FROM MONDAY 5 TO MONDAY 12 MARCH 2001

Optus to be sold
Alcatel launches Cyprus' DSL service
US to increase deregulation
Nokia in 3G win
Vivendi finalises AOL sale
Tandberg rose 3%
News Corp sceptics hit share

Optus to be sold

There are signs that the long-running sale of Cable & Wireless Optus could be over before the end of the month with Singapore Telecom emerging as the odds-on favourite - although Vodafone insists it is still in the running.

Optus will call for further bids from interested parties on Friday (March 9), but media reports in Sydney suggest that Optus shareholders have already decided that it is in their best interests and those of the staff to sell to the Singaporeans.

Australian regulators have already questioned if Vodafone's bid is anti-competitive since it involves the merging of its mobile operations with those of Optus. Time is running out for Vodafone to pass this regulatory hurdle as the Australian Competition and Consumer Commission said it needs another three weeks to assess its bid for Optus.

The other bidder, Telecom New Zealand, is felt to be a long way behind SingTel and Vodafone. The Singaporeans, cash-rich after their government paid them to end their domestic services monopoly in 1999, three years ahead of schedule, are thought to be close to agreeing Cable & Wireless $4 billion pricetag for Optus.

Cable & Wireless, which owns 52.5 per cent of Optus, has quietly abandoned its earlier desire to hold onto the company's data operation. Questions remain over the fate of the consumer division, which includes the cable TV operation that now has 225,000 subscribers.

Alcatel launches Cyprus' DSL service

Alcatel announced yesterday (March 5) that it will supply CYTA, Cyprus' national telecommunications service provider, with 5000 asymmetrical digital subscriber line (ADSL) lines and 2600 Speed TouchTM USB modems, 2300 Speed TouchTM Home modems and 100 Speed TouchTM Pro ADSL routers.

ADSL lines will terminate on the industry leading 7300 ASAM DSL Access Multiplexer (DSLAM) with points of presence in 30 different locations across Cyprus.

"Alcatel's asymmetric DSL (ADSL) technology was closely examined alongside a lot of competitor equipment, and underwent rigorous examination during the trial phase," commented Nicos.M.Timotheou, General Manager of CYTA.

"Alcatel passed every test in every element of the proposed solution, most notably in terms of interoperability. We were impressed not only by the performance and resilience of the equipment, but by the spirit of cooperation and openness that Alcatel brought to bear throughout the testing."

US to increase deregulation

At the end of talks between the United States and Japan on Friday (March 2), the US called on Japan to increase deregulation of its telecoms market, and for the establishment of a regulator to facilitate fair competition in the broadband market.

Former state monopoly telco Nippon Telegraph and Telephone Corp's (NTT) dominance is seen as stifling competition and shutting out both domestic and overseas competitors.

The US suggests Japan establish a regulatory body that is independent of the Ministry of Public Management, Home Affairs, Posts and Telecommunications (MPHPT).

A US official was reported as saying, "The domination of the monopoly carrier can dominate broadband, or it can be an opportunity for new types of carrier services. We are deeply concerned, the possibility of NTT dominating DSL is bad for consumers. Unfortunately, the ministry (MPHPT) does not appear to be actively involved in checking retail prices."

Nokia in 3G win

Finnish telecom equipment group Nokia has won a third-generation (3G) system deal for mobile Internet services from Austrian operator ONE, for an undisclosed sum.

Nokia's rival, Swedish Ericsson, will share the mobile telephony infrastructure deal with Nokia.

Vivendi finalises AOL sale

Vivendi Universal head Jean-Marie Messier said on Thursday (1/3/01) that the firm's planned sale of its stake in AOL France could take place in the next few days or even hours and generate a "significant" capital gain. He added "The finalisation of the accord by lawyers is in its final stages."

Vivendi and subsidiary Canal Plus own 55 per cent in AOL France.

Tandberg rose 3%

Norwegian video conference company Tandberg rose three per cent on Friday (March 2) following news that US rival Polycom did not issue a profit warning at a conference for investors.

News Corp sceptics hit share

News Corp shares fell five per cent after doubts were raised by bankers over the company's plans to buy General Motor Corp's unit, Hughes Electronics Corp, to win US satellite delivery its DirecTV to add to Sky's plans for a global satellite system.

According to a report on CNBC's website, "In the last few days, GM's bankers have been contacting companies which were previously interested in buying Hughes'' to see if any of them are still interested in pursuing a purchase.

Newspaper reports in December said that companies such as Viacom Inc and Comcast Corp were holding talks with Hughes Electronic about a possible purchase.

General Motors has said several times its was in talks with more than one party and that a deal was not close to settlement. News Corp insists it is still in due diligence with General Motors and its Hughes Electronics Corp.

If News Corp's Sky Global Networks satellite business was merged into Hughes, creating an independent, publicly traded company, it would be valued at about $70 billion and shareholders of Hughes would own roughly 64 per cent of the company. This is still the best deal that Hughes has been offered, and while it is not as much as shareholders would like, it appears that News Corp does not want to pay a premium, despite the value of the deal to its future plans, because it canØt see any serious rivals. It in turn has said it is talking to EchoStar as an alternative source of US satellite capacity, but this is also thought unlikely to happen.

On Friday (2/3/01), News Corp said it may issue 12 million preferred shares valued at $94.6 million as part of an option it could exercise on a Taiwanese cable TV systems venture announced in October last year.

Verizon selects Deutsch
TyCom buys back stock
Ufa Sports - Sport+ merger?
Polsat in deal with OpenTV
Media back in Chechnyan
Sony goes interactive
eMarketer's forecasts
Modem Media's cut
Mediaplex offers geo-targeting
Thomson buys Carlton
Sky Perfect slow growth
UPC buys into Romania
Eutelsat launches boosts IP
Bertelsmann's RTL purchase
ProSieben's Eastern expansion
Vivendi outlines strategy

Verizon selects Deutsch

New York based Deutsch has been awarded a '$30-50 million' contract by Verizon Information Services to handle general advertising, direct and interactive marketing for SuperPages brand yellow pages and SuperPages.com.

