable systems and introduce new services. Cable revenues increased 9.1% to $1.37 billion in the fourth quarter, including cable system exchanges with AT&T and Adelphia Communications. The company added 214,000 digital cable subscribers in the quarter.
--Cisco Systems reports higher than expected profits and sales in fiscal second quarter
Cisco Systems reported higher than expected profits and sale in the fiscal second quarter. But executives were cautious in offering guidance for the current quarter, saying visibility remained limited and revenues will probably remain flat or increase only very slightly. For the three months ended Jan. 26, the company earned $660 million, or 9 cents a share, down 24% from earnings of $874 million, or 12 cents a share, last year. Sales were $4.8 billion, down 28% from $6.7 billion in the second quarter last year. Excluding special items, the company earned $664 million, or 9 cents a share, compared with profits of $1.3 billion, or 18 cents a share, last year. It was the second quarter-to-quarter increase in profits and revenues.
--CommScope posts lower fourth quarter earnings excluding charges
CommScope, a maker of coaxial and fiber optic cable, posted lower fourth quarter earnings excluding charges and said the current quarter will mark the bottom of the telecommunications downturn, which hammered networking gear suppliers. Excluding charges, the company reported earnings of $5.9 million in its fourth quarter, or 10 cents a share, compared with earnings of $22.9 million, or 43 cents a share, last year. Its fourth quarter revenues were $143.5 million, down 42% from $248 million last year. CommScope issued a preliminary fourth quarter report, excluding the effects of a recent major acquisition and partnership. The company said it expects to release its complete fourth quarter results in March.
INTERNET /E-COMMERCE
--Microsoft launches mobile versions of its MSN Internet portal in Europe
Microsoft launched mobile versions of its MSN Internet portal in Europe which are specifically designed for the small color screens of handheld computers. Two mobile MSN portals in France and Germany, for Pocket PC computers that have access to the Internet over a Wireless LAN or a mobile phone network. British and Spanish versions will launch in coming weeks. The portals will have special web addresses that are different from the URLs that MSN uses for its portals that are viewed on a large personal computer screen.
The company also published the first usage numbers of the SMS text message version of its Hotmail, a Web-based email service. Hotmail over mobile phones generated 27 text messages per user per month in the first month of service in Denmark and Switzerland. These messages come on top of an average 48 messages a month which subscribers receive. The initial success encouraged Microsoft to also open up its Instant Messenger (IM) service to mobile phones via SMS text messages. Microsoft said the IM service will be ready within six months. It has worked with its partner, MIGway, to limit potential delays that occasionally disturb SMS traffic. It claims that delivery of text message is guaranteed within 20 seconds.
--Google expands deal with EarthLink
Google, an Internet search firm, expanded its deal with EarthLink to include advertisements along with Google's unbiased search results on the EarthLink site. Under the new agreement, EarthLink, which lists search results from Google on its site, will also start to include Google's AdWords, which are paid advertisements that appear when users enter certain keywords. The financial terms of the deal were not disclosed.
--McDonald's Japan to launch Internet-based business joint venture
McDonald's Japan, a restaurant operator, will launch an Internet-based business to provide easy access to information at its shops and settle payments online. EveryD.com, a Web services firm, will launch a joint venture from April that will provide users with a mini scanner to read bar codes that will allow them to jump to Web pages, buy products and access information on the Web. Similar to the CueCat bar code scanning system, the mini scanner can also be attached to most Internet-access mobile phones to direct users to Web sites. The company, which is 54.9% owned by McDonald's Corp., said it will invest $9 million in the joint venture.
--PayPal postpones offering
PayPal, an online payment company, which was to have set a price for its initial public-stock offering yesterday after the close of trading, postponed the offering. The timing of the offering now is unclear. The delay came after a lawsuit filed against PayPal. The company's rival, CertCo, filed the lawsuit earlier this week, claiming patent infringement.
--Interior Department to work on improving its computer systems
Interior Secretary, Gale A. Norton, told a Congressional panel that the department officials are working to improve its computer systems, but were not certain when some computers will be permitted access to the Internet. In December, a federal court ordered the department to shut down its Internet access and some computer connections after American Indian tribes filed a class-action lawsuit seeking to block the department computer sites on grounds that they were dangerously insecure. Judge Royce C. Lamberth ruled that hundreds of million of dollars in a trust fund for Indians administered by the department were vulnerable to security breaches via the Internet. About 90% of the department is still cut off from the Internet.
