NEWS
Monday 26th April to
Friday 30th
April 2004
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Friday
30th April 2004
Carlyle
Group buys Kingston Inmedia for £34 million
Time
Warner doubles Q1 earnings
Ofcom:
BT must cut local loop prices
FT
Q1 revenues up 4.8 per cent
Real
Networks revenue up, heading for profit
Nokia
slashes prices in battle for market share
Italy:
media reform bill heads for approval
ntl
donates airtime to unique charity television channel
Malaysia
gets TV on 3G phones
3G
business boosts KDDI
TVNZ
terminating satellite venture
Alcatel
launches push-to-talk
Carlyle
Group buys Kingston Inmedia for £34 million
Global private equity firm The Carlyle Group has acquired Kingston Inmedia,
the satellite service provider from Kingston Communications plc, the UK alternative
carrier, in an all-cash deal of £34 million (E51.5 million). Backing Inmedia's
management, Carlyle conducted the deal with Barclays Leveraged Finance providing
the debt financing.
Kingston Inmedia, which delivers broadcast and internet solutions to business
using satellite-based technologies, had 2003 revenues were £33.4 million with
EBITDA of £5.7 million, and employs165 people.
"Kingston Inmedia is led by an excellent and committed management supported
by a high quality asset base, strong customer service and a competitive offering.
We believe the company will flourish as a private company and we look forward
to working with the team," said Bruno Mourgue d'Algue, Associate Director, The
Carlyle Group.
Nick Thompson, CEO of Kingston Inmedia, commented, "This is a great opportunity
for Kingston Inmedia. Carlyle's significant international interests will enable
us to capitalise on a number of expansion opportunities that were too divergent
for our previous owner. With the strong support of Carlyle we hope to grow the
company significantly over the next years."
The company will continue to trade under the name of Kingston Inmedia for the
immediate future.
"This deal fits well with our expertise in the telecoms sector at Carlyle and
the CEVP strategy of investing in later stage technology companies. Kingston
Inmedia's robust business fundamentals aligned with positive signs of growth
in the market make it an attractive investment for us," said David FitzGerald,
Managing Director and co-head of Carlyle Europe Venture Partners. CEVP is a
E553 million fund that focuses on investing in later-stage companies in the
technology sector, from expansion capital to small buyouts.
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Time
Warner doubles Q1 earnings
Time Warner, Inc. reported first-quarter results with doubles earnings thanks
to improving advertising in its network television division, better than expected
sales in its large cable business and strong results from its film studio.
The media conglomerate reported net income of $961 million against $396 million
a year earlier. Operating income grew 40 percent from a year ago to $1.6 billion
on sales of $10.1 billion, up nine per cent.
Meanwhile, although the company's AOL business did report another decline in
subscribers - it ended the first quarter with 24 million U.S. subscribers, a
decrease of 237,000 from the fourth quarter - revenues were unchanged from a
year ago and rose underlying earnings rose 21 per cent. However, the company
disclosed in its earnings report that the Security and Exchange Commission and
Department of Justice investigations into accounting practices at the AOL unit
is continuing and could lead to further restatements of Time Warner's financial
results
The company's cable unit added 137,000 digital cable subscribers and 193,000
high-speed data subscribers in the quarter.
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Ofcom:
BT must cut local loop prices
Steven Carter, CEO of the UK's Ofcom, has referred to previous efforts to make
BT give access to the local loop as »embarrassing', and made clear he is looking
for major reductions in BT's tariff to other broadband providers.
He said Local Loop Unbundling (LLU) in the UK was way behind European best practice;
the cost of connection is twice the European average and line rental is one
third higher. With only 8,000 lines unbundled (compared to three million in
Germany), acquiring wholesale capacity from anyone BT was virtually impossible,
he said.
Carter was speaking at the announcement of the initial stage of a year long
review into the telecoms sector.
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FT
Q1 revenues up 4.8 per cent
France Telecom's consolidated Q1 2004 revenues were E11.45 billion, compared
to E10.9 billion 2003, a 4.8 per cent increase.
The increase in revenues was mainly due to the robust performance of Orange
and Wanadoo, which recorded increases of 12.1 per cent and 15.3 per cent respectively.
Revenues for the Fixed, Distribution, Networks, Large Customers and Carriers
segment experienced a limited decrease of 0.6 per cent. This was due in particular
to robust growth in revenues from ADSL in the context of accelerated deployment
of the Group's broadband strategy, the objective of which is coverage, on a
national average, of 95 per cent of the population at the end of 2005. Revenues
in France from ADSL were E239 million for Q1 2004 (excluding unbundling), compared
to E157 million for Q1 2003, an increase of more than 50 per cent.
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Real
Networks revenue up, heading for profit
Real Networks, the US digital media company, saw revenues climb 29 per cent
to $64 million in the first quarter. Losses for the period were $10.4 million
against $2.8 million last time.
The company said the increased revenues came form consumer media services like
music and games and the widened losses were partly due t write downs and litigation
cost. It said it forecast quarterly profitability by the end of this year.
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Nokia
slashes prices in battle for market share
Nokia is aggressively cutting the prices of handsets it sells to mobile operators
and phone retailers in a bid to reverse recent falls in its global market share.
Some of Nokia's phones have been cut by as much as 25 per cent in recent days
as the handset maker seeks to compete with popular models from the likes of
SonyEricsson and Samsung. The price cuts have occurred across the globe and
across virtually all models, with the biggest cuts on cheap entry-level phones.
Earlier this month Nokia reported a 2 per cent year-on-year decline in revenues,
well below its guidance of an increase of betwen 3-7 per cent. Nokia blamed
the sales fall on lower-than-expected volumes and its lack of attractive handsets
in the key middle-market range.
Last year Nokia's share of the global handset market was about 38 per cent but
this suffered in the first quarter of 2004 in the face of growing competition,
particularly from Asian manufacturers.
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Italy:
media reform bill heads for approval
Italy's parliament moved closer yesterday to giving final approval to a media
reform bill that has been one of the most contentious measures introduced by
Silvio Berlusconi, the media magnate and prime minister, since he took power
three years ago.