Deutsch will work in partnership with ethnic marketing specialist Casanova Pendrill Publicidad, Inc of Irving, Texas. Deutsch nudged out finalists Temerlin McClain, also Irving; The Richards Group, Dallas; and Tierney Communications, Philadelphia, following a three-month review for the Texas-based former GTE division.

TyCom buys back stock

TyCom Ltd, a US supplier of undersea fibre-optic cable networks and services, plans to buy back up to $500 million of its stock, which was down $2, at $16.40, before it issued the statement.

TyCom is a unit of diversified manufacturing and service company Tyco International and has 520.4 million shares outstanding. Pembroke, Bermuda-based TyCom said its backlog is higher than expected and it remains comfortable with earnings estimates for fiscal 2001.

Earlier this week, the company signed $1.25 billion deal with India's DishnetDSL Ltd. to build an undersea fibre optic network between India and Guam that will connect to the United States providing broadband communications.

Ufa Sports - Sport+ merger?

A possible merger of UFA Sports, controlled 100 per cent by RTL Group, and Sport +, controlled 100 per cent by Canal Plus, is rumoured in the French press following an interview by Didier Bellens, Administrator of RTL Group, controlled 67 per cent by Bertelsmann.

Interviewed by Les Echos, he confirmed that discussions were under way between the two groups along the lines suggested by Pierre Lescure last May, on cooperation between the two groups on sports rights, TV production and films. UFA Sport and Sport + make comparable sales of some billion francs annually with profits of over 100 million francs per year.

Sport + is the sports rights acquisition agency of Canal Plus. The rights it holds include the English football (soccer) league and rights for various Italian clubs. UFA Sport handles rights for the majority of German and East European football clubs. If the two companies were to merge the problem would remain of which of the parent groups would head the merged company.

Polsat in deal with OpenTV

Polish TV network Telewizja Polsat has signed an agreement with interactive TV company OpenTV to launch interactive TV services. "The OpenTV platform is proven and working all over the world - solid proof that it can support the kind of interactive TV service we intend to launch. This technology will allow us to be the first digital platform in Poland to launch interactive services," said Dominik Libicki, director of Polsat.

Warsaw-based Polsat, which has a market share of 30 per cent, intends to build a range of applications including TV-based home-banking and insurance services, interactive sports broadcasting, news, and games.

Early this year Polsat launched a digital satellite set top box equipped with a browser to allow viewers to surf the Internet.

Media back in Chechnyan

Russian national TV and radio channels restarted broadcasting in the Chechnyan plain on Sunday (March 4). They are broadcasting Radio Russia and the RTR TV channel over a 40-50 kilometres radius.

Sony goes interactive

Japanese giant Sony Corp plans to seek its own fortune in interactive TV, pulling out of a joint venture with three of its biggest rivals. The move halting investment in a company set up last year with Matsushita Electric Industrial Co Ltd, Toshiba Corp and Hitachi Ltd is the first move as the firms battle for position in next-generation television.

"We have decided to go it alone because we found differences in ways of providing services," a Sony spokesman said. The company planned to stick to the standard platforms adopted by the joint venture ePF Network, which is spearheaded by Matsushita and Toshiba, both of which hold a 25 per cent stake in the venture.

eMarketer's forecasts

New York-based Internet statistics firm eMarketer cited widely disparate estimates regarding mobile advertising spending, in its eWireless Report. Forecasted US m-advertising revenues for 2005 ranged from Yankee Group's $6.1 billion via Ovum's $4.2 billion to Forrester Research's $890 million.

The number of world-wide mobile Internet users reached about 95 million in 2000, with 80 per cent located in the Asia/Pacific Rim and North American regions.

Modem Media's cut

Modem Media of the US is to cut ten per cent of its workforce and close the company's Tokyo, office.

"While performance in our Tokyo office had been improving recently, that improvement and the prospects for the business were insufficient to keep the office open," said Modem Media CEO, Marc Particelli.

Modem Media expects to take a one-time, pre-tax charge of $3 million in the first quarter of 2001 and reduce its ongoing operating expenses by $5 million in 2001.

Mediaplex offers geo-targeting

Mediaplex, a US digital technology messaging company, now offers city-based geo-targeting, enabling advertisers to send individualised messages to Web site visitors based on the city from which they access the Net.

The technology was provided by Mediaplex's partner RealMapping, an Amsterdam-based geo-targeting firm with a database of more than four billion global IP addresses.

Thomson buys Carlton

European Union Competition authorities have approved the sale of Carlton Communications Plc Technicolor unit to France's Thomson Multimedia, for $1.35 billion in cash.

Thomson Multimedia will also give Carlton a 5.5 per cent stake in its operations to acquire the famous Hollywood name, which now produces and distributes videos and DVDs for studios.

Sky Perfect slow growth

Japan's private satellite TV broadcaster, Sky Perfect Communications Inc, reported slow subscriber growth accounting for slightly more than six per cent of Japanese households, while cancellations jumped.

The slowing subscriptions, 0.6 per cent compared with 4.2 per cent growth a year-ago, followed the launch of a rival service by the country's public broadcaster which began transmission on December 1 last year. "The number of new subscribers is increasing steady, but cancellations are eating up the growth, which may continue until March or April," a company spokesman said.

UPC buys into Romania

United Pan-Europe Communications NV (UPC) is acquiring around seven local cable companies in Romania, including Cluj-based Seltron.

UPC Romania marketing manager Raluca Milin was reported on a local web site as saying that the merger is to be ready in about three months, when a local UPC subsidiary is also going to be set up.

