|
Today's report from Web Editor
Susan Rush
• WorldCom Jumps On The Restructure Wagon
• Broadband Is On The Fast Track
• Covad CEO Hangs It Up
• Alcatel Does A Billion Dollar 360
• Cox Revs In Q3
• Broadband Briefs
WorldCom Jumps On The Restructure Wagon It
looks like AT&T may be a trendsetter.
On Monday, reports were flying that British
Telecommunications might follow in AT&T's footsteps and split up its
operations, and now WorldCom plans to
follow suit, sort of. Although the move is not quite as bold as AT&T's
plan to quarter its company into four separate businesses, WorldCom will
split itself into two tracking stocks: WorldCom (WCOM) and MCI (MCIT).
"AT&T took the first step, WorldCom is following close on its heels and I wouldn't be surprised if
another telecommunications company makes an announcement soon," says Michael Paxton, senior analyst for
Cahners In-Stat Group, a Broadband Week sister company. "Restructuring plans seem to be the flavor of the week for telecoms."
Under its plan, WorldCom will focus on high-growth areas
including hosting, data, Internet and international businesses, while MCI
will focus on consumer long-distance, wholesale and Internet dial-up
businesses. The design to realign is being announced in tandem with a
warning that the company's fourth-quarter earnings will fall below
expectations. WorldCom lowered its Q4 earnings predictions to 34 to 37 cents
a share, a far cry from the 49 cents a share analysts were estimating for
the quarter.
Earlier this year, WorldCom was on its way to becoming an
industry behemoth with its acquisition of Sprint,
but the merger was blocked by regulators. This blow changed the rules of the
game and with competition heating up from regional Bell companies, WorldCom
was forced to search for a new business avenue. This new plan to maximize
its shareholder value seems to be WorldCom's answer; unfortunately no one
told Wall Street that this restructuring plan is the right move. WorldCom's
stock plunged nearly 18.5 percent following the announcement.
Related Stories:
BT:
Following In AT&T's Footsteps, BroadbandWeek Direct, 10/30/00
AT&T:
Split Personalities; Earnings Drop Off, BroadbandWeek Direct, 10/25/00
Disconnecting
Long-distance At MCI WorldCom?, Wireless Week, 6/28/00
Broadband Is On The Fast Track
The first six months of 2000 have been good to broadband,
according to a new report from
the Federal Communications Commission.
High-speed Internet connections, including residential and business access,
has reached 4.3 million service lines (or wireless channels), a 57 percent
increase over the 2.8 million reported to the FCC at the end of 1999.
The number of high-speed hookups via cable systems accounts
for 2.2 million of the 4.3 million total, with ADSL also making a strong
showing with 1 million lines.
While the FCC report zeros in on the current high-speed
market, a new study from Jupiter Media Metrix
looks beyond 2000 and into 2005. According to the company's research, more
than 1 in 3 U.S. households will be broadband-connected within the next five
years. And as the FCC report shows, cable is ahead of DSL for the moment,
but Jupiter predicts the race will be in a dead heat by 2005. To stay
competitive, broadband service providers must begin to differentiate their
services and maintain customer retention.
Jupiter's study also revealed that price is a key factor
standing in the way of mass-consumer adoption of high-speed access
technologies, but by 2005 the company is predicting that low-end broadband
access services will be around $20 to $25 per month.
Related Stories:
It's
Splitsville For Broadband Content, BroadbandWeek Direct, 10/31/00
DSL
Is On The Rise, BroadbandWeek Direct, 7/25/00
Covad CEO Hangs It Up
The shake up is on at Covad
Communications. Head honcho Robert Knowling has handed in his
resignation, just two weeks after the broadband service provider reported a
wider-than-expected third-quarter loss. Knowling's departure is being
deemed as in the "best interest" of the company.
Frank Marshall has been named interim CEO and Charles McGinn,
a Covad founder and former CEO, will take over as chairman.
Covad shares fell slightly today to $5.16, but the real blow
was suffered after the earnings announcement when the company's stock
lost more than half its value on October 18.
Related Story:
Q3:
Monies Gained, Monies Lost, BroadbandWeek Direct, 10/18/00
Alcatel Does A Billion Dollar 360
It's been quite a week for Alcatel,
and it's only Wednesday. Yesterday, the telecommunications equipment maker
announced third quarter profits of $250 million, and today the company
unveiled a $1 billion alliance with 360networks.
360networks is building a 22,000 km undersea cable linking
Japan with the United States and Canada and under the terms of the new
agreement, Alcatel will design and install the cable. Alcatel also plans to
purchase up to $1 billion of 360networks' convertible preferred stock.
"The partnership will enable Alcatel to have a better
understanding of market trends as we develop new products and
solutions," says Serge Tchuruk, chairman and CEO of Alcatel.
Related Stories:
Alcatel Triples Profit, BroadbandWeek Direct,
10/31/00
Cox Revs In Q3
Cox Communications reports
third quarter net income of $838.1 million, or $1.37 a share, up from $11.9
million, or $.02 a share during Q3 1999. Cox president and CEO Jim Robbins
believes the company is on track to attaining 11 percent operating cash flow
growth by the end of the year.
It's high-speed access services helped push data revenues to
$41.2 million, up from $17.8 million during the same period a year ago. Cox
more than doubled the number of high-speed service subscribers to 398,816.
At the end of Q3, its digital TV subscribers totaled 683,076. Telephony
revenues for the quarter jumped to $51.7 million from $25.0 million a year
earlier due to an increase in both residential and commercial customers.
Related Stories:
Mas!
Arizona Could Help Cox Compete, Multichannel News, 10/9/00
Cox
Rocked By Investor Shock, Multichannel News, 7/31/00
Broadband Briefs:
- MeTV Network Inc.
launches a three-month consumer trial of its video-on-demand service in San
Diego. The test is scheduled to begin in January 2001, giving 250 consumers
access to MeTV's service, including streaming full-length feature films, music
videos, promotional trailers and sports programming.
- AT&T
Broadband kicks off its AT&T Broadband Choice trial in Colorado. Eight
ISPs are participating in the trial that will give 500 AT&T customers a
choice of which ISP to use for high-speed cable Internet service. The ISPs
will share customer care processes, connect to AT&T Broadband's network
and develop interfaces with AT&T to provide customer service. AT&T has
invested $20 million in the project.
- Cisco Systems
licenses Virata Corp.'s EmWeb HTTP server
and client software. Cisco believes the deal will make it easier for its
customers to configure and manage networks.
- GiantLoop Network
secures a $100 million dark fiber deal with Metromedia
Fiber Network. GiantLoop now has the resources to expand its international
network and support its Global 250 customer base. GiantLoop also announced
leasing deals with ACSI Network Technologies Inc., Fiber Technologies, Global
Metro Networks and NEES Communications Inc.
- Fujitsu
Siemens Computers incorporates Tvia Inc.'s
streaming media processor into its ACTIVY 300, a third-generation digital
set-top box.
- DSL.net appoints
Keith Markley president and COO. Former president and CEO David Struwas will
remain CEO of the company.
- Winfire Inc.
expands its FreeDSL service in Charlotte and Raleigh, N.C., Fresno, Calif. and
San Antonio, Texas. Winfire's goal is to reach a 40-market service roll-out by
year's end.
- The Adrenaline Vault will use Stream
Theory Inc.'s streaming media technology to demo interactive PC games on
its Web site, www.avault.com.
- BroadBand
Residential Inc. snags a long-term agreement with eight multi-family real
estate property owners. The alliance gives BBR preferred marketing and access
rights to 2,000 properties in 25 metropolitan areas.
|
