NEWS Monday Jan 22nd - Sunday Jan28th

MONDAY 22 JANUARY 2001

New Zealand's second-ranked pay TV provider Telstra Saturn has snatched the rights to exclusively televise coverage of the country's legendary rugby team, the All Blacks' overseas tour later this year.

Saturn said that it would carry coverage of the All Blacks tour to Argentina, Ireland and Scotland, beating off a bid from pay TV rivals and incumbent rights holders Sky TV.

The news has caused disquiet in New Zealand where rugby is the national sport and the All Blacks are worshipped. Not only is Sky TV currently seen by only 24,000 homes in the capital, Wellington, and in the third-largest city, Christchurch, but there is no guarantee that the games, or even highlights will be carried on free-to-air TV, the first time this may happen.

Sky TV, which dropped out of the bidding race when the price for the All Blacks tour exceeded $1.3 million, has 380,000 subscribers. However it is starting to face significant competition from Saturn which is currently spending $450 million to build an access network linking the countryØs major cities, including the largest, Auckland.

Saturn offers pay TV, voice, data, mobile telephony and the Internet, to subscribers and it insists that the All Black rights coup is merely the start of an aggressive period of growth.

Chief executive Jack Matthews said Saturn had invested $220 million in infrastructure spending and planned to spend another $440 million over the next four years.

"In the context of spending that amount of money between now and 2005, spending a few million on sport is not particularly painful. We have sent a message to the market in a very clear and tangible way that we are in the game," added Matthews.

One potential hurdle for Saturn is that both the deputy Prime Minister and the oppositionØs sports minister have voiced their concern about the deal.
The former has stated that he might introduce legislation to guarantee that major sports events are carried on free to air TV, like they are in neighbouring Australia.

Orbit loses Zilo
By Chris Woodman

Alexander Zilo, president of Middle East pay-TV platform Orbit has resigned his position with the company. Prince Fahd bin Khalid, Orbit's chairman, made the announcement to staff at the company's Rome headquarters over the end of year holidays. His immediate replacement is Neal Johnson, a long-term senior director of the Mawarid Group, which owns Orbit.

Johnson, who is Mawarid's legal counsel, will fulfil an interim role pending the hiring of Zilo's replacement. It is understood that Zilo's decision to go was a personal one, and, "he is very relaxed," said an insider. "He fully appreciates that there will be all sorts of rumours over his departure, and no doubt the conspiracy theories will quickly follow. But there was absolutely no acrimony whatsoever in his going and he could well re-surface within the group with an amplified and more strategic role."

Zilo joined Orbit some eight years ago, setting up in preparation for the platform's 1994 launch. Zilo has been one of the Middle East's most influential broadcasting characters. It is fair to say that some of Orbit's originally controversial programming has been directly responsible for beneficially altering the whole shape of a broadcast schedule. Orbit's on-air look quickly became the benchmark for other broadcasters in the region, and their shows much imitated by other networks.

Prince Fahd, in his memo to staff, said, "Orbit faces an exciting new year, a year in which we expect to see marked improvements in the company's financial structure, a new focus on marketing, and the introduction of new services." Johnson took over on Jan 15. An Orbit insider stressed that Johnson has been a member of Orbit's board for some time and has detailed experience and knowledge of Orbit.

It is understood that Zilo will stay involved with Mawarid for at least another year. Orbit has had to face some considerable challenges over the past few years, and reports of Zilo's impending departure have been frequent. But, as one insider said last week of Zilo, "He is a strong character and companies like ours need that sort of leadership."

Orbit has been expected to introduce fully DVB-compliant set-top boxes later this year, and last autumn Zilo called for closer co-operation between the various rival pay-TV platforms in the Middle East, saying that they risked, "bleeding to death" unless some sort of broadcasting rapprochement came about.

Rogers @Home plagued by problems
ByNoel Meyer

Canada's largest cable company, Rogers, with 2.2 million subscribers and more than 300,000 cable modem subscribers, has said that it plans to break away from the @Home Internet backbone and build its own to replace the service.

On January 18 Rogers Cable CEO John Tory said that the company would look at building its own network to replace the troubled @Home network or see how it could take over network management of the Canadian portion of @Home.

Rogers has reluctantly admitted that 20,000 Rogers@Home subs could not access the Internet between January 14-16.

The cause of the problem is supposed to be a faulty router switch in California but Rogers' Internet subs in Toronto have been complaining about poor service since November, claiming that access to the, "always on," Internet service has been erratic and random.