"So far UPC has only been present in Romania through other companies, including a cable firm in Timisoara called Analog," Milin told the website BBW. "But we'll establish officially as UPC Romania only when the merger is ready."

She added, "UPC has different standards and a whole range of other services, including digital TV but for the moment we have to stick to cable TV here. Maybe at some point we'll introduce these services as well, but not for the moment."

Cluj-based Seltron is also among the companies merging into UPC, according to its general manager Mircea Ilea. Seltron has around 75,000 subscribers and 154 employees, and is active in Reghin, Blaj, Orastie and Vulcani with branches in the southern part of the country including Lupeni, Caracal, Corabia and Bals.

Eutelsat launches boosts IP

At an evening reception in London following the Financial Times Media Conference yesterday (Monday 5th March) Giuliano Berretta, CEO of Eutelsat commented that the company's Internet traffic worth E585 million in 2000 was a 45 per cent increase over the previous year, and was set to rise still further with the company launching its e-BIRD in the second quarter of 2002, optimised for IP.

Eutelsat signed a contract at its Paris headquarters with Boeing Satellite Systems Inc (BSS) for the e-BIRD which will be positioned in geostationary orbit at 25.5 degrees East to provide 20 active Ku-band transponders connected to four spot beams over the European region. Contracted service life of 10 years and is a spin-stabilised Boeing 376 HP.

"It means we are entering our new status as a private company on July 2 this year in excellent shape," comments Berretta.

Eutelsat is securing capacity on seven new satellites, of which the first, EUROBIRD, is due for launch by Arianespace on an Ariane 5 rocket on March 8. "As a result of a frequency sharing agreement, Eurobird will be more or less copositioned with the Astra 2 family of broadcasting satellites," adds Berretta.

Also due for launch this year are ATLANTIC BIRD 1 and 2 which will enable Eutelsat to provide a satellite infrastructure connecting North and South America with Europe and Africa.

Bertelsmann's RTL purchase

Thomas Middelhoff, Bertelsmann's Chief Executive, told FT reporters that the group would acquire a 30 per cent holding in RTL Group, the pan-European television and radio broadcaster, from Groupe Bruxelles Lambert (GBL), an investment company. This will give it a 67 per cent stake in RTL.

The report says that GBL is to get a 25.1 per cent share in Bertelsmann, which it can bring, in part or whole, to the Frankfurt stock exchange within four years.

Middelhoff said, "The initial public offering could give us more flexibility, make us more public-oriented and transparent."

Kirch Gruppe is also said to be considering a partial public offering of its film rights and television business, Kirch Media. The acquisition currency of publicly quoted companies appears to be encouraging companies to come to market.

ProSieben's Eastern expansion

Urs Rohner, Chief Executive of ProSiebenSat.1 Media, on Monday (March 5) said the German broadcaster was looking to expand its operations into Poland, the Czech Republic, Hungary and Russia, rather than into western Europe, with the UK, Spain, France and Italy the least favoured locations for expansion, offering less growth potential, fiercer competition and higher costs.

Rohner also emphasised that he believed companies should first be strong in their home market before seeking overseas development, but that consolidation where there was true synergy would create new revenues and cost savings.

Vivendi outlines strategy

Jean Marie Le Messier, CEO of Vivendi Universal told delegates at the Financial Times Media Conference in London yesterday (5/3/01) that the company had achieved the size and global reach to be able to do "any kind of deal we need to deliver entertainment and education to any device, anytime, anywhere."

Messier emphasised that leveraging the company's library would be an important revenue source in the future, along with localisation and personalisation of services.

"The PC centred world is dead," declared Messier, adding that interactive TV is still underestimated vis a vis the consumer. He also emphasised the importance of strategic partnerships in 'soft deals' to obtain privileged access to customer bases, citing the Vodaphone deal for UMTS as an example. But he did not rule out further acquisitions, including into the US content market, with his own company developing the skills of aggregation and packaging.

Regarding Napster, Messier suggested that the need to control piracy via encryption would actually make net delivery more secure than CD's and in future the net could become the first delivery channel for new music releases, with the ability to control the number of copies made, and CDs would be released later rather than first.

Another key advantage Messier cited for Vivendi Universal was its commitment to cultural diversity, which was unlike the demand for global conformity made by the US.

Australian spectrum auction fails
Telenor expands into Sweden
Turnstone joins Alcatel's program
Gemfire gets $63m funding
Viacom's CFO quits
Telewest reaches 500,000 subscribers
Ulster TV buys radio stake
Scopus wins Mexican contract
News Corp-SBS in jv
Convergys mergers with Geneva
Callahan's expansion plans

Australian spectrum auction fails

Australia's shadow minister for communications has claimed that the government had effectively admitted the failure of the Howard Government's forthcoming datacasting spectrum auctions.

Stephen Smith said that in the Senate's Question time, Communications Minister Richard Alston admitted that three of the seven original bidders had dropped out of the forthcoming datacasting auction - as reported by advanced-television.com last week.

Smith added, "Further, Senator Alston effectively admitted that, because Telstra and NTL are the only two national bidders, there would be no competition for datacasting spectrum in several areas of Australia," highlighting the third-largest city Brisbane, Adelaide, the capital Canberra and the Northern Territories' capital Darwin.

"Only in Melbourne, Sydney and Perth is a competitive auction possible, assuming all of the bidders continue to remain in the auction. Bidders can pull out of the auction with a minimal financial penalty. More disturbing is that the two principal bidders, Telstra and NTL, are carriers rather than content providers."

Referring to News Ltd's refusal to bid, and John Fairfax's refusal to proceed with the bidding process Smith added, "Contrary to Senators Alston's claims, major content providers have shunned the auction. News Limited never entered the bidding, while major content provider, John Fairfax Limited, pulled out recently. The Howard Government's policy on datacasting is a manifest failure," Smith added.

