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Monday, July 22, 2002 |
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• WorldCom seeks Chapter 11 protection • BroadJump unveils unified activation platform • Level 3 tapped for Xbox live • Cox rolls the HDTV dice in Sin City • 802.11a chipmaker Bermai lands additional funding • Hong Kong telco shutters iTV venture WorldCom seeks Chapter 11 protection As expected, mounds of debt and a misreport of nearly $4 billion in expenses, has plunged WorldCom Inc. into a Chapter 11 bankruptcy filing. The telecom giant's bankruptcy is the largest in U.S. history. In its filing, WorldCom listed $107 billion in assets and $41 billion in debt. The Enron filing, which was the largest in US history for a short spell, pales in comparison, coming in at almost half of WorldCom's filing. The protective Chapter 11 shroud is designed to keep creditors at arm's distance and suspend dozens of lawsuits as WorldCom attempts to restructure its debts and negotiate a recovery. WorldCom says it has secured $2 billion in debtor-in-possession financing that will enable it to operate as business as usual during the proceedings. "We will use this time under reorganization to regain our financial health and focus," WorldCom President and CEO John Sidgmore said in a statement. Sidgmore said he expects to reduce debt through a debt-for-equity swap, which would give bondholders an ownership stake in the reorganized company. Although a specific date was not given for the company to emerge from Chapter 11, Sidgmore said the reorganization will last at least through the first quarter of 2003. The filing includes WorldCom and substantially all of its active US subsidiaries. Related stories:
BroadJump unveils unified activation platform Broadband activation software provider BroadJump has introduced a new software platform to address operator challenges in signing up, activating and delivering service to new broadband customers. Dubbed ControlWorks Activation Edition, the new software "superset" combines many of the features of the company's popular Virtual Truck Qualifier and Installer activation platforms, and layers on new capabilities for handling multiple ISPs and customer migration. As operators look ahead to offering open access on their networks to competitive ISPs, activation and migration issues are sure to be new challenges network operators will face in reshuffling all of their disparate back office systems. "We've brought to market solutions that help our customers really wring a lot of efficiencies out of their networks-from qualification, to activation, to migration," explains Kip McClanahan, BroadJump president and CEO. "Historically, we've talked about those as individual applications and uses with independent ROIs. What ControlWorks Activation Edition represents is the realization that a lot of those challenges exist simultaneously within our customers' networks. What we've done is bring in all of those individual use cases of our technology, and brought them to market with a single solution." BroadJump also announced the first major customer to sign on to the new ControlWorks platform-embattled UK provider NTL, which currently offers a triple play of video, circuit-switched telephony and tiered high-speed data over cable to more than 9 million homes across the UK. NTL has used BroadJump's market-leading Virtual Truck products to initiate service to more than 280,000 high-speed data customers so far, and it'll begin migration to the ControlWorks platform later this year. NTL is currently in the process of undergoing bankruptcy restructuring, the result of an aggressive acquisition spree taken on over the past couple of years. In addition to offering a retail residential broadband product, NTL has, perhaps preemptively, inked a deal to open its network and offer wholesale service to the UK's largest dial-up ISP, Freeserve, who currently count 2.4 million dial-up customers. Unlike the open access situation in the US, there are no mandates from the government of the UK to open up high-speed cable networks to rival ISPs. - Duffy Hayes Related stories:
Microsoft Corp.'s broadband-enabled gaming console is going online with a little help from Level 3 Communications Inc. Under a newly signed deal, Microsoft named Level 3 as a major provider of network services for its online gaming service, dubbed Xbox Live, in North America and Europe. Level 3 will provide Center Colocation, CrossRoads Internet access and Packet MPLS private network services. Level 3's network infrastructure was chosen for its scalability, performance and flexibility, according J. Allard, general manager of Microsoft's Xbox Platform. Financial terms were not disclosed. At its launch last fall, the Xbox gaming console came with a built-in Ethernet port for online game play, and Xbox Live is designed to take advantage of that built-in port. Microsoft first unveiled Xbox Live for its Xbox gaming console at the Electronic Entertainment Expo in May. Starting this fall, subscribers can pay $49.95 a year to play against other Xbox gamers online. The cost covers a headset and voice chat, but not broadband access. Microsoft expects to support five exclusive games at launch -- Unreal Championship; NFL 2K3; MechAssault; Whacked and NFL Fever 2003. The company plans to expand its offering to more than a dozen games by the end of 2003 and at least 50 by the end of 2003. Microsoft intends to begin its beta program in North America, but says the service will be available to Xbox owners in Europe and Japan as well. Related stories:
Cox rolls the HDTV dice in Sin City Answering the FCC's call to commit to digital television, Cox Communications Inc. is rolling out HDTV in its second city, Las Vegas. The service is now available to the more than 600,000 homes Cox passes in Las Vegas. Subscribers are required to fork over $10.15 a month to rent an HDTV digital set-top box and remote control. The cabler is offering seven channels in high definition at the onset of the launch, including the local CBS and PBS affiliates, two HBO channels to current HBO customers, two Showtime channels to current Showtime customers and Discovery High-Definition Theater. Digital cable subscribers will pay an extra $5 a month of the Discovery High-Definition Theater channel. Although Cox is remaining tight lipped right now about where it will launch its HDTV service next, the company does plan to add more markets over the next several months. In April, FCC Chairman Michael Powell outlined a new set of voluntary deadlines, calling for more digital programming this fall and more support from cable and satellite services by Jan. 1. Related story:
In an attempt to boost shareholder value, Com21 Inc. has hired Investec Inc. to evaluate its strategic and business alternatives. The company's shares traded at 33 cents just after noon EDT today. The systems provider for the broadband access market also adopted a new shareholder rights plan designed to deter takeovers. Under the plan, rights will be distributed as a dividend at the rate of one right for each share of Com21 common stock, par value $0.001 per share held by stockholders of record as of Aug. 7, 2002. The plan goes into effect, if any person or group gains control of 15 percent or more of Com21's shares The company says it did not adopt the new plan in response to a takeover attempt. Com21 lowered its second-quarter guidance earlier this month. Related stories:
802.11a chipmaker Bermai lands additional funding The concept of a national wireless "hotspot" network based on 802.11 (Wi-Fi) technology was back in the news last week, once Intel's ambitious Project Rainbow was leaked to The New York Times. And in a general sense, 802.11 chip and gear makers are today in the process of getting their ducks in a row as well. Start-up 802.11a chipmaker Bermai Inc., one of about a dozen new firms developing chipset technology for the 802.11 wireless platform, announced that it had received an additional $5 million in Series A funding, bringing its total first round funding to just over $20 million. The "up round" comes courtesy of STIC Ventures Inc., a Korean investment group backed by the country's Ministry for Information and Communications and the national Bank of Korea. Worldwide consumer electronics maker LG Electronics is a leading investor in the STIC Group, and leading Korean companies Hyundai and Samsung also contribute to the $700 million investment fund. Total Series A funding for the company now stands at $20.1 million, an impressive number for a startup company like Bermai that currently is pre-silicon and pre-revenue, for that matter. The company expects to deliver its chipset sometime in the 3Q of this year, just five or six weeks beyond the deadline promised to analysts. "We still have 65 or 70 percent of that money in the bank," says current Bermai president and CEO Bruce Sanguinetti. "An initial $12 million was used in the development of the chip, and there's a little of that left. We're at the fab now, and when the chip comes back, if it's good enough to go to market, we're off to the races." - Duffy Hayes
Hong Kong telco shutters iTV venture
HONG KONG --- Once high-flying telco Pacific Century Cyberworks (PCCW) plans to shut down its four-year-old interactive TV venture, iTV. The company, headed by Richard Li, is awaiting government approval after submitting an application last week to exit the pay TV business and surrender its video-on-demand license. Phone monopoly Hongkong Telecom, which became Cable & Wireless HKT before being acquired by PCCW two years ago, originally launched iTV. The service was meant to provide home shopping, video services and Internet access to consumers, but failed to maintain a broad base of subscribers. Staff from the iTV unit have been folded into PCCW's now.com.hk, which offers broadband content for $3.85 (HK$30) a month and has signed up 100,000 customers. "We're focusing on the network we see as a success," said Joan Wagner, a spokeswoman for PCCW. "The iTV pay TV service was always on the sidelines." Hong Kong remains a tough market for new pay TV players, with i-Cable Communications continuing to dominate.
• Comverse to trim staff The company will take an unspecified charge in the third quarter related to the reductions. Last month, Comverse posted first-quarter revenue of $211 million, down from $365 million in the year earlier period. • iPass and InfoExpress form alliance
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