JR Shaw CEO of Shaw Communications, Canada's second largest MSO, is in the process of finishing a pan-Canadian Internet backbone to replace his company's use of the @Home facilities when his contract with @Home expires in 2002. Shaw has said that the Toronto outages merely reflect that @Home is an unreliable network. Shaw started building its network last year after it suffered through too many @Home breakdowns. Shaw used Rogers recent troubles to float the idea of forming an all Canadian high speed service. Both Shaw and Rogers were among @Home's original investors.

US cablecos escape double carriage requirement?

The Federal Communications Commission has decided against requiring cable operators to carry both digital and traditional television signals and ordered commercial stations to select what channels they will use within digital systems by December 31, 2003 and non-commercial stations by December 31, 2004.

The FCC is anxious for cablecos to move from the analogue band to digital because it plans to begin auctioning off the airwaves to wireless communications companies in a couple of months.

Broadcast stations are moving from analogue signals to digital, a process to be completed by 2006 as long as US consumers buy the necessary equipment to receive the signals.

Television broadcasters had hoped the FCC would require the cable operators to carry both their analogue and digital channels during the transition but cable operators argued that it would squeeze out other stations.

An analogue or digital broadcast channel can assert its rights under US law, known as 'must-carry', to be put on cable systems in their local areas.

The Consumer Electronics Association has estimated 625,000 digital television sets were sold to dealers in 2000 and expected 1.1 million sets to be sold this year, a sign that the technology may be catching on despite the high cost.

Eutelsat expansion follows 45% revenue boost
By Chris Woodman

Eutelsat's 2000 income grew from $469 million to more than $670 million in 2000, an increase of 45 per cent. Eutelsat's director general Giuliano Berretta said 2000 had been, "superb," in terms of its financial performance, setting what he believed to be, "world record," for any comparable company, and explained that his organisation now has five satellites in its planning portfolio, and, "All five are needed urgently," he added. Moreover, 'E-Bird', destined for 25.5 deg East will almost certainly be an HS376 'Spinner' from Boeing/Hughes, the first-ever American satellite procured by Eutelsat. It will be launched in some 15 months.

2000 saw three launches, "now all full," says Berretta. "We need satellites. We are in a hurry and have scheduled a meeting for early February to give final approval" to the manifest, says Berretta. Besides E-Bird, Eutelsat is already proceeding with Hot Bird's 8 and 9, designed to replace earlier Hot Birds and provide in-system back-up as well as add extra Ka-band capacity. A sister craft for W3 (W3A) at 7 deg East, also needed "in a hurry" according to Berretta.

Berretta also revealed that co-operation talks are underway with Spain's Hispasat. Asked if there is a strong possibility of these talks leading to closer harmony between Eutelsat and Hispasat, Berreta replied, "Absolutely. I am convinced of it but realising it will depend on many factors."

Eutelsat is kicking off 2001 in what director general Giuliano Berretta describes as a splendid position. With three successful launches last year the organisation enters its privatisation year in good shape. Eutelsat will be privatised on July 2, with an IPO required to be carried out within two years.

2001 also sees three launches in its schedule, and in December 2000 Eutelsat added another five planned craft to its launch manifest: Eurobird, Atlantic Bird 2 (mid-year launch) and Atlantic Bird 1 (end of year launch) are the most immediate, with perhaps the most important being Eurobird, now slated for March 2.

Eurobird is effectively co-located at Astra's second orbital position 28.2 deg East. "Eurobird's total capacity is 24 transponders, less 11 which are designated for the German market. As to the 13 remaining transponders, we are not yet certain which final users will be broadcasting, and which will be using capacity for multimedia."

Atlantic Bird 2, an Alcatel craft, also has the role of being Eurobird's replacement in the event of failure, although its final destination is 8 deg W, and sharing the spot with France Telecom, "Because this is a continuation of Telecom 2A," says Berretta. "It will have 26 transponders, and Telecom 2B will remain in position with its 11 transponders giving 37 in all. A few of them are cross-Atlantic with switchable facilities covering the East coast of North America and practically the whole of South America simultaneously. As soon as Eurobird is up then we will start commercialising AB2, because its first mission at the moment is to back-up Eurobird.

"Eurobird has priority for continuity of the Kopernikus 2 mission, currently carried out by ten tsp on Eutelsat II-F4, which is now operational and in stable orbit until the middle of the year when it will slightly decline. We are protecting Kopernikus 2 which has gone out of full service and is in inclined orbit."