Turnstone joins Alcatel's program

At the Global TMN and OSS Summit in Miami, French Alcatel announced that Turnstone Systems Inc, a provider of hardware and software products specialised in xDSL (digital subscriber line) loop management, has joined Alcatel's Connected Partner Program.

The move aims to integrate Turnstone's technology with Alcatel's network and services management suite, enabling service providers to automate many of the processes involved in delivering DSL, reducing overall deployment and maintenance costs.

Turnstone Systems Inc develops loop management solutions that enable local exchange carriers to deploy and maintain DSL services so service providers can automate many operational tasks related to installation, qualification and maintenance of copper telephone lines for DSL service.

Rick Tinsley, President and CEO of Turnstone Systems said, "Combining Turnstone's technology with Alcatel's powerful network and service management tools brings to market pre-certified interoperable capabilities that will accelerate a service provider's time to market."

Gemfire gets $63m funding

Start-up fibre-optic component parts maker Gemfire has completed a $63 million round of funding with investors that include Cisco Systems and Corning, and intends to integrate the functions of several parts of its components.

Gemfire has raised a total of $85 million, taking into account earlier backing from Kleiner Perkins Caufield & Byers, Mohr Davidow Ventures, Spring Creek Partners and Hook Partners.

The company also plans to introduce samples of two of its products and expects to tout them more broadly at the upcoming OFC 2001 conference in Anaheim, California, later this month (March).

Viacom's CFO quits

Frederic Reynolds is to step down as Chief Financial Officer of Viacom, the US media company, less than a year after the merger with CBS that brought him to the US media group.

A former PepsiCo executive, Reynolds was brought to the former Westinghouse Electric in 1994 by Michael Jordan, another former Pepsi executive.

Reynolds later helped to engineer Westinghouse's acquisition of CBS and its subsequent sale to Viacom.

Telewest reaches 500,000 subscribers

At the FT New Media & Broadcasting conference in London on Monday, Adam Singer, Chief Executive of UK cableco Telewest Communications Plc, announced that the company is on track to reach its target of 500,000 digital television subscribers by the end of March.

Last month, Telewest named US electronics firm Scientific-Atlanta as a second supplier of digital set-top boxes. Pace Micro Technology Plc, previously the companyØs sole supplier, reportedly had component shortages last year which led to delays in roll-out.

Singer also admitted considerable customer service problems with the digital offering last year, with Internet users having a "50:50 chance of getting on line," and some subscribers to the digital service reverting back to the analogue service, which then become a focus of marketing.

Ulster TV buys radio stake

Ulster Television (UTV) is about to buy 60 per cent of Republic of Ireland radio group County Media, after a partial U-turn by the Republic's regulator, which put its veto on the purchase earlier this year.

The IRTC has now allowed UTV to buy the IR£17.1 million stake while it continues to debate changing its policy.

UTV managing director John McCann said, "We were aiming for 100 per cent ownership and had hoped to persuade the IRTC of the merits of such a proposition. However, we are hopeful that in light of the forthcoming IRTC review of policy, 100 per cent ownership of County Media is still achievable."

Scopus wins Mexican contract

Tel Aviv based Scopus Network Technologies, a supplier of digital compression technology to the broadcasting industry, has completed a deal with Productora y Comercializadora de Television, Mexico's video distribution network, for the supply of end-to-end digital broadcasting platforms. The deal is worth over $4 million.

Scopus' MPEG-2 DVB platforms replaced an existing system thereby enabling PCTV to increase its transmission capabilities within currently existing bandwidth.

"Scopus technology is now in use throughout Mexico. We are working with PCTV to upgrade its broadcasting infrastructure and assisting the station adjust to new digital realities during this new period in Mexico's political history," said Leonardo Cusnir, Scopus Network Technologies Director of Sales.

News Corp-SBS in jv

News Corporation formed a European television joint venture with SBS Broadcasting to exploit format based entertainment programming according to a report in the FT newspaper.

The new joint venture for northern Europe will produce format based programmes for the core SBS territories of Scandinavia, the Benelux countries, Switzerland and central Europe.

The move that demonstrates a closer relationship between Harry Evans Sloan, SBS chairman, and Rupert Murdoch and reduces SBS'reliance on Hollywood studios for content.

News Corp is SBS' s largest single shareholder with a three per cent stake.

Convergys mergers with Geneva

Convergys Corporation, the Ohio-based group of integrated billing and customer care services, and Geneva Technology Ltd of Cambridge, UK, are merging.

"The key elements in our strategy include accelerating revenue growth in the information management business achieving a strong position in IP-based billing, and offering a full suite of product solutions on a licence, build-operate-transfer, or service bureau basis for wireless voice or data, cable and broadband, wireline and IP-based service providers," said Jim Orr, Chairman, President, and Chief Executive of Convergys.

The Geneva product will continue to be offered as a standalone solution as well as part of broader Convergys solutions.

Convergys expects this transaction to produce incremental revenues of at east $70 million, $125 million, and $210 million in 2001, 2002, and 2003, respectively.

Steven Edwards, founder, chairman, and Chief Technical officer of Geneva Technology said, "This merger will allow us to grow both the existing Geneva and Convergys businesses faster by using each other's strengths. I believe that this deal creates a leading global company in the communications-based billing market."

Callahan's expansion plans

At the Financial Times New Media Conference Dick Callahan, CEO of Callahan Associates told delegates of his immediate expansion plans in Europe. "We plan to deploy broadband past 1.5 to 2 million homes per year for the next two years, we're opening a Data Centre in the UK tonight, were closing deals on Guttenburg and Flanders, passing 50,000 homes per month in Spain (with ONO), we are doing a cable retrofit in Germany that is passing 100,000 houses per month, every month for the next three and a half years, and signing up 1,000 customers per day."