Berlusconi's centre-right coalition deployed its majority in the Senate, or
upper house, to win a series of votes on the bill just one month after it was
passed by the lower house. The government portrays the bill as an effort to
modernise Italy's media sector by setting a timeframe for the introduction of
digital television, reshaping the advertising market and preparing the media
industry for foreign competition.
Critics of the bill, say it will entrench the almost total control of the Italian
TV market that is enjoyed by Mediaset and Rai, the state-run broadcaster over
which Berlusconi, as premier, is in a position to exert influence.
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ntl
donates airtime to unique charity television channel
ntl is the latest media company to give its support to The Community Channel
õ the UK's only not-for profit TV station õ by donating a slot from 10am to
4pm daily.
From today, ntl customers who currently receive the "local" channel 14 in their
package will be able to access The Community Channel.
Owned by the Media Trust, a registered charity, the Community Channel enjoys
the support of the whole media industry. Through a range of lively, innovative
and thought- provoking programming the channel helps the charity and voluntary
sectors increase their profile, recruit volunteers and raise funds. It also
provides a place where viewers can have their voice heard and find out how to
get involved in community and charity activities.
Jane Mote, Community Channel controller, said: "The Community Channel offers
viewers a genuine alternative choice on digital TV. We're excited that ntl customers
will now be able to see what we have to offer and discover ways that watching
telly can make them feel better about themselves!"
Trustees of the charity include Michael Green (chair), Mark Thompson (CEO 4),
Jon Snow, Tony Ball and Greg Dyke. Core funding is from the Home Office Active
Communities Unit (ACU) and Lottery Community Fund and it has received cross-industry
support worth in excess of £1 million.
Meanwhile, NTL, has hired Keith Monserrat as director of communications and
policy. Monserrat, who will report to CEO Simon Duffy, has served on various
government and Oftel committees.
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Malaysia
gets TV on 3G phones
Mobile phone users in Malaysia can expect to watch their favourite television
programmes on next generation handsets. Maxis Communications, which launched
trial of its 3G service in March, will expand its streaming video content on
its current GPRS network to its 3G network and take advantage of its higher
data rates.
Astro will provide the programmes with clips running at 64Kbps and 24fps (frames
per second). The Video Live streaming on Maxis's GPRS network is formatted for
20Kbps and 8fps. TV programmes are converted into either 3GP video format or
Real Media format and stream to handsets. The servers automatically detect the
phone's requirements and stream the appropriate content.
Andrew Tu, Measat Broadcast Network Systems general manager for multimedia interactive
technologies, said over one-third of Maxis subscribers with GPRS-enabled videophones
had signed up to the service.
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3G
business boosts KDDI
KDDI, Japan's second-largest telecommunications operator, doubled profits as
its "au" mobile phone business enjoyed a surge in subscribers who were attracted
to its third generation service.
KDDI, which has signed up more than 13.4 million 3G subscribers, was able to
benefit as well from reduced costs in its PDC system, the mobile phone technology
that is unique to Japan. The telecoms group uses the CDMA2000 standard for 3G,
which has been adopted mainly in Korea and the US, among leading markets. This
has helped KDDI to attract large numbers of subscribers since the technology
is backwards compatible.
Operating profits at au were up fourfold at Y239.5 billion ($2.2 billion) and
forecast to rise further to Y279 billion this year. This increase was achieved
in spite of a moderate decline in average revenue per user from Y7,570 to Y7,440.
The fixed line business suffered a sharp decline in profits, posting a net loss
of Y29 billion.
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TVNZ
terminating satellite venture
The New Zealand state broadcaster is closing Satellite Services, which has a
staff of 28, just months after TVNZ signed the subsidiary up to an international
alliance.
The deal with Intelsat Global Sales and Marketing was hailed last September
as a potentially multimillion-dollar revenue earner. But TVNZ said Satellite
Services was the victim of a worldwide recession in the satellite carriage business,
which had caused "enormous price pressure and major change" in the industry.
Last year's Intelsat deal was aimed at giving broadcasting customers access
to a global network of satellite and terrestrial infrastructure complemented
by a portfolio of television broadcast services. A TVNZ spokeswoman said yesterday
that Intelsat was working with the company to end the alliance amicably and
economically.
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Alcatel
launches push-to-talk
Alcatel has launched its new push-to-talk (PTT) application as an integrated
part of its IP multimedia communication portfolio. The Alcatel push-to-talk
is a Voice over IP (VoIP) streaming service that essentially turns a mobile
phone into a walkie-talkie, which operates over GPRS and UMTS networks.
The application provides mobile operators with Voice over IP services allowing
them to enter the push-to-talk market using their existing GPRS networks.
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Thursday 29th
April 2004
Comcast
withdraws Disney bid
UTV
bosses to go after NBC deal
Wanadoo
in broadband push
Korea's
KT to start its own satellite broadcasting service
Murdoch:
market fragmentation to affect ad sales
Telewest to vote on restructure in June
QVC
uses SES Americom's HD-PRIME
New
Skies/ISRO partner on India's DTH service
SES
Astra to carry Czech free-to-air TV channel
Webtv
& Universal Music ink deal
Comcast withdraws Disney bid
Comcast, the largest US cable company, said it would withdraw its $48.4 billion
bid to buy Walt Disney. "It has become clear that there is no interest on the
part of Disney's management and board in putting Comcast and Disney together,"
Comcast CEO Brian Roberts said in a statement.
Roberts added: "We have always been disciplined in our approach to acquisitions.
Being disciplined means knowing when it is time to walk away. That time is now."
The news came as Comcast posted solid first-quarter numbers, with a 21 per cent
operating cash flow growth in its core cable operations. The company also said
it would resume a $1 billion stock buyback plan.
Comcast reported first-quarter net income of $65 million, compared with a loss
from continuing operations of $355 million, a year earlier. Revenue rose to
$4.91 billion from $4.47 billion. Results from the QVC network, which Comcast
sold in September, were accounted for as discontinued operations.
Shares of Comcast, which had fallen nearly 12 per cent since it announced its
bid in February, rose as much as six per cent in pre-market trade and Disney's
dropped two per cent.
The withdrawal of the bid comes a day after Disney's board reiterated support
for embattled CEO Michael Eisner, who has faced sharp criticism from high profile
shareholders. Eisner lost his chairman title after a contentious annual meeting
last month.