Berretta revealed that Atlantic Bird 1 is subject to what he called a 'happy delay.' "We have managed to increase the number of transponders from 20 to 24 transponders. We are highly confident of winning a good market for these platforms. With AB2 on station we did not need to worry so much about having all the capacity available on the same day."

However, one of AB2's primary missions is targeting Brazilian traffic to and from Europe and thus treads commercially on Hispasat's sphere of influence. Eutelsat recently opened a subsidiary company in Rio, although Berretta confirmed that much-rumoured talks between Eutelsat and Hispasat are a reality and he hoped would lead to closer links between the two outfits. If that happens then Hispasat's valuable 61 deg West location would be more than casually useful to Eutelsat.

The Hispasat dialogue revolves around the establishment of a joint-venture company would attack 'the Americas'.

Following AB2 and AB1 into orbit about 15 months from now to 25.5 deg East will be Eutelsat's first-ever American-built craft, an HS376 Boeing/Hughes 'spinner' and dubbed 'E-Bird'. Normally the spinners are less attractive commercially but, says Berretta, "Thanks to some very clever people here and at Hughes, we are bringing something very new onto a satellite. The craft is specifically configured for the Internet, and it will be different from the Astra craft which has one beam centred on Germany.

"We are also looking very closely at ArabSat, which has priority at 25.5 deg East. So our design has to be a little special. It will cost us more than a conventional spinner, and this is now the subject of our negotiation. But it will be more complex, in that it is not a simple 'tomato can' design with the open top reflector. Superficially it looks the same, but it has a complex beam-forming network driving its output."

"It means the spinner will have multiple beams with high duality over different areas, with lower strengths over some areas like the Kopernikus region," explained Berretta. "This means we will not be a problem to our German friends, or causing problems for our competitor in Luxembourg which are also friends of our friends. The satellite's design allows for a 2 degree separation, which is quite normal in America but not so common here."

Beretta does not expect 2001's income rise to be anything like 2000's 45 per cent improvement. "2001 is a year of consolidation, and introducing the new craft to the fleet," he says.

But Berretta is also proud of Eutelsat's success in winning a major slice of 'New Economy' business. At the recent Paris Broadband 2000 conference,
Astra's Romain Bausch said they had 144 transponders (more now with 2D) in position with about 10 per cent of that capacity used for non-broadcast applications, or about 14 transponders. Eutelsat's inventory numbers 320 transponders. "We have, from our 320 transponders, 41 per cent is used for Internet backbone, B2B communications, VSAT, etc, or 140 transponders. In other words in the New Economy we already have ten times more capacity utilised than Astra," says Berretta.

Globecast Eurbird multiplex launch
By Chris Woodman

France Telecom-owned satellite service provider Globecast says it will beam a new digital multiplex of channels to the UK from Eurobird, "and we may be taking extra capacity," says CEO Sarah Williams. "We have signed Extreme Sports already, and they will seamlessly transfer from Astra to Eurobird. We also have a number of other customers who have shown interest, including some which have put down a deposit. We are still in negotiation, but when Eurobird is in position we see ourselves with at least one multiplexed transponder fully booked." One of those channels is also known to be EuroNews, which has taken 4MB of capacity, for a minimum period of five years.

Globecast's philosophy regarding Eurobird is always to be seeking to add value for its broadcast clients. "The interesting positioning of Eurobird with Astra opens up extra bandwidth, not only to newcomers but to existing broadcasters. Clearly we can now offer capacity to somebody perhaps wanting to launch a channel at just 2MB, or 4MB, and buy on a piecemeal basis with us offering a complete service including uplinking, and offering a full service for them. In the process we make the total package a very cost effective way of buying into a prime market DTH position."

"I am not a broadcaster," says Williams, "But I feel I can stick my neck out and say that from where I sit the way the broadcast market is developing at the moment it seems that ALL the broadcast majors are busy developing add-on services. From that regard they are all looking to diversify into new multimedia, interactive, tele-shopping-type services of one style or another. Some of them are even developing genuinely new, and fresh, product lines designed to add value, simply to remain viable, and I see this sort of movement as essential to them holding onto their brand, their broadcasting shelf-space if you like."