--NTT DoCoMo in talks with Germany's E-Plus to launch i-mode mobile Internet access service
NTT DoCoMo, Japan's mobile phone operator, said it was in talks with Germany's E-Plus, a mobile firm, to launch its i-mode mobile Internet access services to Europe's largest economy. The company has already announced that Royal KPN NV will introduce the service in the Netherlands and Belgium as early as April.
JAPAN
--Japan's Crosswave Communications completes construction of private network for Sony
Japan's Crosswave Communications, a broadband data carrier, completed the construction of a private network for Sony and its subsidiaries across Japan. The broadband data network links more than 250 sites, including Sony's sales and service offices, manufacturing plants and computer centers located throughout Japan. Construction of the new network started in the fall of 2001 in cooperation with subsidiary Crosswave Services, Internet initiative Japan (IIJ) and IIJ Technology. The company said the network was based on new-generation network services such as large-capacity lines in the SONET OC3, 150 Megabits per second, class and Japan's first nationwide Ethernet service.
--Japan's Nippon Telegraph and Telephone defies government call for access fee cuts
Japan's Nippon Telegraph and Telephone (NTT) said its financial health was too weak to lower its interconnection fees, which the government estimates could be cut by more than 10%. The company has already pared fees by 20% since a US-Japan bilateral accord was set in July 2000, but the Telecommunications Ministry said the fees could be further cut. The debate over interconnection rates, which NTT's local carriers charge competitors to link to their networks, has surfaced because Japan promised to re-evaluate the rates as part of the accord. The US and Japan already held preliminary talks on another possible round of cuts. NTT controls nearly all lines connecting homes and offices in Japan, which both domestic and overseas rivals need to offer their own services.
--Telecommunications Carriers Association says number of mobile phone users in Japan increased in January
The Telecommunications Carriers Association said the number of mobile phone users in Japan increased 0.6% month-to-month in January. The association said the number of mobile users was 67.5 million at the end of January, up from 67.1 million in December. The growth was supported by new offerings such as NTT DoCoMo's 3G service and KDDI's global positioning system (GPS) navigation system. NTT DoCoMo added 250,000 new subscribers to bring its total to 39.9 million. The number of 3G subscribers increased to 43,000 in January, up from 27,000 in December. KDDI added 60,000 of new sign-ups in January. The total number of GPS and movie service subscribers increased to 287,800 in January, up 129,100 in December. J-Phone's Internet-enabled J-sky service also showed growth to 9.5 million users in January.
LATIN AMERICA
--GlobeNet's Brazilian undersea cable ring to be ready for service in March or April
GlobeNet Communications, a Canada-based carriers' carrier and formerly the Latin American division of 360Networks, a bankrupt network operator, expects its Brazilian undersea cable ring to be ready for service in March or April. The company already operates a Caribbean fiber ring connecting the US, Bermuda, Venezuela and Brazil, which is used by Cable & Wireless and TeleBermuda, a GlobeNet subsidiary. The Brazilian ring will connect the Caribbean ring to Rio de Janeiro, Brazil. The company also plans to build a third ring from Rio to Buenos Aires, Argentina, connecting Belo Horizonte, Sao Paulo, Curitiba and Porto Alegre.
--Brazil's Embratel to focus on products with greater profit margins, not on revenues
Brazil's Embratel, a long-distance telephone operator, will focus on products with greater profit margins, crack down on non-payment of bills by customers and cut its focus on increasing revenues to return to profit this year. The company, which is 51.8% owned by WorldCom, reported a 2001 loss of $231 million after a profit of about $260 million in 2000.
--Telcel dominates Mexico's mobile market with 77% market share
Telcel, part of the business empire of Carlos Slim, ended 2001 with 17 million subscribers, or some 77% of the market. The company's parent company, America Movil, was spun off from Slim's Telefonica de Mexico (Telmex) in late 2000. Telcel, which has nationwide coverage, expects to add 3.5 million new subscribers this year, slower growth than last year as the company works off a bigger base. The company will start its change to GSM technology and add data services over mobile telephones and improve its service.
