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Today's report from Web Editor
Susan Rush
• BT Says, "Talks On"
• Q3: Monies Gained, Monies Lost
• Nortel Snags $1B Deal
• Broadcom Goes For Buy No. 10
• Broadband Briefs
BT Says, "Talks On" The
Wall Street Journal is reporting that merger talks between phone
company giants AT&T and British
Telecommunications are dead, but BT says, game on. "We remain close
friends and business partners. The talks are still going on and if
[AT&T] walked away, we would say so," BT explained in a statement
earlier today." As a matter of policy, AT&T does not comment on
rumors and speculation," said an AT&T spokesperson.
In September, BT confirmed rumors that the two were in
discussions. A union between the two would produce one of the world's
largest phone companies and give birth to the third largest wireless service
provider. It is still unclear whether the duo will move forward with plans
for a company-wide merger or just combine certain aspects of their
operations, such as their business services-oriented units.
If they try to win approval for a full merger, the companies
may face the same uphill battle that WorldCom
and Sprint faced earlier in the
summer. The WorldCom/Sprint merger plans were ultimately dropped after
the European Commission blocked the
merger in Europe and the U.S. Department of
Justice blocked the marriage in the United States.
AT&T investors are growing restless, and the company
knows it has to do something to curb its flagging stock price, but the
question is what? A deal with BT may or may not be the answer, but one thing
is for sure, AT&T Chairman C. Michael Armstrong must start producing
some positive results from his efforts to reposition the company in the
broadband marketplace or he might find himself out of a job.
Related Stories:
The
Talks: AT&T And BT, BroadbandWeek Direct, 9/18/00
BT Confirms AT&T Talks, Wireless Week, 9/18/00
Q3: Monies Gained, Monies Lost
It's that time of year again, when companies report financial
gains and losses. And as is par for the course, some came out ahead and some
fell short.
Telecommunications equipment maker Turnstone
Systems, Inc. saw a 12-fold jump in profits during the third
quarter. Revenues increased to $56.2 million, up from $9.0 million a
year ago, and net income for the quarter ending September 30 increased $12.8
million, or 19 cents a share, from $1 million, or 2 cents a share during Q3
1999.
Level 3 Communications grew
its customer base to 2,400 and the company's consolidated revenue reached
$341 million for Q3 2000. While revenues were up, the company suffered a net
loss of $351 million, or 96 cents a share for the quarter.
Covad Communications Group,
Inc. reported a 15 percent increase in revenues for the quarter ended
September 30, to $66.7 million, up from $58.2 million for the previous
quarter. The broadband service provider suffered a higher than expected net
loss of $189.9 million, compared to a loss of $131.5 million during the
second quarter. Covad blames the tight financial market and the inability of
some of its customers to pay their bills for its decline.
Third quarter net income for phone equipment maker Copper
Mountain Networks Inc. rose to $12.1 million, or 21 cents a share,
compared to $4.6 million, or 8 cents a share for the same period a year
earlier. Despite the positive Q3 results, the company is predicting a
downturn in sales and profits for the fourth quarter. The company says its
customers plan to buy less new gear during the quarter.
Related Stories:
Enron
Fuels Income, BroadbandWeek Direct, 10/17/00
PMC-Sierra
Sees Net Loss, But Revenues Rise, BroadbandWeek Direct, 10/13/00
Nortel Snags $1B Deal
Nortel Networks
signs a deal to the tune of 1 billion smackers to provide optical
networking gear for Aerie Networks'
nationwide broadband network. Over the next four years, Nortel will be the
main supplier of optical equipment for Aerie's 20,000-mile U.S. broadband
network.
Even though Aerie, a Denver-based start-up, is a new kid on
the block, the company's goal is to be offering network services in 194 U.S.
cities by 2004. Last month, Corning Inc.
inked a deal with Aerie to provide the fiber for the network.
In other Nortel news, the company will team with Hewlett-Packard
Company to create an open and interoperable framework that can reduce
Internet data center bottlenecks. Nortel's high-bandwidth optical networking
technology will be integrated with HP's Internet infrastructure.
Related Stories:
Aerie
Networks Breaks Ground, Multichannel News, 9/25/00
Aerie
Embarks On National Net, Multichannel News, 9/18/00
Broadcom Goes For Buy No. 10
If Broadcom had to sum
up its activities so far during this year of the new millennium in one
phrase, it would most likely be "buy, buy, buy." The silicon
provider has already made nine acquisitions this year, and is going for
number 10, with the purchase of Allayer
Communications. The deal for the switching technology chip maker
is in line with Broadcom's effort to solidify its presence in the broadband
market.
Broadcom will issue 1.23 million Class A shares in exchange for all
outstanding Allayer preferred and common stock. If certain performance goals
are satisfied, Broadcom will issue up to an additional 300,000 Class A
shares. The acquisition has been approved by both companies' boards and is
expected to close within the next 60 days.
Among Broadcom's most recent deals, are the acquisitions of optical
communications chip maker NewPort
Communications, semiconductor company Silicon
Spice and Digital Furnace, a
supplier of communications algorithms and software for interactive services
over broadband networks.
Related Stories:
Broadcom
Deals Again, BroadbandWeek Direct, 8/14/00
Broadcom
Stocks Larder With Silicon Spice, Multichannel News, 8/14/00
Broadband Briefs:
- Universal
Broadband is on shaky ground as the telecommunications firm failed to
secure new vendor financing and is unsure about its future.
- Verizon
Communications and Interland Inc. enter
a three-year partnership to deliver Web hosting and e-commerce solutions to
small and mid-sized businesses in the Northeast and Mid-Atlantic states.
- Rhythms
NetConnections Inc. and FIRETAP
Communications team to deliver DSL-based, high-speed Internet access to
the real estate industry.
- Time Warner
Cable selects RMI.NET, Inc. to test
multiple-company provision of high-speed Internet service over TWC's cable
systems.
- DataVoN, Inc.
expands its Voice over IP network to offer service in 29 additional U.S.
markets. DataVoN's goal is to bring its points of presence to more than 40
markets by year's end.
- NetVoice
Technologies teams with Cisco Systems, Inc.
to bring fixed broadband wireless services to NetVoice's current customer
base. Service will be rolled out in Dallas, Houston, Tampa and Los Angeles.
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