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UTV
bosses to go after NBC deal
The top two executives at Universal Television Group, the cable-TV and production
arm of Vivendi Universal Entertainment, are to resign following its merger with
General Electric's NBC network, according to a report in the FT.
Michael Jackson, Chairman of Universal Television, and David Goldhill, President
and COO, will leave shortly after completion of the deal, which values the enlarged
NBC Universal at an estimated $43 billion.
The high-level departures underline the ascendancy of NBC executives at the
combined group, which will be 80 per cent owned by GE and 20 per cent by Vivendi
Universal of France. NBC Entertainment President Jeff Zucker, has already been
named as President of the new company's entertainment, news and cable operations.
Universal executives have expressed concern at the concentration of power under
Zucker, and warned of several management departures. NBC, however, has played
down the prospect of large-scale job losses among Universal's 1,200-strong workforce
in the TV division.
Jackson, a former CEO of Britain's Channel 4 and Director of television at the
BBC, has been named as a possible contender to become DG of the BBC. But he
is not thought to have applied for the job, vacated by Greg Dyke in January.
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Wanadoo
in broadband push
As of now the UK's Freeserve no longer exists as parent France Telecom rebrands
the service as Wanadoo, its ISP service.
Wanadoo is positioned as broadband provider and Eric Abensur, UK CEO, said they
are backing up that positioning with a new broadband product, a 512Kbp £17.99
(E27) service, which he admitted was actually a loss leader.
As part of its new UK vision, Wanadoo is banking on adding another one million
broadband users during the course of this year õ it currently has about 2.5
million broadband subscribers in total.
Wanadoo also has visions of a residential gateway for all, with TV on-demand
over DSL and phone-to-phone VoIP forming the backbone of the cash cow. Abensur
also said that the home gateway õ with Bluetooth, Wi-Fi, VoIP and TV-on-demand
capabilities õ could be available to consumers by summer of this year.
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Korea's
KT to start its own satellite broadcasting service
From Shveta Malik in New Delhi
Korea's largest fixed-line carrier, KT Corp, has decided not to invest in the
SK Telecom-led consortium on satellite-based mobile broadcasting. Company officials
said that KT will instead focus on starting its own satellite broadcasting services
by 2006, when it plans to launch its own satellite.
KT has been in talks to join the satellite broadcast operators TU Media, a company
30 per cent owned by SK Telecom. For the last two years, SK Telecom has been
preparing for digital multimedia broadcasting, which will allow subscribers
to watch television broadcasts in real time on their cell phones. KT had been
weighing whether to independently pursue the project or join a consortium led
by SK Telecom.
"Considering the government initiative to launch a successful satellite DMB
(digital multimedia broadcasting) business and SK Telecom's intentions of putting
the preparation process on the fast track, we decided that it would be right
for us to move on," said KT President Lee Yong-kyung.
TU Media, which also has Japan's Mobile Broadcasting and Samsung Electronics
as shareholders, is scheduled to begin the satellite mobile broadcasting services
in July.
The technology is an advanced receiver technology designed to provide audio
and video signals to portable hand-held devices such as cellular phones and
laptop computers via satellite.
SK Telecom is the country's largest mobile operator, serving more than 53 percent
of the country's 35 million cellular phone users.
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Murdoch:
market fragmentation to affect ad sales
Rupert Murdoch, News Corp Chairman and CEO, said that he expected television
networks would see smaller price increases for their commercial air time during
the annual up front market when advertisers buy ad time for the autumn season.
"There were pretty dramatic increases a year ago," Murdoch was reported as saying
in a briefing at a Milken Institute conference. "I think it will be a bit smaller
this year. Not because the market is a lot softer," he said, "but because the
market is fragmenting with the rise of cable television channels."
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Telewest
to vote on restructure in June
A High Court judge has directed Telewest stakeholders to meet on June 1 to vote
on the cable operator's £3.8 billion (E5.7 billion) debt-for-equity swap, bringing
the company one step closer to completion of its protracted reorganisation.
Justice David Richards also in effect rejected a plea by a minority group of
sterling-denominated bondholders. They had requested a change in the currency
exchange rate the company is expected to use when it converts the sterling-denominated
bonds into dollar shares.
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QVC
uses SES Americom's HD-PRIME
Electronic retailer QVC, has signed a long-term transponder agreement for C-band
service aboard SES Americom's HD-PRIME cable neighborhood.
QVC's television shopping network, which currently reaches 85 million US homes,
will be delivered aboard SES Americom's AMC-10 satellite, the first of two spacecraft
to be launched this year in support of HD-PRIME.
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New
Skies/ISRO partner on India's DTH service
The Netherlands-based New Skies Satellites and ISRO (Indian Space Research Organisation)
have signed an agreement for multiple high-powered 36 MHz Ku-band transponders
on the NSS-6 satellite. The capacity will support the launch of the world's
largest free-to-air DTH service for Doordarshan, India's national broadcaster.
The DTH service, expected to begin in June, will provide an initial bouquet
of 30 free channels, 15 from Doordarshan and 15 from private broadcasters, as
well as 20 radio channels throughout India. Additionally, one of the transponders
is expected to be used for digital satellite newsgathering.
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SES
Astra to carry Czech free-to-air TV channel
SES Astra and Stanice O, a media company based in Prague, Czech Republic, have
teamed up to provide free-to-air digital distribution of Czech channel TV Oeko.
TV Oeko is Czech Republic's first dedicated music and lifestyle channel with
a strong emphasis on Czech and Slovak music. Starting May 1st 2004, the channel
will be broadcasting free-to-air via the Astra Satellite System at 19.2 degrees
East, currently reaching over 28 millions DTH households in 30 European countries.
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Webtv
& Universal Music ink deal
Universal Music UK has signed a deal with UK-based Webtv Europe to enable the
secure distribution of its music and video portfolio to mobile phones and hand-held
devices.
Universal Music UK currently has 26 per cent of the UK music sector including
major artists such as U2, Keane, Scissor Sisters and Daniel Bedingfield. Its
portfolio includes over 300,000 digitised tracks.
Rob Wells, Group Director of New Media for Universal Music UK, said: "Establishing
a secure and efficient route to market for digital entertainment is vital to
the future development of our industry. Webtv Europe has succeeded in putting
together a business model that meets our requirements for both security and
efficiency."