Callahan adds that players in the Broadband maket have to understand all five plays now underway (DSL, Cable, Satellite, Fixed Wireless/3G and Fibre), declaring that none will be loosers, but some will be bigger winners, with his own colours firmly nailed the mast of cable as the best medium and long term solution for interactive services.

Advanced-television.com asked Callahan, following all this investment, with open access being demanded by regulators, how do you hang on to your customers in the face of virtual ISPs, virtual Telcos, VOD players piggy backing your infrastructure and content providers striking up direct relations with customers?

Callahan responded, "The right answer is open access. I'm not in favour of building walls. I'm in favour of giving our customers access to the services they want, and that's probably how we'll make our bet. You know that this is a very complex and difficult issue. But what we understand compared to how we viewed it two years ago, is that the pipe doesn't wash out. A couple of years ago they would have said the access provider didn't make a difference, that wasn't true then and it isn't true now. Creating a broadband pipe that works is a tricky son of a bitch. Look at BT. They've been working on this damn thing a decade, how may they got? 20,000 customers, they should be embarassed to answer that.

The problem is turning a telephone systems built in the 50s, 60s, 70s is a tricky sucker and even if you only spend X in the first round, what about the next 40 per cent, what about the last 20? Do you discriminate against the poor, the council housing. You can't just say I'm gonna take care of the wealthy. That's not going to be an acceptable public policy, so this is a very tricky deal to take to its full cycle. And itØs a long sequence, full cycle is four, five, six, seven years."

Advanced-television asked, You've said you're pro-cable, and it's a great medium for interactivity, but satellite is great for broadcast - do you not see opportunities for teaming up with satellite?

"Yes I do. My argument isn't that one of these looses and another one wins. My argument is that there is a hybrid. I don't know what the balance will be and I suspect nobody does today. You can't just go in like a lot of the fixed wireless guys and say, this is where I am. Five plates are moving and they're moving against you, so you've got to understand the movement of other plates, that's all I'm arguing.

If you don't understand how the others are moving you could be hurt, so the right kind of breakthroughs in satellite could be very threatening to telcos.

BSkyB aims extra £50 per customer
AOL/Time to use Netscape
Chip makers cut profit forecast
Price of buying TVA jumps
Bloomberg to step down
News Corp-SBS in jv
Total TV goes on demand
Two Way Tv in a consumer campaign
WaveRider gets FCC's green light
Eutelsat turns to Internet
Money and standards sought by iTV

BSkyB aims extra £50 per customer

Richard Freudenstein, Chief Operating officer of BSkyB, the UK pay-TV, said at the Financial Times New Media and Broadcasting conference this week in London that he was aiming to win an extra £50 per customer per year from the introduction of interactive services, like SMS messaging, email and interactive advertising for later this year.

The group recently launched an on online betting operation through Sky Sports after last year's acquisition of Sports Interactive. In its recent year-end results, BSkyB said £33 million had come from betting although most is still offline.

Like other pay-TV operations, BSkyB is under pressure to increase revenue per household to begin paying back the cost of giving away set-top boxes.

Currently Telewest tops the pay TV revenue stakes with £38 per month per customer, according to CEO Adam Singer who also addressed the conference (see daily news Tuesday 6th).

AOL/Time to use Netscape

AOL Time Warner has begun using a Netscape 'toolbar', included on the home pages of Time.com, Money.com, People.com and Warnerbros.com, to link together the Web sites of its media products.

The feature lets visitors of these sites use a handful of America Online's popular Web applications such as instant messaging, e-mail, calendar and search. CNN and other Time Inc magazines are slated to join in the coming weeks.

"This new initiative clearly positions Netscape as an important cross-promotional engine for the AOL Time Warner network of Web properties," Netscape President Jim Bankoff said in a statement.

Netscape hopes to increase the number of users for its Web applications by using these media sites as a distribution point. The move is a major snub for Microsoft's Explorer browser which had been accused of gaining market share from Netscape though unfair practices.

Chip makers cut profit forecast

Another indication of the slowing American economy came as chip makers, Cypress Semiconductor and LSI Logic issued profit warnings on the heals of a worldwide 5.7 per cent decline in chip sales during January. Cypress reported a 15 per cent revenue decline forecast for the quarter and LSI with a 30 per cent decline. The announcements joined one made last week by Applied Micro Circuits blaming the slow down on weakenesses among clients like Nortel and Cisco.

Price of buying TVA jumps

The price Quebecor Media may have to pay for control of TVA, North America's largest French language broadcaster may jump by C$30 million.

When Quebecor Media gained control of Canada's third largest MSO, Le Groupe Videotron last October for C$5.9 billion, one of the assets it bought included 36 per cent of TVA and 99 per cent of its voting shares. When media companies change hands in Canada, 10 per cent of the acquisition price must be pledged to Canadian content productions.

Quebecor has pledged C$30 million based on its 36 per cent stake. However, a study for the federal regulator is arguing that when the voting shares are taken into account that value should double and Quebecor pony up an additional C$ 30 million. Quebecor will dispute the levy in hearings scheduled for late March.

Bloomberg to step down

Media mogul Michael Bloomberg is stepping down as chairman of Bloomberg LP, naming Peter T Grauer, a long time associate, as his successor.

Bloomberg's board has other four new members, former Securities and Exchange Commission chairman Arthur Levitt, financial columnist and author Jane Bryant Quinn, Frank Savage, chairman of Alliance Capital Management International, an investment advisory firm, and Thomas Secunda, a founding partner of Bloomberg.

News Corp/SBS JV

News Corporation has formed a European television joint venture with SBS Broadcasting to exploit format based entertainment programming, as reported in ATV yesterday.

SBS Broadcasting was formed in the early Nineties by Harry Sloan, a former media lawyer who made a personal fortune by the creation of New World, a production company that soon became a major player in the US and international television world. With the profits from selling New World Sloan decided to explore 'commercially un-exploited markets in Europe,' his first choice was Sweden where he bought into Kanal5, for a number of years the third biggest private television operation in Sweden. Soon Sloan and his US partners also acquired or created major TV properties in Denmark (TVDanmark) and Norway (TVNorge).