MERGERS & ACQUISITIONS
--Advanced Micro Devices to acquire Alchemy Semiconductor
Advanced Micro Devices (AMD) will acquire privately held Alchemy Semiconductor, which designs and markets low-power microprocessors, to enter the market for handheld electronics. Alchemy will give AMD access to a processor based on a MIPS architecture, while Intel is pushing XScale, derived from competing architecture known as ARM. Alchemy was founded by Rick Witek and Greg Hoeppner, who helped develop the Alpha and StrongARM processors while at Digital Equipment Corporation, which Compaq Computer acquired in 1998. They will join AMD's newly established Personal Connectivity Solutions business. AMD said it expects to complete the acquisition in the first quarter.
MOBILE & SATELLITE
--Handspring says Treo wireless device will be key in helping the company
Handspring, a handheld computer maker, said its Treo wireless device will be key in helping the company return to the black in 2002. Treo is a palm-sized personal organizer that doubles as a mobile phone, offering email, messaging and Web browsing. Last month, the company posted a net loss of $19.8 million, or 16 cents a share, for its second quarter ended Dec. 31, compared with a loss of $15.2 million, or 15 cents a share, last year. Revenues dropped to $70.5 million from $115.6 million. The company forecasts its fiscal third quarter revenues at $61 million to $66 million and fiscal fourth quarter sales at $86 million to $96 million.
--Ericsson choose Logica for SMS solutions, wins Latin American deal
Logica, a software and integration specialist, will be the preferred supplier of SMS solutions to Ericsson, a mobile equipment manufacturer. Logica and Ericsson completed their global partnership agreement at the end of last year. Ericsson said it chose Logica, because of its global coverage and its ability to provide support in the five global regions. At the same time, Logica said the partnership won its first deal with a mobile operator in Latin America. Logica's share of the deal is worth around $2.3 million. With the Latin American win, Ericsson will replace existing TDMA SMS platforms with Logica's Telepath SMS platform, the UK IT firm. Logica's solutions will be used to deliver multiple SMS and over the air provisioning for 15 million subscribers.
--Iridium Satellite to put five new satellites into space
Iridium Satellite will be putting five new satellites into space. Boeing will launch the birds on a Delta II Vandenberg Air Force Base in California. They will be used as spares and will join the 66 low earth orbit birds already in place along with seven other extras. A further two satellites will be launched in June. The company's satellite network provides coverage all over the earth including areas beyond the reach of cellular networks such as the oceans, airways and the polar regions. Boeing Space and Communications operates the satellites while Iridium sells its service via the work of more than 20 service providers worldwide.
--AT&T Wierless Services will no longer seek new business for its air phone service
AT&T Wireless Services will no longer seek any new business for its air phone service although it will continue to serve existing customers. The company provides telephone connections to airplanes through handsets installed in the back of the seats. It declined to identify the customers but American Airlines, Northwest Airlines and Alaska Air are all known to carry AT&T Wireless in flight phones. About 45% of the US population currently owns cell phones. In contrast to reasonably priced cell phone service, air phones can cost $3 just to make a connection and another $7 for each minute of use.
--Electronic Arts and Jamdat Mobile agrees to jointly publish soccer and golf games for cell phones in North America and Asia
Electronic Arts, a video game publisher, and Jamdat Mobile, a wireless content company, agreed to jointly publish soccer and golf games for cell phones in North America and Asia. The two companies will jointly produce "EA Sports Tiger Woods PGA Tour" for next-generation cell phones from Sprint PCS Group and Verizon Wireless in the US. They will also offer a soccer game, "EA Sports FIFA World Cup 2002," for subscribers using NTT DoCoMo cell phones in Japan and KT Freetel phones in South Korea. The companies said it plans to launch the games with Verizon in April and with Sprint in June. No time has been set for the Asian launches, but it will coincide with the World Cup Soccer, which will be held this year in Japan and South Korea starting May 31.