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Wednesday
28th
April 2004
£300m
for digital switchover?
Murdoch:
no sales talks with Liberty
3G
loan agreed
NDS
Q3 results
BSkyB
coy on James Murdoch's pay
SingTel
and SIP partnership for VoIP worldwide
LBO
fears increase Intelsat debt pressure
NDTV
IPO five times oversubscribed
Alcatel
sets up Chinese venture
BSkyB
picks TANDBERG for Advanced Technology Centre
£300m
for digital switchover?
The UK Department of Culture Media and Sport has asked for £300m (E454m) to
boost the chances of a digital switchover by 2010. According to The Times the
request is part of the latest internal government spending negotiations.
Broadcasters and manufacturers have long campaigned for government assistance
and the DCMS now recognises there has to be a dedicated body to manage the switch
and it will require funding. According to reports up to £100m will be earmarked
for a marketing campaign with most of the rest destined for conversion subsidies
for pensioners and others.
The government believes a successful switch could be worth around £2bn including
the auction of the freed radio spectrum.
Meanwhile, in another boost for the digital campaign, the BBC plans to follow
the success of its Freeview digital television venture by backing a free-to-air
digital satellite service.
In a progress report to the government the corporation recommended further state
intervention if ministers were to achieve "digital switchover" by 2010. The
BBC said the development of a satellite service would be "the final part of
the jigsaw" by capturing consumers unable to receive Freeview's digital terrestrial
signal and unwilling to pay for British Sky Broadcasting's subscription satellite
service.
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Murdoch:
no sales talks with Liberty
News Corp Chief Executive Rupert Murdoch says he is not in talks to sell assets
to John Malone's Liberty Media. "There's nothing for sale. We are happy," Murdoch
told journalists on Monday at a briefing during a conference organised by the
Milken Institute.
The denial follows Liberty Chairman Malone telling the Financial Times that
his company was in talks with News Corp. about acquiring international TV production
and programming assets in exchange for some News Corp stock held by Liberty.
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3G
loan agreed
The European Investment Bank (EIB) is to provide a loan of US$233 million to
Investor AB for the construction of a 3G network in Sweden and Denmark, one
of the first stand-alone UMTS networks to be developed in Europe by a new entrant.
The Hi3G project is a joint venture between the Swedish industrial holding company
Investor and Hutchison Whampoa. The two partners combine Investor's extensive
knowledge of local markets and relationships with a wide range of Swedish high
technology industries with Hutchison's sector experience.
Sauli Niinistį, Vice-President of the EIB commented, "The project is in line
with EU policies of promoting innovation and European leadership in advanced
technology such as broadband networks. EIB's commitment at this turning point
in the roll-out of 3G technology serves as a signal of the EU's support for
competition and innovation. Furthermore globally, the Nordic area has been a
pioneer in mobile telecommunications. The construction of a new and technologically-advanced
network with multiple applications will serve both Nordic consumers and businesses.
It is also equally important for the EU-based mobile telecommunications cluster.
The EIB has invested some US$2.7 billion over the last 10 years in the telecom
sector worldwide. Hi3G project is the first 3G project to benefit from the financial
support of the EIB.
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NDS
Q3 results
In a quarter heavily affected by the acquisition of DirecTV by its' parent News
Corp., NDS announced revenues for the quarter were £57.6 million (E87.2m) and
£156.2 million for the nine-month period year. This is 11% lower and 15% lower,
respectively, than the equivalent periods in the previous year.
Conditional access revenues were £23.7 million for the quarter and £79.9 million
for the nine-month period, compared to £41.9 million and £115.1 million, respectively,
in the equivalent periods of the prior year. "Last year, we shipped substantial
volumes of smart cards to DIRECTV for their card changeover" said the company.
"Since the expiration of our old contract with DIRECTV in August 2003, there
have been no card sales but we have received revenue from DIRECTV for their
use of NDS technology in smart cards which they have purchased from a third
party. Conditional access revenues include one month's conditional access services
income under the new contract with DIRECTV, which is based on the number of
authorized cards and subscribers. Subscriber growth from all platforms has continued
to be strong; we ended the period with 41.0 million authorised smart cards containing
NDS technology in use, a rise of 3.0 million in the quarter and 6.6 million
in the nine-month period. In addition to growth at DIRECTV, there has also been
substantial growth at Sky Italia and SkyLife in Korea."
Among the operational highlights, NDS listed:
DIRECTV renewed conditional access contract;
Shanghai Cable Network selected NDS VideoGuardŽ conditional access;
Two new digital platforms launched: FOXTEL (Australia) and Galaxy Satellite
Broadcasting (HongKong); Thomson SA and STMicroelectronics work with NDS to
develop and endorse SVP standard
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BSkyB
coy on James Murdoch's pay
With executive pay schemes under unprecedented scrutiny in Britain, satellite
broadcaster BSkyB won't say whether Chief Executive James Murdoch is getting
paid at all, reports Reuters.
Murdoch, the 31-year-old son of BSkyB Chairman Rupert Murdoch, started work
without a contract when he took the reins of Britain's dominant pay-TV company
from Tony Ball more than five months ago. His appointment was controversial,
given the family connection, and the company's reluctance to discuss his compensation
has irritated investors further.
A BSkyB spokesman said: "Discussions are continuing between James Murdoch and
the remuneration committee. BSkyB will make all required disclosures in due
course."
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SingTel
and SIP partnership for VoIP worldwide
SingTel has formed a strategic business partnership with SIPphone, Inc. to deliver
SIP (Session Initiated Protocol) VoIP services globally.
San Diego-based SIPphone currently offers worldwide Internet calling, without
additional calling charges, to its customers as long as both parties have SIPphones.
The SingTel and SIPphone partnership adds the ability for all SIPphone customers
to call phone numbers on traditional public switched telephone networks (PSTN),
including mobile phones, around the world.
SIP technology is the new standard for VoIP which allows users to make and receive
calls over the public Internet. To make a SIP call, users need to have a SIP
phone or SIP adaptor, connect it to a broadband Internet connection and dial
the desired phone number (SIP or PSTN).
