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Monday, July 8, 2002 |
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• C-Cor.net to build
out int’l biz with • Comcast tabs WorldGate in Alabama • The Eagle soars at General Dynamics • Universe2U launches VoIP biz • WorldCom execs on the hot seat C-Cor.net to build out int’l biz
with Veteran broadband equipment and service supplier C-Cor.net announced Monday that it will widen its international scope by about threefold via a $78 million deal to snap-up Philips Broadband Networks (PBN). The deal, expected to close by the second half of this year, will add about $100 million in annual accretive revenue, C-Cor.net Chairman and CEO David Woodle said the addition of PBN will allow C-Cor.net to triple its international business. PBN is a division of consumer electronics giant Royal Philips Electronics. Woodle said some PBN products are complementary to C-Cor.net’s, but expects that combining the two companies will enable C-Cor.net to build optical and RF systems faster than it could on its own. PBN makes both optical and RF (radio frequency) transmission equipment for cable operators, including nodes, network amplifiers, line extenders and network “optimizing” technologies such as dense wave division multiplexing (DWDM). About half of the division’s business comes from U.S. operators, with the rest largely spread across Europe, including France and Spain, and the Asia Pacific Region. PBN employs roughly 500 people, supports sales and service organizations in 12 countries, and operates a design and production facility in Manlius, N.Y. The deal will essentially end Philips’ foray into the transmission side of the cable broadband sector. Though Philips’ PBN unit has developed some domestic cable business, the consumer electronics division of Philips has not had as much success selling digital set-tops to US MSOs, and has pulled back its efforts there, including a deal with AT&T Broadband to deliver 1 million advanced boxes. Woodle said C-Cor.net and PBN expect to complete most of the integration of the two companies before the end of 2002. During that time, Woodle said his company will determine which PBN products add to C-Cor.net’s portfolio and which ones potentially overlap existing C-Cor.net products. -Jeff Baumgartner Related stories:
Comcast tabs WorldGate in Alabama Comcast Cable Communications Inc. is looking to beef up its digital cable portfolio in Alabama, and is turning to WorldGate Communications Inc. to make it happen. The MSO will deploy WorldGate's interactive television service to its customers in Huntsville and Tuscaloosa, Ala. The service, which will be marketed as part of Comcast Digital Cable, offers subscribers a variety of content, including dynamically updated weather forecasts, horoscopes, recipes, stock quotes, news, entertainment links and sports scores. Deployment is expected to be complete during the third quarter. "The implementation of interactive services is an important part of Comcast's long-term strategy to help build a strong customer base for digital cable services," said Mark Hess, Comcast's vice president of Digital Television. In May, WorldGate posted first quarter revenue of $3.2 million, a 22 percent drop from the $4.1 million reported in the first quarter 2001. Reduced equipment sales fueled the drop, said WorldGate. The company's quarterly net loss was $4.2 million, or 18 cents a share. Analysts on average were expecting a loss of 24 cents a share, according to Thomson Financial/First Call. Related stories:
The Eagle soars at General Dynamics Less than two months after introducing its Media Pro advanced set-top box, Eagle Broadband Inc. has lassoed its first customer: General Dynamics Interactive. Eagle unveiled the set-top in May. The box, which is Eagle's smallest and affordable model to date, offers access to the Internet at high-speed, e-mail correspondence and an MPEG-2 hardware decoder. Although financial terms of the deal were not disclosed, the companies say that the agreement is part of the cooperative business agreement they signed last month. Eagle's etoolz subsidiary has completed the customization of the Media Pro for General Dynamics Interactive's Intrigue Multimedia System, an all-digital information and entertainment system designed to deliver high-speed Internet access, video-on-demand, games and music. As part of the agreement, Eagle will oversee the installation of fiber and copper cable in selected General Dynamics hotel projects in the United States. Eagle also will supply structured wiring for the hotel deployment of Intrigue. The first installations are slated to begin in the next eight weeks. Eagle is marketing the box to the hospitality, corporate, municipal and residential markets. General Dynamics Interactive is a General Dynamics Communication Systems' business. Related story:
Universe2U Inc. continues to zero in on the enterprise networking service market, with the introduction of a voice over IP retail service designed for business. The voice2u service enables businesses to combine voice, fax and data traffic on a single integrated IP connection. A voice2u gateway prioritizes voice traffic with QoS and uses the public switched telecommunications network as an automatic backup. Digital voice and fax signals are converted from a customer's existing PBX into IP packets and are then transported via the Internet. The company believes business clients will embrace its product because it offers savings on long-distance bills. The company, for example, expects to provide a service that will enable companies to call their voice2u-enabled branch offices located around the world for 2.5 cents per minute. The company also is marketing the service to the hospitality industry. Last week, U2U secured $500,000 in convertible debt/warrant financing, which is the first installment of a $1.5 million funding commitment. "Our arrangement commits us to a tight use of proceeds schedule to ensure the investment is targeted at our growth, including launching voice2u, our voice over IP product and expanding our wireless network," said Kim Allen, CEO, at the time of the funding announcement.
