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Today's report from the staff of Broadband
Week
• Terayon's Stock Tanks
• Beep, Beep! It's The Road Runner Shuffle
• Swedes Set 3G Schedule
• Broadband Briefs
Terayon's Stock Tanks Try
not to get hit by the falling debris. Terayon
Communication Systems Inc.'s stock is crumbling, down 60 percent at one
point during early morning trading. The stock price nose dived after the
once high-flying broadband networking equipment provider's announcement that
its fourth quarter 2000 loss will be greater than previously expected.
Revenues for the quarter are expected to be $60 million to
$63 million. There is a possibility the company will take a $20 million hit
due to vendor order cancellations, increasing its forecasted pro forma loss
of 46 to 49 cents a share by an additional 28 cents a share.
"We are very disappointed with these results," says
Zaki Rakib, Terayon's CEO. In light of its lackluster performance and
current market conditions, Terayon will reorganize itself around two
industry segments: "highly differentiated, high margin broadband
infrastructure equipment and high volume, lower margin customer premise
equipment," explains Rakib. The company also plans to create a separate
business focused on next-generation, DOCSIS system-on-the-chip solutions.
As of 11:25 a.m. EST, Terayon's stock was trading at $5.38,
well below its 52-week high of $142.62.
Related Stories:
Operators
Eye Security Pitfalls, Broadband Week, 9/00
Two
More To Tango, CEDaily Direct, 10/12/00
Beep, Beep! It's The Road
Runner Shuffle
Talk about killing two birds with one stone:, AT&T
Corp.'s decision to dissolve its Road
Runner joint venture enables both AT&T and Time
Warner Inc. to appease regulators. AT&T's move complies with a
consent decree between the company and the U.S.
Department of Justice in conjunction with its acquisition of cable
operator MediaOne Group. The deal also helps Time Warner Cable to offer
multiple ISPs access to its cable systems at an accelerated pace: a crucial
element of the Federal Trade Commission's approval of Time Warner's merger
with America Online.
Under the agreement, the 20 percent stake in
Road Runner held by Microsoft Corp. and Compaq will be redeemed, and
"Road Runner will distribute substantially all of its assets to Time
Warner and its affiliates, and to AT&T Broadband," according to
Time Warner. AT&T and Time Warner have entered into a "transition
service agreement" enabling AT&T Road Runner subscribers to
continue to receive service and retain their current e-mail addresses.
"The 21 regional data centers will be distributed to AT&T Broadband
or Time Warner Cable, based on which company's cable operations are the
predominant users of the facility, according to an AT&T written
statement.
The restructuring will end Road Runner's
exclusivity agreement with Time Warner, which was slated to run through the
end of 2001. Time Warner expects to incur a one-time restructuring charge of
$20 million to $40 million during the fourth quarter of 2000.
On Friday, AT&T told the Federal
Communications Commission that it would "insulate" its stake
in Time Warner Entertainment by shedding Liberty
Media Group in order to comply with conditions regulators set forth
before approving the MediaOne Group acquisition. The company also announced
plans to "take other steps needed to ensure that it will not have
attributable interests, under the FCC's rules, in providers of video
programming purchased by TWE," according to a company statement.
Related Stories:
FTC
Approves Time-AOL Combo With Conditions, BroadbandWeek Direct, 12/14/00
AT&T
Splits With Liberty, BroadbandWeek Direct, 11/16/00
On
the Run, Broadband Week, 11/00
Swedes Set 3G Schedule
The next-generation, high-speed wireless race is on, and
Sweden wants to be among the first out of the service box. The Swedish
government vows to have its third-generation network up and running within
the next three years. On Saturday, four 3G licenses were awarded, but Sweden
opted out of an auction -- forgoing a big pay off like Germany's $46 billion
back in August -- in order to focus its efforts on service rollouts and
broader coverage areas.
The National Post and Telecom Agency (PTS) said Sweden's goal
is to give 99.9 percent of Swedes access to 3G by the end of 2003.
The license winners, which include Tele2,
Europolitan, Orange Sweden and Hi3G,
say they are committed to spending nearly $8 billion over the next three
years to build a national high-speed network.
The surprising license loser was Telia,
a telecom operator with 52 percent of Sweden's current mobile phone market
share. Telia's application was rejected on the grounds of technical
feasibility, according to the Financial Times. The PTS doubted Telia
could deliver what it was promising.
Related Stories:
HK
Seeks Hybrid 3G Auction, BroadbandWeek Direct, 10/4/00
3G
Wins Big In Germany, BroadbandWeek Direct, 8/18/00
Broadband Briefs:
- VitalLink Business Systems extends
the reach of its VitalLink Business Network into Los Angeles, New York,
Dallas, Chicago and San Francisco through a new deal with Covad
Communications.
- Corning Inc. selects Oklahoma City as
the home for its new optical fiber manufacturing facility. Initial production
at the plant is expected to begin in 2004.
- Motorola begins shipping its
CompactPCI-based CPX8216 platform to Jetstream
Communications. The platform serves as the foundation of Jetstream's voice
over DSL services.
- First Capital International Inc. jumps
into the Voice over IP and cable Internet service providing business in
Estonia through a deal with a local cable TV operator there. First Capital
plans to provide its services to more than 12,000 subscribers through its
subsidiary Anet Eesti.
- Nortel Networks inks deals with
both Sierra Wireless and Xircom
to independently develop a third-generation wireless modem based on the
Universal Mobile Telecommunications System standard. Market trials are slated
for 2002.
- OpenTV extends its interactive
television services in Germany. Stephane Goebel joints OpenTV Germany to lead
the charge.
- 2Wire Inc. unveils ICS2000, a DSL voice
and data networking solution for homes, home offices and small businesses.
- Pagoo Inc. and Oblivion
Technologies team to deliver voice over broadband services to Oblivion
subscribers.
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