With the partnership, SIPphone will leverage SingTel's extensive international
infrastructure for wholesale voice delivery and competitive wholesale termination
rates. SingTel will benefit from SIPphone's experience in the development and
delivery of SIP VoIP services and have access to hardware manufacturers who
are supporting SIPphone's »Plug-N-Dial' automatic configuration standard.
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LBO
fears increase Intelsat debt pressure
The credit spreads (the price of insuring bonds against default) of satellite
operator Intelsat have more than tripled in the past two days on worries the
company may be purchased by private equity investors through a leveraged buyout.
Intelsat said in a filing with regulators on Thursday it had postponed recent
buyout discussions to complete its planned $500 million initial public offering
by June 30, as required by the Federal Communications Commission. The talk of
a buyout caught bondholders completely off-guard and prompted a big sell-off
in Intelsat's bonds and a rise in its credit spreads, threatening to sharply
raise the company's future borrowing costs. Leveraged buyouts typically involve
the new owners issuing even more bonds to fund the acquisition, reducing the
value of outstanding debt.
Bermuda-based Intelsat said in a filing to the Securities and Exchange Commission
on Thursday that it had "recently had discussions with potential investors relating
to a possible investment in, or acquisition of, our company." In the filing,
Intelsat said it had quit those discussions due to the impending June 30 deadline
for completing an IPO but that "after the completion of this offering, we may
explore the possibility of another party's investment in, or acquisition of,
our company."
Intelsat's planned IPO is expected to be used for partially reducing the company's
outstanding debt load. Intelsat also said in the filing to the Securities and
Exchange Commission that it may "ultimately decide not to pursue any such transaction"
even when buyout discussions resume in the future.
Standard & Poor's rates Intelsat at BBB-plus with a negative outlook.
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NDTV
IPO five times oversubscribed
The Initial Public Offer (IPO) of New Delhi Television Ltd (NDTV), which opened
for subscription on April 21, has been oversubscribed by 4.95 times at the floor
price of Rs 63 per share for 17,30,1600 shares. The subscription may go up further
as the issue is not slated to close until April 28.
The IPO, which has been via private placement, will see the company issue fresh
equity and also offload some existing equity. NDTV, which launched two news
channels - one in Hindi and another in English - in April 2003 following the
end of its tie-up with Rupert Murdoch's Star Network.
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Alcatel
sets up Chinese venture
China's TCL Mobile says that it is to set up a joint venture with France's Alcatel
for the research and development, sales and distribution of mobile handsets
and related products and services. In the mobile handset marketplace, TCL Mobile
is one of the leading players in China with its highly recognized TCL brand,
extensive sales and distribution network, large and flexible manufacturing base
and fast-growing business in Asia.
Commenting on the partnership, Dr. Wan Mingjian, the Chief Executive Officer
of TCL Mobile, said, "This is an exciting partnership which will provide TCL
Mobile with a platform to rapidly grow our international business. We believe
this will help us to quickly achieve our objective to become one of the leading
global mobile handset manufacturers.
Philippe Germond, President and COO of Alcatel said, "with this operation, we
are making another important step in our strategy to focus on communication
solutions. As part of this strategy, Alcatel will maintain end-to-end mobile
solutions capabilities for its customers. And for its mobile phone business,
the newly created Joint Venture will benefit from an extended geographical reach,
an improved product portfolio together with large economies of scale. Synergies
created by the complementary nature of both shareholders' businesses will increase
competitiveness and financial performance."
The Joint Venture will be 55% owned by TCL Communication and 45% owned by Alcatel
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BSkyB
picks TANDBERG for Advanced Technology Centre
TANDBERG Television announced that it has secured an order from BSkyB to provide
the broadcaster with a range of digital compression solutions. The deal will
see BSkyB introduce a new TANDBERG Television MPEG-2 head-end installation with
16 compression systems for its Advanced Technology Centre, which is being created
to supplement BSkyB's existing broadcast facilities.
The deal builds on successful previous collaboration between BSkyB and TANDBERG
Television. The companies share a 10-year plus track record based on co-operation
and trust and their engineering teams have worked closely together to pioneer
digital pay-tv satellite technologies and services. BSkyB was one of the early
adopters of TANDBERG's MPEG-2 encoders during the 1990's.
As part of the contract TANDBERG Television will provide end-to-end systems
based on its industry leading MPEG-2 compression engine. The 16 compression
systems will each contain TANDBERG E5710 encoders, MX5640 multiplexers and TT1220
receivers, as well as control and monitoring.
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Tuesday
27th
April 2004
NTL
and Telewest coordinate broadband boost
Apollo
and JP Morgan to buy Primacom
Bush
wants cheaper broadband
MTV
joins Sony-Discovery platform and goes pay
Comcast
could drop bid for Disney
Canada:
Shaw straightens position in cable
ITV
takes out NTL News Channel stake
Ideal
World launches on Freeview
Leitch
adds test and measurement to its portfolio
NTL and Telewest coordinate broadband boost
In an obvious, but nonetheless "below the line", joint operation the UK's cablecos
NTL and Telewest have coordinated significant enhancements to their broadband
services to try and put the pressure on BT and other providers.
Although there are small differences in the two services, which do not compete
for customers, both have essentially increased their mid-tier offerings from
512Kps to 750Kps with no price increase (from £18, E24) and their high end form
1Mb to 1.5Mb for £38.
NTL said "This will provide a significant competitive advantage, offering the
highest speeds in the high volume entry-level and mid-tier sectors, while at
the high end, NTL will offer 50 per cent more speed than the main providers
of ADSL".
Existing speed New Price
Entry level 150Kbps 300Kbps £ 17.99
Mid Tier 600Kbps 750Kbps £ 24.99
High end 1Mb 1.5Mb £ 37.99
The move shows the cablecos anxiety to regain an edge over BT which has surged
ahead in the broadband connection market, and also their willing ness to cooperate.
Most observers still expect NTL and Telewest to merge at some point.
The competitive nature of the entry level broadband market is illustrated by
Wanadoo UK (previously Freeserve) announcement of a new service with 512Kps
speed and 2G download limit for £18, undercutting BT's Basic offer which is
£20 with a 1G download.