Even as the Securities and Exchange Commission noses around Qwest Communications International Inc., the telecom has named a new chief financial officer and has reorganized its operations. Qwest named former Ameritech CFO Oren Shaffer vice chairman and CFO. He has replaced the current CFO Robin Szeliga, who will remain on board at Qwest as a vice president tasked with assisting in Qwest's debt reduction plans. Shaffer is one of the first to join Richard Notebaert's management team. Notebaert replaced Joseph Nacchio as Qwest's head honcho three weeks ago. Shaffer worked under Notebaert at Ameritech. In conjunction with Shaffer's hiring, Qwest announced some reorganization changes designed to focus the business on consumers, businesses and wholesale customers. As part of the plan, Qwest's residential, wireless, cable and video businesses have been folded into the consumer market group. Annette Jacobs will spearhead the group. To form the business group, Qwest has combined its national business accounts and global business accounts. Chifford Holtz will run the unit. Gordon Martin will continue in his role as head of Qwest's wholesale sector. On Friday, Qwest denied a Wall Street Journal report that it was being investigated by the US Department of Justice. "We have no reason to believe that we are the subject of any investigation by the US Department of Justice," Qwest Executive Vice President and General Counsel Drake Tempest said in a statement. He said the company is cooperating fully with the SEC and Congress. Related stories:
WorldCom execs on the hot seat;
Copyright 2002 P.G. Publishing Co. Marilyn Geewas, Cox News Service The scene seems all too familiar now: tense former executives sitting stiffly side-by-side, waiting for congressmen to hurl harsh words and photographers to snap pictures as they testify. But even after dozens of hearings into financial scandals this year, today's testimony before the House Financial Services Committee could prove extraordinary, providing new details into what may be the single biggest case of accounting fraud in history. Bernard Ebbers, former chief executive officer of WorldCom Inc., will be asked to explain what he knew about the telecommunications giant's efforts to disguise more than $3.8 billion in expenses during 2001 and part of 2002. The committee has subpoenaed Ebbers, along with two other top executives, Scott Sullivan, former chief financial officer, and David Myers, former controller. Neither one has declared whether he will exercise his constitutional right to silence. If they do clam up, as did most Enron Corp. officials when asked about their accounting scandal, other WorldCom executives promise to tell what they know. WorldCom's new CEO John Sidgmore and board chairman Bert Roberts plan to testify, committee spokeswoman Peggy Peterson said yesterday. She said the panel also expects cooperation from Melvin Dick, a former senior managing partner, from Arthur Andersen, the accounting firm that audited WorldCom's books during the period when billions in expenses were being hidden from shareholders. Peterson said the committee will grill Jack Grubman, the telecommunications analyst for the Wall Street firm of Salomon Smith Barney Inc. Grubman continually urged investors to buy WorldCom stock, even as share prices were plunging. His critics say he was so close to WorldCom that he either knew, or should have known, that the company was deceiving its shareholders. Two key figures who won't be at the hearing are Cynthia Cooper, the internal auditor who uncovered WorldCom's accounting irregularities, and Max Bobbit, who chairs the company's audit committee. Lawmakers decided not to seek their testimony, fearing it might compromise other government investigations. The Securities and Exchange Commission already has sued WorldCom for fraud. The commission, the Justice Department and congressional investigators are digging into the accounting scandal that so far has led to about 17,000 layoffs at WorldCom and the near-complete collapse of the company's stock. Appearing on "Fox News Sunday," House Financial Services Chairman Michael Oxley, R-Ohio, said he believes today's hearing is likely to reveal that WorldCom executives were "cooking the books ... to basically hide what was a failing business" within the battered telecom industry. Oxley said that despite the scandals that have flattened once-powerful companies such as Enron, WorldCom, Global Crossing Ltd., Tyco International Ltd. and others, he does not believe corruption is rampant in corporate America. "I think it comes in cycles," and this happens to be one of those periods, he said. "I don't think it's as widespread, perhaps, as some people would believe, but clearly there's some real problems here." Oxley is the chief sponsor of an accounting reform bill passed in April by the GOP-led House. This week, the Democratic-controlled Senate is expected to pass a much tougher version. If the Senate approves the legislation, a conference committee of House and Senate negotiators would have to craft a compromise to win final passage. On ABC's "This Week," Sen. Paul Sarbanes, D-Md., said he will fight attempts in such a conference committee to water down the Senate accounting reform bill, which he chiefly wrote. "We'll be working very hard to make sure that it doesn't happen," he said. But Oxley said that in a conference committee, he would be trying to ensure that Congress does not institute too many new regulations. Related stories:
• Level 3 raises $500 million Longleaf Partners Funds, Berkshire Hathaway Inc. and Legg Mason Inc. have agreed to purchase a 9 percent convertible bond due 2012 from Level 3 Communications Inc.. The deal, which is valued at $500 million, will enable Level 3 to pursue possible acquisitions of some of its rivals. The company also will use the funds for general corporate purposes, capital expenditures and working capital.
JacobsRimell has been awarded a U.K. patent for its automated provisioning technology. The provisioning technology is the basis for JacobsRimell's software products, which are designed for companies offering interactive digital television, broadband Internet access, 2.5G and 3G wireless services, interactive gaming and web hosting. Cable & Wireless, NTL and Telestra are among JacobsRimell's customers.
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