She also believes there are still opportunities for niche digital channels to emerge. "From our own business perspective I hope that niche channels will continue to grow and prosper, because this will mean growth for us and our market. But you do see an interesting historical evolution of niche channels. A few years ago you had the Weather Channel launch here, and it failed. If it launched here now, with the much lower costs of getting to that market, it is easier to see a much better chance of being successful. My point is that the dynamics of the market, with additional bandwidth from services like Eurobird, providing cost-effective pricing methods, even for small amounts of capacity means that oneØs entry to market, at least as far as our type of service is concerned, is significantly reduced. So I see a huge future for niche channels that get their business model and consumer offering right. You can see all around that the chances of success - for these niche services - are stronger."

TUESDAY 23 JANUARY 2001

Egmont CEO creates sensation by sudden resignation
BSkyB invests in online venture
France telecom cuts its debts
Cisco provides UPC with finance
FCC under attack
Cable & Wireless wins $100m deal
Einstein.tv goes live
Prodigy's shares to jump 28%
New nominees for AOL
Media-Most to reach $300m deal
Nokia's US subsidiary to buy Internet security firm
Pann telecom maximises its fibre
Government attacks Channel4 sale's plan

Egmont CEO creates sensation by sudden resignation

A major bomb exploded in the middle of the Nordic media arena last week (January 20), when Jan O Froshaug, CEO and MD of the Egmont group, one of the biggest and most influential Nordic media operations, suddenly announced that he will resign at the next meeting of the board of the Egmont foundation in April.

Everyone within Egmont - and outside - was taken totally by surprise: Froshaug has been steering Egmont successfully through troubled waters for 14 years and made the company into 'Scandinavia's biggest entertainment media group and Europe's leading publisher of books and magazines for children, as the Egmont chairman, Ivar Samren commented in a press release from the Egmont head-quarters in Copenhagen on Friday.

Some Danish press commentators hint that the falling revenues of Egmont in later years might have contributed to Froshaug's decision to step off. Turnover has increased constantly, but profits have not followed this positive trend, largely due to heavy investment in new media. As Samren puts it, "We are now entering a new phase of strategies, and part of that is to increase profits."

Egmont (formerly Gutenberghus) is one of Scandinavia's oldest media operations, and started as a printing-publishing operation. Like its rivals, Egmont has recently expanded heavily into television, film and now new media such as the Internet. The Egmont group runs Denmark's biggest film and television production studion, Nordisk Film (also established in the other Nordic countries), is Denmark's biggest cinema owner and sits on one of the biggest Nordic film and television libraries. On the publishing side Egmont has established relationships with the Walt Disney company. Egmont is also one of the major shareholders of Norway's biggest private television station, TV2. An interest in Finnish Nelonen (Channel 4) was recently sold off.

The news of Froshaug's departure has immediately sparked speculation in his native Norway: the 58 year old Froshaug is now suddenly the hottest candidate to succeed Einar Forde as director general of public service radio and TV operator NRK.

Cable & Wireless wins $100m deal

Cable & Wireless Plc has won a $100 million deal to supply voice, data and Internet services to Rupert Murdoch's News Corp for three years.

"What impressed us most was the company's global reach, it has a strong presence in all the countries where our companies are based, in particular the US, UK, Asia and Australia," said Joseph Burke, News Corp's vice president of telecommunications.

Einstein.tv goes live

Einstein.tv, the TV and web brand dedicated to cutting edge science and technology will go live in the UK on January 25, 2001.

The channel's schedule will be structured around four key genres, Space, Technology, Earth and Life, in a format of a rolling information service, comprising informative updates on science and technology projects, item of news, interview and events.

In the meantime Einstein Channel PLC has just completed the acquisition of television Education Network, a B-to°B distance learning company.

Steve Timmins, Einstein Channel's CEO, said, "Ten Limited is a company we have been targeting for the last six months. Purchasing TEN's business provides us with a platform to deliver TV programmes in a business to business environment."

Prodigy's shares to jump 28%

Shares of retail Internet service provider US Prodigy Communications Corp jumped more than 28 per cent after it revised strategic and market pacts with major shareholder SBC Communications Inc, a local telephone high-speed digital subscriber line service provider.

Prodigy said it sees 2001 EBITDA in the range of $31 million to $34 million, or 44 cents a share and 49 cents a share, respectively. Prodigy expects its Internet service to have 3.1 million to 3.7 million subscribers by the end of 2001.

Many ISPs have been struggling to gain leadership in the high-speed Internet service market, diversifying their revenue bases from just dial-up access where AOL Time Warner dominates the market.

"These new agreements put Prodigy in a stronger financial and marketing position by greatly reducing operating expenses, accelerating Prodigy's path to profitability, and giving Prodigy the resources to become one of the best portals and retail Internet service providers in the country," said Charles Foster, Prodigy chairman, CEO and president.