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Apollo
and JP Morgan to buy Primacom
From Dieter
Brockmeyer in Frankfurt
German cable operator Primacom is to be sold to BK Breitband Kabelnetz Holding
in Hamburg, a consortium of Apollo Management and JP Morgan Chase Bank. A final
decision on the sell-off will be made during a shareholders meeting in June.
The transaction is a blow to Kabel Deutschland (KDG), itself owned by financial
institutions, which has been looking to consolidate Germany's cable sector around
Deutsche Telekom's (DT) former network. Apollo has agreed to sell its stake
in the former DT owned Hesse cable operator iesy to KDG after the antitrust
authorities consent, but retained the interest it had purchased about half a
year earlier in Primacom, were it had taken about 40 per cent of the bonds issued
by the company.
It is expected that antitrust authorities will accept the consolidation of DT's
former cable network under the condition that the owners of the last mile networks,
such as Primacom, will have to stay independent. The sale will include all assets
of Primacom AG including all outstanding debts to the tune of E375 million.
A one-time cash payment of E5 million will be made to the Primacom shareholders,
which include UGC Europe (former UPC). Following the transaction the Primacom
AG legal identity will be dissolved with BK Breitband Kabelnetz Holding GmbH
taking full control.
Primacom currently has 1.3 million subscribers, one million of them in Germany
a further 300,000 in The Netherlands, where the company owns the Multikabel
network. The cable operator passes a total of two million homes.
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Bush
wants cheaper broadband
US President George W. Bush is asking the Congress to put a permanent ban on
taxes users pay for high-speed internet connections.
After a week focused on environmental policy, Bush's next election campaign
move is to promote his high-tech agenda, including plans to provide universal
access to broadband by 2007.
Bush reckons the USA is "lagging a little bit" when it comes to broadband and
high-speed connections. He reportedly thinks competition between broadband companies
is something to be encouraged, and that users should definitely not be taxed
in order to make broadband connections the norm.
Most computer users in the USA have dial up connections, and both Bush and Kerry
are pushing for wider broadband usage.
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MTV
joins Sony-Discovery platform and goes pay
From Shveta Malik in New Delhi
MTV Networks India has entered into a distribution agreement with The One Alliance,
a Sony Entertainment Television India (SET India) and Discovery Networks India
(DNI) joint venture, for distribution of MTV and Nickelodeon in the country.
MTV has also decided to turn pay for the first time in India. Both developments
will be effective from May onwards.
MTV and Nickelodeon channels complement the mix of programming choices offered
by The One Alliance says the company. At present, the bouquet comprises of eight
world-class channels: SET, MAX, AXN, HBO, Discovery, Animal Planet, NDTV India
and NDTV 24x7 and has established itself as a leader in providing complete family
entertainment, according to an official statement. The bouquet of channels reaches
over 40 million cable and satellite households across the nation.
Shantonu Aditya, president of The One Alliance, said that MTV will charge seven
cents per subscriber per month. Nickelodeon, too, will continue to be a pay
channel. The two channels - MTV and Nickeldeon - will be available on same price
per subscription per month.
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Comcast
could drop bid for Disney
Comcast is weighing up whether to withdraw its $58 billion hostile bid for Walt
Disney as the US cable giant's hopes of forcing the embattled media group to
the negotiating table fade, the FT reported.
The debate at Comcast comes as Disney Directors gather this week for a long-awaited
board meeting at which they are expected to debate a possible succession plan
for CEO Michael Eisner - whose contract is due to expire in 2006 õ amongst other
issues.
Disney shares rose sharply after Comcast unveiled its offer but have since given
up most of those gains. However, Comcast shares have remained under pressure
amid investor worries that the company might raise its bid. Based on Friday's
closing price of $28.92, Comcast's offer values each Disney share at $22.55.
Disney shares closed at $24.65.
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Canada:
Shaw straightens position in cable
From Gail Chiasson in Montreal
The Shaw family, which bought one million Class B non-voting shares of Shaw
Communications, Canada's second largest cable TV operator, last week, now owns
more than 20 million shares of the company that operates mainly in western Canada.
Founded in 1966 by broadcasting pioneer J.R. Shaw, Shaw's core business is providing
broadband cable television, Internet and satellite direct-to-home services to
approximately 2.9 million customers. The company has approximately 222 million
Class B shares outstanding.
The Shaw family also holds the majority of voting shares in both Shaw Communications
and in Corus Entertainment, a separate and distinct publicly traded corporation
founded in 1999 from the media assets of Shaw Communications.
Shaw Communications, which had revenues of more than $2.1 billion in fiscal
2003, recently struck a deal with US-based RemotePipes to provide worldwide
mobile Internet services for Shaw Internet customers in western Canada. Called
TollFreeISP, the new service will allow business travellers, infrequent users
of the Internet and rural users to access the Internet via wireless or wireline
telecom services in Canada, the U.S. and around the world. In an introductory
offer, all Shaw customers who register for the service are being given a 10-hour
free trial.
Shaw Communications also owns Star Choice satellite-TV operation.
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ITV
takes out NTL News Channel stake
ITV has bought NTL's 35 per cent stake in the ITV News Channel, giving it outright
ownership of the rolling news station. The 24-hour digital news channel experienced
its third successive yearly increase in audience last year. An average of 2.4
million viewers sample the channel each week.
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Ideal
World launches on Freeview
UK Shopping channel Ideal World which already broadcasts on digital satellite
and ntl:home's digital cable network has launched on Freeview channel 22.
In a statement, Ideal World said: "This is great news for the Company as it
expands our audience by a further potential three million viewers and is a major
coup to have been chosen, as there is a restricted number of channels. Ideal
World now broadcasts on all the digital platforms which means that whichever
broadcast platform viewers choose, they will be able to access Ideal World and
when the current analogue signal is switched off (currently predicted as 2010)
we will be available to the whole of the UK's 26 million households."
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Leitch
adds test and measurement to its portfolio
Leitch Technology, a supplier of high-performance video systems for the TV industry,
announced at NAB that it has entered into a definitive agreement to acquire
Videotek.
A privately held video equipment company, Videotek, specialises in test and
measurement products and is headquartered in Pottstown, US. The companies expect
to close the transaction in May 2004, and have agreed to a purchase price of
approximately $18 million cash. Leitch will fund this acquisition through its
existing cash balances.