The Verizon game will run on the BREW operating system being developed by Qualcomm. The Sprint game will run on a mobile version of Sun Microsystems's Java platform called J2ME. The FIFA game will run on J2ME phones in Japan and BREW in South Korea. Subscribers will have to pay an additional fee for the games, but pricing for the US market has not been set. The users in Japan will pay $2.24 per month for the World Cup games, with a similar pricing in South Korea.
NETWORK INFRASTRUCTURE
--Juniper Networks unveils new router and new product features designed for the edge of the network
Juniper Networks unveiled a new router and new product features designed for the edge of the network. The company, which unveiled its first edge products in September 2000, said it now gets over a quarter of its business from edge sales. The new router is the M40s, an enhancement of the company's original M40 product, but with full redundancy in all its components. Due to its size, the company expects it will be largely used in the edge, though it also runs in the core. Of its current 500 service provider customers, it estimates that more than half use Juniper products in the edge. Juniper also announced new features for its edge portfolio; a slot-in card allowing lower-speed access, a software upgrade for layer 2 IP VPNs; a slot-in card for IPsec tunnelling; and a new graceful routing protocol restart feature.
--Sun MIcrosystems to announce strategy regarding free Linux operating system
Sun Microsystems, a network computer maker, will make an announcement about its strategy regarding the free Linux operating system. The company tested the waters in the Linux market with a line of low-end machines running that are meant to run single dedicated tasks, like hosting e-mail for a small office. However, it refused to acknowledge Linux as an operating system for high-end systems, despite analyst concerns that Linux could eventually encroach on high-end Unix environments, including Sun's flavor of Unix, Solaris.
REGULATORY
--Critical Path and two former executives settle SEC accounting fraud case
Critical Path, an Internet company, and two former executives settled allegations of fraudulent accounting that led to overstating earnings by $10.8 million in two straight quarters during fiscal 2000. The SEC said it instituted an administrative proceeding against the company, which provides messaging solutions for wireless and land-line carriers. Critical Path, its former president, David Thatcher, and former vice president of sales, Timothy Ganley, each settled with the SEC, without admitting or denying any allegations of wrongdoing. In a separate case, federal prosecutors filed criminal charges against Thatcher and Ganley. If found guilty, Ganley faces up to 10 years in prison and a $1 million fine, while Thatcher faces a maximum of five years in prison and a $250,000 fine.
In the SEC case, Thatcher agreed to pay a $110,000 fine and accepted a five-year ban on taking a job as an officer or director of a public company. The SEC said Thatcher, as the acting CFO, alleged played a role in improper accounting involving eight fictitious, contingent or backdated transactions in the third and fourth quarter of fiscal 2000. Ganely was accused of participating in one of eight transactions and selling 1,300 Critical Path shares he held while knowing of the alleged securities fraud. According to the SEC, he agreed to pay $105,000, which includes fines and losses he avoided by engaging in insider trading. No fine was assessed against the company.
INDIA
--Bharti bid to make International long distance rates cheaper
Bharti Telesonic Ltd. (BTSOL) is taking the lead in offering its subscribers more affordable international long distance (ISD/ILD) rates. According to industry sources, the national long-distance (NLD) arm of the Bharti group has signed a memorandum of understanding (MoU) with Videsh Sanchar Nigam Ltd. (VSNL) for carrying the international long-distance traffic at rates lower by 70 percent than the rates offered by Bharat Sanchar Nigam Ltd. (BSNL) to its subscribers. This revenue-sharing arrangement, in effect, would mean that the company will be in a position to offer its subscribers ISD call rates which are much lower than what one pays at present.
NEW BOOK
--Understanding Fiber Optics
by Jeff Hecht
For courses in Introduction to Fiber Optics and Introduction to Optical Networking in departments of Electronics Technology and Electronics Engineering Technology. Also suitable for corporate training programs.Ideal for technicians, entry-level engineers, and other nonspecialists, this best-selling practical, thorough, and accessible introduction to fiber optics reflects the expertise of an author who has followed the field for over 25 years. Using a non-theoretical/non-mathematical approach, it explains the principles of optical fibers, describes components and how they work, explores the tools and techniques used to work with them and the devices used to connect fiber network, and concludes with applications showing how fibers are used in modern communication systems. It covers both existing systems and developing technology, so students can understand present systems and new developments.
2001, 764 pages, $109.95 USD + shipping
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