A couple of years later the Netherlands followed: SBS6 was founded, then Net5, and recently SBS has become a major shareholder in Fox Kids, a joint venture between News International and Saban Int'l. In recent years SBS Broadcasting has also been increasingly active in Central and Eastern Europe, running TV stations in a growing number of countries, today a total of 11 territories, reaching some 140 million viewers all over Europe. A number of radio stations is also part of the growing empire. SBS is also deep into new media like interactivity, the web.

An alliance between SBS and US-controlled media giant UPC was planned last year, but fell through in the very last minute, after the UPC share suddenly nose-dived.

According to spokesmen for News International and SBS Broadcasting the new Nordic operation will be able to combine Fox World's vast content and programme library with the expanding broadcasting facilities of SBS Broadcasting. The intention is to use the planned new Nordic production base to produce various entertainment programmes, aimed at the markets where SBS runs TV stations.

Reactions in Norway are surprisingly positive, given that this is one of the most nationalistic and protective markets in Europe, "Those not taking it seriously - that the world's biggest media mogul is moving into the Nordic arena - cannot not be quite sane," comments Jan Erik Knarbakk, media president of Schibsted. Schibsted is Norway's oldest and biggest media conglomerate, a major shareholder in Norway's biggest station, TV2, and also owner of one of Scandinavia's biggest production groups, Metronome.

Knarbakk says he does not feel threatened by the new production operation, "Those making the best programmes will simply be the winners, and as long we have access to top creative people, safely rooted in their home markets, we will be one step ahead. Big international players like Pearson and Endemol have been up here before, and found out that local expertise is necessary."

Total TV goes on demand

Australian interactive television pioneer Total Television Australia Limited launched its television on demand service, Easy Television, available for subscribers over TransACTØs broadband network for $40 per month.

The plan is to connect 100,000 homes by 2002.

The services will include movies and music on demand, home shopping, broadcast pay TV, Internet on TV and email on TV. Classic movies on demand will be available for $4 and Premier movies for $6 on a pay per view basis.

Easy Television has already signed programming deals for the Australian market with top content providers including BBC Worldwide, TransWorld International, a sports content provider, and asSeenonScreen.com, the site that lets you buy what you see in film and TV. Other content agreements are expected to follow shortly.

Launching the service and the Easy Television brand in Australia, Thomas Kressner, Chairman and Chief Executive of Yes Television, said, "Easy Television will use TransACT's state-of-the-art network to deliver a service at the forefront of broadband entertainment. Easy Television will allow complete, easily navigable control, from free-to-air to pay TV to true video-on-demand, where viewers select and watch their programmes in an instant, and rewind or fast-forward programs like a videotape, with unlimited plays."

Richard Vincent, Chief Executive of TransACT Capital Communications commented, "Easy Television is the most exciting thing to happen to television since its inception. Together, we will be deploying one of the world's most revolutionary entertainment and communications service to Australia. This world-leading venture exploits the enormous potential of the TransACT broadband network and gives television viewers flexibility to watch what they want, when they want."

Two Way Tv in a consumer campaign

Interactive entertainment channel Two Way TV has appointed advertising agency BDS Beechwood to launch a major consumer campaign designed to increase viewer and player numbers.

Two Way TV, which is currently available to digital cable subscribers in the UK, will have its own channel on ONdigital from the spring

Later this year Two Way TV expects to roll-out its enhanced TV programmes that enable the viewer to join in with broadcast quiz shows and sports events.

Two Way TV Head of Consumer Marketing Liza Burdett said, "We have appointed BDS Beechwood to show the potential of Two Way TV, to tell viewers they can
play a whole host of games linked to familiar television shows. We think of this as 'event television' games created for a mainstream family audience grouped

BDS Beechwood Managing Partner John Wood said, "The brief for us is to make sure that everyone who can sample Two Way TV does so. As we found out for ourselves, once you've enjoyed a Two Way TV game, it's something that you want to come back to again and again."

WaveRider gets FCC's green light

WaveRider Communications Inc, a wireless information technology company, has received approval from the Federal Communications Commission and Industry Canada for its LMS3000 wireless modem, which delivers Internet access at speeds up to 1 Mbps to small business and residential users via non-line-of-sight technology.

"The FCC's approval of the LMS3000 end-user modem is a significant milestone in the development of this product," said Charles Brown, Vice President, Sales and Marketing, WaveRider Communications Inc. "We expect that, as the first fixed wireless end user modem designed specifically for use by residential and small business customers, the LMS3000 will be in great demand.''

WaveRider has also received Industry Canada approval for its newest 2.4 GHz radio, which will be incorporated into its NCL and LMS systems.

Turner and Soros' interest in NTV
US cablecos go digital
NTL meets targetsl
Cartoon Nework's site expansion
C$325m suit against CanWest
Nordic countries dig MHP
HP teams up with RealNetworks
AOL/Warner restructuring
AT&T's 3 millionth customer

Turner and Soros' interest in NTV

US media mogul Ted Turner and New York financier George Soros have both expressed an interest in buying into Russia's last major independent television channel, NTV, owned by Vladimir Gusinsky.

Gusinsky, who is currently under house arrest in Spain, fighting an extradition demand by Russia on fraud charges, said that he received the offer at the weekend and discussions are still in progress. He added that he is prepared to sell his holding in the television station so long as its independence is guaranteed.

Turner and Soros are known to have discussed a joint approach to Gusinsky to preserve NTV's independence.

US cablecos go digital

A recent survey by Cahners Group noted that more than 90 per cent of US cable television system operators are offering a high-speed Internet service, up from 32 per cent in late 1999.