"Videotek extends Leitch's position in the market to enable truly Integrated
Content Environments(tm) (ICE) that streamline workflow for broadcast and media
companies," the company said in an statement.
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Monday 26th
April 2004
European
broadband value to soar
Review
to clear BBC of online abuse?
Freeview
continues to boost UK Digital TV
Euro Parliament attacks Berlusconi's media power
TRAI
to recommend price cut for growth of broadband in India
AOL
to launch channel on TWC
Microsoft sets out Europe appeal
Cable
Execs create first all Gospel Music Channel
Scientific-Atlanta:
Q3 Results
Disney
on Hungary's mobile
European broadband value to soar
Revenues from broadband Internet access in Europe are expected to grow to E22.7
billion (£12.8 billion) in 2008 from E3.3 billion this year as its use widens
to 30 percent of households from eight percent, a report said on Thursday.
Some 45 million European households would have a broadband connection by 2008,
according to the report, prepared by a group of 20 leading communications companies
and presented at a European Union ministerial meeting in Ireland, current holder
of the EU presidency.
The technology, which allows high-speed Internet access, is seen as a key driver
of new business for telecommunications companies. The EU's Lisbon Strategy,
agreed in 2000, aims to make the Internet the main medium for the transmission
of information, communication, transaction and media in Europe by 2010.
The report, compiled with market research from PriceWaterhouseCoopers, said
some E77 billion of business was currently transacted online within the EU,
a figure expected to rise to 2.2 trillion euros by the end of 2006 - equivalent
to 22 per cent of the bloc's total industrial trade.
It noted that while the use of wireless broadband to access information and
applications from mobile devices was still in its infancy, total European mobile
content and service revenues were projected to grow to E45.6 billion next year
from E5.8 billion in 2002.
The report called on EU governments to speed up measures to make broadband access
cheaper for consumers - connection currently costs around 150 euros per user
- and to push ahead with combating unsolicited e-mail "spam" and making the
Internet more secure.
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Review
to clear BBC of online abuse?
The BBC's controversial internet activities are expected to survive largely
unscathed from a Government-commissioned review that will report in the next
few days.
The findings will anger the BBC's commercial competitors, which have accused
the corporation of using public funding to distort the marketplace for internet
news and current affairs sites. The pubcaster spends £100m (E151m) a year on
its internet arm, BBCi, which provides news, information and educational materials.
Many of Britain's leading media companies, including Emap, News International
and the internet arms of The Guardian, The Daily Telegraph and The Independent,
have joined together in the British Internet Publishers Alliance (Bipa) and
pressed for action to curb the BBC's online activities.
Philip Graf, the former chief executive of Trinity Mirror, was asked by the
DCMS to investigate the impact of the BBC's websites on commercial rivals and
whether this activity provided value for money and fitted in with the corporation's
public service remit.
It is thought that the BBC's commercial competitors have not been able to convince
him there is compelling evidence of market distortion or show a causal link
between the failure of a particular website and the BBC's provision of content
in the same area.
Graf will put forward options for reform of the BBC's internet activities and
ways to limit the areas that the corporation can legitimately address. However,
it is thought that he will not go for the more draconian options available to
him.
Instead the review is expected to recommend that BBCi provide more links to
external websites. It may also pose the question of whether some of the public
funding that goes to BBCi should be diverted to commercial operators that run
similar sites, or that some content should be outsourced to the private sector.
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Freeview
continues to boost UK Digital TV
Nearly half of all UK households are now receiving Digital TV, either by satellite,
cable or DTT. Recent gains are largely down to the growth of Freeview, according
to the quarterly DART (Digital Audience Research Tracker) survey by Ipsos-RSL.
UK Digital TV penetration has risen by 7% since September 2003 and 49% of homes
are now ready for a seamless switchover in 2010. Freeview now represents almost
a third of the UK digital market, and whereas previously its popularity appeared
higher amongst the older, more resistant generation, it now seems increasingly
to be perceived as a cost-effective introduction to Digital TV amongst all age
groups.
Despite the rise in the number of households receiving DTV, those without digital
are still showing little propensity to adopt within the next 12 months. The
main barrier is satisfaction with existing channels õ two-thirds of those rejecting
Digital TV state that they are »happy with the channels that I have at the moment'.
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Euro
Parliament attacks Berlusconi's media power
The European parliament has attacked the concentration of media power in Italy,
just days before the government of Silvio Berlusconi, the prime minister, is
due to push through a law viewed by critics as a boost to his extensive media
empire.
By a vote of 237 to 24 with 14 abstentions, the Strasbourg-based assembly adopted
a report that called for European Union-wide legislation to guarantee pluralism
in the media and singled out Italy for particular criticism. "The Italian system
presents an anomaly owing to a unique combination of economic, political and
media power in the hands of one man," said the report, prepared by Johanna Boogerd-Quaak,
a Dutch liberal.
Mr Berlusconi's supporters dismissed the report as biased and ill-informed,
and pointed out that centre-right legislators in the European parliament had
refused to take part in yesterday's vote.
The vote has no legal force but Forza Italia and other centre-right Italian
legislators in Strasbourg had worked hard to prevent its adoption. In the end,
fewer than half the European parliament's 626 members took part in the vote.
The report highlights the fact that Mediaset, the Berlusconi family's media
group, and Rai, the Italian state broadcaster, attract about 90 per cent of
the national television audience as well almost all television advertising,
a sector in which the Berlusconi empire is also the market leader.
As prime minister, Mr Berlusconi is widely viewed as having an unfair advantage
with regard to influencing the content of news and current affairs programmes
on Rai. Domestic concern about Mr Berlusconi's dual role as premier and billionaire
media magnate was highlighted last December when Carlo Azeglio Ciampi, Italy's
head of state, refused to sign into law a government bill on the media sector.
The bill, which many experts in Italy say will entrench the market leadership
of Mediaset and Rai, was redrafted and is poised to become law next week.
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TRAI
to recommend price cut for growth of broadband in India
From Shveta Malik in New Delhi
In an effort to boost broadband services, the broadcasting and telecom sector
regulator Telecom Regulatory Authority of India (TRAI) is planning to reduce
the cost by five times to US$14 per subscriber per month. The regulator will
soon come out with the final guidelines for offering broadband services, reducing
the current broadband service monthly rate of US$70. India currently has a very
low broadband penetration of two per 10,000 persons.
