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Today's report from Web Editor
Susan Rush
• Excite@Home Nixes Excite Chello Plans
• 3Com Takes A Hit On Wall Street
• AT&T Inks China Broadband Deal
• Chip Sales Reach $18.6B
• Broadband Briefs
Excite@Home Nixes Excite Chello Plans Ding-dong,
Excite Chello is dead. On of the proposed company's parents-to-be, United
Pan-Europe Communications NV, is taking it on the chin today on Wall
Street, the company stock dropped nearly 16 percent to $9.69 as of 10:52
a.m. EST.
After talks broke down late yesterday, Excite@Home
Corp. terminated its pending deal with UPC to create a new broadband
company, Excite Chello. The companies were unable to come to terms with new
conditions set forth by UPC due to changing "market
conditions."
The proposed merger, announced in July, would have combined
Chello Broadband NV, a UPC company, and Excite@Home's international
operations, creating a high-speed Internet-service provider with 300,000
subscribers in 15 countries. Excite@Home is able to opt out of the merger
without incurring any expense, since the two could not agree on certain
aspects of the deal. According to Excite@Home, the deal was no longer in the
best interest of the company. "The complexity of the proposed Excite
Chello venture, including the involvement of multiple shareholders with
differing opinions and interests, would pose a risk to swift execution of
Excite@Home's international strategy," the company said in a statement.
When it all boils down, once the parties sat down to hammer
out the details, they realized they had less in common than they had
thought, said an unnamed UPC source.
With competition heating up in the United States and open
access issues coming to a head, Excite@Home needs to focus on that
market. "It
is important for companies like Excite@Home to become active on the
international level, but at this stage, it is more important for them to
figure out how to stay competitive in the United States, the major
residential broadband market," says Keith Kennebeck, a Strategis
Group analyst.
In light of Excite@Home's decision to pull out of the deal,
United Pan-Europe now plans to combine Chello with its television and
programming division UPC Media.
Excite@Home's shares fell another 3 cents during early
morning trading to $5.84 -- late yesterday, its share price dropped 31
cents.
Related Stories:
Chello,
Excite@Home Seek Strength in Numbers, Multichannel News, 7/24/00
Chello,
Excite@Home Merge Int'l Ops, Multichannel News, 7/18/00
3Com Takes A Hit On Wall
Street
3Com Corp.
watches its shares plummet on Wall Street today following a profit-warning
announcement. The network equipment maker's share price dropped 29 percent
to $9.47 during morning trading, well off its 52-week high of $119.75.
3Com is predicting second-quarter revenue of
$785 million to $800 million, down from the company's previously forecast
$870 million to $910 million. The company blames the decline on slower sales
of equipment--including DSL gear--to telecommunications carriers and ISPs.
The pro-forma net loss per share is expected to widen to 19 cents to 23
cents, compared to previous predictions of 7 cents to 9 cents a share.
Final numbers for the fiscal 2001 second quarter
are due out on December 21, after the market closes.
Related Story:
3Com
Posts Minimal Loss, BroadbandWeek Direct, 9/27/00
AT&T Inks China Broadband Deal
AT&T Corp. wins
approval to launch broadband IP services to business customers in Mainland
China through a joint venture with Shanghai Telecom and Shanghai Information
Investment Inc. The telecommunications giant becomes the first foreign
company allowed to participate in a telecommunications joint venture since
China open the sector under the World Trade Organization rules.
AT&T will own a 25 percent stake in
the newly formed broadband service provider, Shanghai Symphony
Telecommunications. STC will own 65 percent and SII will own the remaining
15 percent. Although the companies would not confirm the dollar amount of
the investment, the China Daily newspaper valued the deal at $25
million.
Services are expected to be launched to business
customers in the Pudong New Area, Shanghai beginning in mid-2001.
Related Stories:
AT&T:
Split Personalities; Earnings Drop Off, Broadband Week Direct, 10/2500
ChinaCast
Co. Will Beam Web Sites, BroadbandWeek Direct, 8/7/00
Chip Sales Reach $18.6B
The semiconductor industry posts another record
month of sales, but the rate of sales continues to drop from month to month.
Worldwide chip sales for the month of October reached $18.66 billion, a 39.4
percent increase over numbers posted a year ago, according to the Semiconductor
Industry Association.
The increase in sales has declined slowing over
the past months: a 45 percent growth was reported in September, while August
enjoyed a 53 percent growth rate. Although the industry remains strong,
these numbers are pointing to a possible slowdown for the industry at large.
The Japanese market saw the greatest amount of
growth, at 47 percent, followed by the Americas at 41.3 percent, the
Asia/Pacific market at 35.2 percent and the European market at 33.2 percent.
SIA remains confident that the industry will
exceed $200 billion in worldwide sales by the end of the year.
Related Stories:
Chip
Market Tops $200B, Broadband Week Direct, 11/200
Chip
Sales Jump 53%, BroadbandWeek Direct, 10/3/00
Broadband Briefs:
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The Federal Trade Commission is
expected to vote on the proposed America Online-Time
Warner merger by the middle of next week, according to the Wall Street
Journal. The paper also reports that software giant Microsoft
Corp. is raising questions with regulators about the effect of the merger
would have on the high-speed access market, it is too early to tell whether
Microsoft's comments will effect the final outcome of the FTC's ruling.
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Sprint launches its
fixed-wireless Internet service, Sprint Broadband Direct, to residential and
small business customers in Wichita and Salt Lake City.
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TVGateway will deploy its
interactive program guide to digital cable subscribers served by MetroCast
Cablevision in Belmont, N.H. beginning in January. MetroCast is currently
upgrading its systems and hopes to be offering digital cable services to all of
its 35,000 subscribers throughout New Hampshire.
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PAR Electrical Contractors, a Quanta Services Inc. subsidiary,
teams with Everest Connections Corp. to
install a broadband communications network in the greater Tulsa area. The three
to five-year contract is valued at $100 million.
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CATAVAULT's All Access
Pass is now available to Road Runner
Central Florida's subscribers. The access pass to the Internet remembers
customers' user names and passwords for more than 2,400 Web sites, ranging from
Amazon.com to ZainyBrainy.com.
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XO Communications Inc. completes
its Boston field tests of its fixed wireless equipment. Triton
Network Systems signs on a non-exclusive provider of XO's broadband
point-to-consecutive point fixed wireless equipment for XO in the United States.
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InfoHighway Communications
Corp. will deploy Turnstone Systems'
Copper CrossConnect XC100 as the local loop management platform for its DSL
services.
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Linksys unveils its first
broadband modem, the Instant Access Broadband USB ADSL modem.
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