According to the report 64 per cent of US cable operators expect to make available five digital TV channels within the next 24 months, while 18 per cent expect to offer more than 30 digital channels. System operators are still deploying the digital cable set-top boxes that subscribers need to access digital services.

NTL meets targets

NTL Inc, the UK's leading cablec, is sticking to its 2001 financial targets after posting record fourth quarter results that were in line with analysts' forecasts.

Chief Executive Barclay Knapp said the company, which had 530,700 digital TV subscribers and 12,800 broadband Internet customers, should achieve its 2001 goals of £385 million earnings before interest, tax, depreciation and amortisation on £2.6 billion of revenues.

NTL's EBITDA for October-December was £65 million, making a year total of £229 million. Revenues were £586 million, giving £1.88 billion pounds for the full year.

Cartoon Nework's site expansion

Cartoon Network's websites are now being launched in local tailor-made versions for Poland, Spain and Norway.

Cartoon Network is a popular kids cable and satellite TV channel in both Poland and Spain and launched a Norwegian language TV service and Norwegian version of its comic on March 3rd.

The new sites are based on the award winning English language original and are packed with games, down-loadables and character microsites.

"We are making this commitment to Poland, Spain and Norway to build on the Cartoon Network experience and develop greater interactivity in those countries," says Stephen Johnstone, VP of Interactive for Turner Entertainment Networks. "They are designed to support Cartoon Network's commercial and marketing initiatives and to become destinations in themselves."

C$325m suit against CanWest

CanWest Global, along with founder Izzy Asper, is being sued by former partners. Former business partners Seymour Epstein and Paul Morton have alleged breaches of fiduciary duties and misappropriation of corporate profits. Epstein and Morton were former partners of Asper and have chased him through the courts in the past. In their last go-round in 1989, Asper gained control of Global, CanWest's television operations in Southern Ontario.

In addition to damages the plaintiffs seek to obtain fair market value for their 30 per cent ownership of television stations in Western Canada. CanWest believes the suit to be without merit.

Nordic countries dig MHP

Peace has finally been made in the troubled Nordig, the Nordic 'digital TV forum' with all major Nordic broadcasters, public service and private, satellite platforms, cable operators as members, with the objective to identify a common, open standard for the digital television future. At a dramatic meeting on Tuesday (March 6), and after years of solid discord, all the major operators finally managed to agree on a plan for future development, where the DVB-MHP standard will be the joint platform.

The result of this meeting means that all the ongoing 'digital wars' mainly in the DTH arena, where Telenor's and Canal Plus's joint venture Canal Digital and Viasat are the main contenders, each with some 1.2 million subscribers in the four Nordic countries, and for the last months fighting fiercely for increasing market shares ° will continue, business as usual, with the players in this game agreeing to work together for the establishing of a joint, common, open standard - MHP.

Canal Digital has adopted the Media Highway operating system, developed by its owner, Canal Plus, while both Sweden's Com.hem, the country's DTT platform operator Senda, and recently also Viasat, have all gone for Open TV, "While waiting for MHP to get its act together," as one leading representative of Senda earlier declared.

Ulf Groth, MD of Viasat since last summer, is playing down the significance of the Nordig agreement, "After all, it just means that we are all supporting a vote for an open standard; it is not a very significant legal document, more like a letter of intention." Viasat has been frequently accused of trying to 'lock in' its subscribers and creating major obstacles for 'double card' users. Viasat has also demanded that the system to be selected should be backwards (legacy system) compatible.

However, Arne Wessberg, MD of Finland's public service broadcaster, and also the chairman of Nordig, stresses the importance of the decision, "Hopefully what we have agreed on today will mean that the development of digital television in our four countries will finally take off, and that all households in our part of the world will soon be able to utilise all the services and all the potential made available by the digital technology."

Finland decided early last year that MHP would become the common standard for its DTT project, to be massively launched in August. As a result, a Nordic technical standard for the propagation of digital television signals will be introduced from Autumn 2002 which will allow viewers to use one digital set-top-box, rather than one for each satellite or cable operator, according to recent reports.

HP teams up with RealNetworks

Hewlett-Packard and online music service RealNetworks, are teaming up to create digital entertainment products that will allow consumers to download and personalise music and streaming video in their living rooms.

Palo Alto based HP will create hardware other than PCs on which people can watch streaming video and listen to music over the RealPlayer, RealNetworks streaming media player.

Subscribers will be able to access Internet media through this HP box in the same way you would in the Internet world, but on a larger screen. The machines' components will work for narrowband as well as broadband connections.

AOL/Warner restructuring

AOL Time Warner is restructuring its television holdings, assigning the old Ted Turner cadre of cable channels and the WB network to a new division headed by WB founder Jamie Kellner.

The new AOL unit plans to launch several new cable outlets, including a cable music channel designed to compete with MTV. The changes are also significant in that they seem to formalise the end of the Ted Turner era.

Said one rival media executive upon hearing the news, "It's like the only things at Turner Broadcasting that are left are the logos."

In addition, AOL Time Warner plans to boost its proportion of international revenues from 17 to 50 per cent over the next decade, which is forecast to result in major European expansion.

AT&T's 3 millionth customer

AT&T Broadband, a business unit of AT&T, has installed its three-millionth digital cable customer; Glen McGraw of Cypress, California, which was presented with a year of complimentary AT&T Digital Cable service as a thank-you gift.

Dan Somers, President and Chief Executive officer of AT&T Broadband said, "We continue to see strong customer demand for AT&T Digital Cable. AT&T Broadband's Digital Cable service offers customers a broad range of programming choices at a great value. Multiple movie channels from HBO, Showtime, Starz! and Encore, a wide range of Pay Per View options, combined with special features, including an interactive electronic program guide and parental controls, make this service truly customer friendly."