The regulator expects broadband growth to mirror the trend in mobile telephony
where the sharp tariff cuts sparked greater usage and increased subscribers.
The TRAI has plans of allowing private operators and internet service providers
to use the last-mile copper link to home in order to offer broadband services
owned by state-run Bharat Sanchar Nigam.
"We hope the government will soon approve the guidelines. The country witnessed
an explosive growth in mobile telephony when the price was set right by the
market and we expect the same to happen here" said Pradip Baijal, chairman of
TRAI.
Broadband services in India are projected to receive $2.6 billion investment
by 2006, according to India's Broadband Economy: Vision 2010 study released
by the Confederation of Indian Industry (CII) and Ministry of Communications
and Information Technology (MCIT). The report stated that India should target
a minimum of 10 million urban subscribers by 2010 and 35 million by 2020.
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AOL
to launch channel on TWC
America Online, the world's largest Internet service provider, has made a marketing
deal with corporate sibling Time Warner Cable that will lead to the creation
of an AOL-related digital cable channel.
The new channel, My MC, will let digital cable customers in 16 markets watch
music video programming on demand, by clicking a remote control. Programming
will come from a broad range of artists from Sony Music Entertainment, Universal
Music Group and Warner Music Group that was once only available on AOL's own
high speed Internet service.
The service, which will be free to current digital cable subscribers, launches
in May. The deal appears to be another attempt to smooth over previous bad relations
between the online unit of Time Warner Inc. and the rest of the company. In
the past year and a half, AOL has also struck deals with several Time Inc. magazines
to offer exclusive stories on the AOL service.
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Microsoft
sets out Europe appeal
The European Commission's landmark decision against Microsoft last month is
out of step with legal precedent, business realities and a US settlement, the
company is set to argue in court, reports the FT.
A briefing note the company has circulated to its lawyers and economists, and
now made available on its website, it sets out the arguments Microsoft is likely
to use in its appeal, due to be lodged in early June.
The Commission ruling against the company for abusing its Windows monopoly is
set to be published as early as on Thursday but has already been seen by the
FT.
The Brussels body says Microsoft choked off competition in the markets for server
systems by denying its rivals interface information and illegally "tied" its
Media Player program to Windows, reducing demand for rival products.
The company's response accuses Brussels of "seeking to make new law . . . reducing
incentives for research and development that are essential to global economic
growth".
The Commission decision says: "Microsoft interferes with the normal competitive
process which would benefit users in terms of quicker cycles of innovation due
to unfettered competition on the merits." The Commission cites market surveys
that indicate users took up Microsoft products despite rating rival products
more highly. It also says that it cannot wait till the company's practices have
eliminated all competition because "at that point Microsoft could no longer
be subjected to any meaningful antitrust remedy".
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Cable
Execs create first all Gospel Music Channel
Prominent cable executives Charles Humbard, former senior vice president and
general manager of Discovery Networks, and Brad Siegel, former president of
Turner Entertainment Networks, have teamed to launch the Gospel Music Channel,
the first television network of its kind dedicated to all forms of the gospel
music genre. Humbard will serve as president and chief executive officer of
the Gospel Music Channel while Siegel will serve as vice chairman.
The advertiser-supported network, scheduled for a fourth quarter 2004 launch,
is targeted to the underserved and passionately loyal gospel music market. The
Gospel Music Channel is being financed by two private equity firms experienced
in media investing: Alpine Equity Partners L.P. and Constellation Ventures (a
Bear Stearns Asset Management Venture Fund). Moreover, the channel has finalized
an agreement with a major MSO to pursue carriage on its systems throughout the
country.
The Gospel Music Channel's headquarters will be based in Atlanta with additional
production offices in Nashville. The network's programming strategy will capture
the rich history and modern influence of all gospel music styles and genres,
including adult contemporary, inspirational, praise and worship, urban and R&B
gospel, southern gospel, country, rock, Latin, instrumental and children's.
While the Gospel Music Channel's primary target audience will be Adults 25-54,
the channel will feature music video blocks, artists' biographies, music specials
and live concerts programming that will also appeal to the large and diverse
national gospel audience. The schedule will be strategically day-parted to reach
teens, tweens and even children.
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Scientific-Atlanta:
Q3 Results
Scientific-Atlanta, Inc reported that third quarter earnings of $54.0 million,
or $0.35 per share, increased by 101 percent from last year's third quarter
earnings of $26.8 million.
Sales of $437.0 million in the third quarter increased by 14 percent from the
same period last year. Earnings in the quarter ending April 2, 2004 included
an after-tax gain of $1.5 million related to the sale of an equity investment.
Last year's third quarter earnings included after-tax charges of $6.9 million
related restructuring expenses.
Third quarter bookings were $448.0 million, an increase of $108 million, or
32 percent, from last year, but a slight decrease from last quarter. The year-to-year
increase was driven primarily by orders for Explorer 8000 digital video recorder
(DVR) products and high-definition set-tops. After the end of the quarter, the
company received an order from Cablevision Systems that included the Explorer
8300 DVR product.
Third quarter transmission product bookings, including satellite products, were
$117.9 million, a decrease of six percent from last year, but a slight increase
sequentially.
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Disney
on Hungary's mobiles
Walt Disney Internet Group and Hungarian mobile operator Pannon GSM have entered
into a content distribution arrangement that will bring Disney Mobile branded
wireless content to Hungarian consumers.
The Disney Mobile service includes a broad range of ring tones, logos, wallpapers,
picture messages, MMS and java games. The content is based on Disney's lineup
of classic characters, including Mickey Mouse, Minnie Mouse and Donald Duck,
as well as on characters from modern classics, such as Beauty and the Beast,
The Lion King, Lilo and Stitch, and Disney/Pixar's Monsters, Inc. and Finding
Nemo.
Consumers can download monophonic ring tones and black & white picture images
for approximately US$1.40, with colour images and polyphonic ring tones available
for approximately US$1.90. A range of Disney java games will also be available
to download to suitable handsets for US$3.30. Pannon GSM's first major campaign
to promote their new Disney Mobile service will coincide with the release of
Finding Nemo on DVD and VHS in Hungary.
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