NTL in Liberty talks
US local channels protest
AT&T cable sale slowdown
Vivendi considers BSkyB options
Canal+ denies leaked results
Kingston broadens portfolio
Sprint Direct drops 7 channels
BSkyB goes digital
Canadian cable channels change hands
Eutelsat succesful satellite launch
AOL TV's new CEO
Emusic to become the new Napster
NTL to reach more than 500,000 homes
OpenTV launches iTV Service
Cisco invests in Phaethon

Sprint Broadband Direct in the US will drop seven of 30 channels from its local TV service to free up network capacity for its high-speed Internet access service.

The channels to be dropped are USA Network, Fox Family, Lifetime, CNBC, CMT (Country Music Television), TNN (The National Network) and AMC (American Movie Classics).

Sprint Broadband Tucson General Manager George Plew said the monthly charge will be reduced from $19.95 to $13.95 a month to reflect the reduction to 23 channels. Additionally, Sprint Broadband will waive the $299 installation charge and the first month's $49.95 service fee for existing TV customers who sign up for wireless Net access by the end of March.

BSkyB enters digital radio

British Sky Broadcasting is about to expand into digital radio by taking a minority stake in digital broadcasting group Radio First Plc.

Radio First has exclusive 12-year digital audio rights with football clubs Chelsea, Southampton, Derby County and Aston Villa and plans deals with four more clubs.

It is believed that Radio First will secure carriage for its audio services on Sky Digital in exchange for about 20 per cent of its equity - although stand-alone digitial radios are prohibitively expensive, many Sky subscribers use their digital set tops to tune into digital music services.

Canadian cable channels change hands

Canada's second largest MSO, Shaw Communications Inc, is selling The Women's Television Network to Corus Entertainment Inc for in excess of C$180 million. Corus like Shaw is controlled by the Shaw family. Whether or not the Federal regulator will let the deal pass is up for grabs.

The regulator has refused to allow Corus to expand its cable channel holding in the past because of the fear that cable companies will give channels they own favourable positioning. Shaw may be hoping to sidestep this impasse by selling Astral Media its 50 per cent interest in The Family Channel and its 20 per cent interest in Teletoon for C$126 million. This gives Astral 100 per cent of Family and raises its stake in Teletoon to 40 per cent.

Eutelsat succesful satellite launch

Eutelsat 's Eurobird satellite was successfully put into orbit by Arianespace on board an Ariane 5 launch vehicle on Thursday, March 8.

The new satellite is positioned in geostationary orbit at 28.5 degrees East where its 24 Ku-band transponders will be brought into commercial service next month.

The first of three Eutelsat satellites due for launch this year, Eurobird will provide valuable bandwidth and high-power for rapidly expanding digital consumer entertainment and business-to-business networks in western and central Europe. It joins the 18 other satellites operated by Eutelsat that provide coverage of Europe, Africa, large parts of Asia and connectivity with North America. Capacity on three additional satellites is also used by Eutelsat according to arrangements with other operators.

Five million homes in UK and Ireland will be able to receive broadcasts from Eurobird via 45cm antennas. Client broadcasters confirmed on the satellite include BskyB, Extreme Sports, Online Classics and Euronews. On the European continent, in particular Germany, the satellite will serve diverse requirements for capacity for corporate networks, IP access and TV channel delivery to cable headends.

Commenting after the launch, Eutelsat Director General Giuliano Berretta said, "The tremendously high level of commercial interest in our new satellite signals that Eutelsat is successfully anticipating market demands, delivering capacity that offers high power on the ground and flexible coverage options at an orbital position of strategic importance in Europe. The launch of Eurobird, coming a few days after the contract signature of e-BIRD, underscores Eutelsat's commitment to the continued growth and diversification of digital services in Europe."

It was the first Eutelsat satellite on the Ariane 5 launch vehicle.

AOL TV's new CEO

AOL Time Warner is expected nominate Robert Friedman, co-chairman of New Line Cinema's marketing division and president of New Line Television, to the newly created position of president of AOL TV.

As president of AOL TV, Friedman will be responsible for devising new uses for interactive television and untangling the protocols for its on-screen television guide. He also has the challenge of getting subscribers to pay for the emergent service.

Emusic the new Napster?

Emusic, an Internet music firm, which licences and sells music from artists and labels in MP3 files, became the latest company to sue file-sharing service Napster Inc for copyright infringement.

The heart of the suit revolves around Napster's refusal to filter out and effectively block EMusic tracks from being traded through its system without Emusic's permission. An EMusic representative hailed the legal action as a, "major step towards leveling the playing field for legitimate downloadable music companies."

NTL reaches 500,000 homes

NTL has signed up more than 530,000 homes to its digital cable TV service and has 12,800 broadband internet customers, a number it hoped would increase to 100,000 within the next nine months.

Chief Executive Barlcay Knapp said, "Our immediate goal is to drive the majority of revenue growth from ARPU increases rather than adding new customers." He added that the group was on track to achieve its financial targets for 2001 despite a pre-tax loss of $3.07 billion last year.

OpenTV launches iTV suite

OpenTV, the UK interactive television and media solutions company has launched its iTV Service Platform Suite, which integrates components of iTV service including communication, commerce, advertising management and customer relationships.

The Service Platform Suite is designed to work across multiple operating systems and will be offered as a complement to OpenTV's set-top box technology solution and applications offerings.

Cisco invests in Phaethon

Cisco Systems Inc is investing in a $22.1 million financing deal for Phaethon Communications, a California based start-up, which develops components that compensate for 'dispersion' on fibre-optic lines.

Phaethon's CEO Gary Cuccio said, "This new funding will fuel our next round of growth, including manufacturing capabilities, we'll sell to system providers like Cisco, Nortel, Lucent, Alcatel, Corvis, Sycamore. They're trying to increase bandwidth and are running up against dispersion."

Cisco was joined in Wednesday's (March 7) funding package by Silicon Valley venture capital firm Mohr, Davidow Ventures and the Photonics Fund, which invests in optical networking technology companies.