The companies said the agreements call for SBC to deliver Prodigy's Internet service to at least 3.75 million digital subscriber line subscribers and 375,000 dial-up subscribers over the next nine years.

New nominees for AOL

Ray Oglethorpe, previously president of AOL Technologies, will become president of Internet unit AOL Inc while Barry Schuler, formerly president of AOL Interactive Services, has become Chairman and Chief Executive Officer of AOL Inc.

Oglethorpe's responsibilities will include the CompuServe service, Netscape browsers and software development for the AOL client and AOL products.

Schuler will oversee the AOL brands, the AOL flagship service, AOL International, AOL's popular instant messaging services, AIM and ICQ, as well as local services such as AOL Moviefone, DCI and MapQuest.

Media-Most to reach $300m deal

Christopher Renaud, Media-Most's head of finance and strategic investment, said that a financing deal of at least $300 million could be reached within weeks if the Kremlin guaranteed there would be no political interference.

"Everything rests on whether they hear what they want to hear from the administration," he said. "If they get a phone call that says 'Please come now, put in the money, we won't bankrupt all the companies, we won't throw you in jail the first time you set foot in Russia, we won't take away the licence,' the deal could be funded and signed in four to five weeks."

Turner issued a statement this week saying he was interested in buying a stake in NTV, which has been critical of Kremlin policy, and that he was waiting for a reply from Putin.

Turner's representatives had been told at Kremlin talks that no guarantees could be provided.

Nokia's US subsidiary to buy Internet security firm

Finland's Nokia the world's largest mobile phone maker, announced yesterday (January 22) that its US subsidiary Blackbird Acquisitions Inc had completed its purchase of US Internet security firm Ramp Networks, which makes Internet security products for small offices.

92.6 per cent of Ramp's common stock had been tendered into the offer, priced at $5.80 per share. The deal was originally valued at around $123 million.

Penn telecom maximises its fibre

Fujitsu Network Communications announced that Penn Telecom, Inc. maximised more than 300 miles of fibre optic cable through new and upgraded SONET facilities that feature the FLASH 600 ADX.

Penn Telecom has improved market coverage, boosted network utilisation and the reliability of its competitive local, broadband and long distance services in Western Pennsylvania. Their Fujitsu-enhanced network now allows Penn Telecom to quickly provide reliable, high-bandwidth services to any customer on its network without using the facilities of another carrier.

The core of the Penn Telecom network consists of multiple FLASH600 ADXs optically interconnected on a Unidirectional Path-Switched Ring. Each of these FLASH600 ADXs serves as a gateway for multiple OC12 UPSR carrier access rings, which contain multiple Fujitsu FACTRç, FLM 150 ADMs and other FLASH600 ADXs.

"The FLASH600 ADX enhancement clearly puts Penn Telecom on the short list of facility-based carriers in Western Pennsylvania,'' said Frank Macefe, president of Penn Telecom. "Penn Telecom has always prided itself on providing evolving, high quality of service to its customers. Fujitsu's line of SONET products has allowed us to meet our customer's expectations for the last seven years.''

Government attacks Channel4 sale's plan

UK Pariliamentary opposition plans to raise £2 billion by privatising Channel 4, the television station, have been attacked by the government and considered, 'a disaster' for the British culture.

Chris Smith, culture secretary, said ending Channel 4's status as a non-profit making public service broadcaster would starve the station of investment.

WEDNESDAY 24 JANUARY 2001

News Corp to sell Fox?
Suez Lyonnaise buys Canal Plus stake in Paris Premiere
nCUBE to pass certification testing
EMS Technologies' new vice president
Altera teams with Alcatel
UPC and Cisco to build cable voice over Internet
First female chairman of NRK recruited from its own ranks
McIntyre leaves Discovery Comm
Spanish Via Digital goes on cinema
Telecom Italia to face Antitrust Authority
AT&T and DoCoMo start their alliance
NTL to face Irish telecom regulatory

News Corp to sell Fox?

News Corporation may sell Fox Family Worldwide to rival media giants Viacom or Disney.

A potential price of about $1.5 billion in cash has been suggested by Haim Saban, Murdoch's partner in Fox Family who required News Corp to buy him out of his 49.5 per cent stake in the business.

The prospect of Saban exercising his option last month prompted Standard & Poor to threaten downgrading the News Corp credit rating to 'junk' status.

Disney and Viacom are seen as the two most likely candidates to buy Fox Family. An executive at News Corp said the company had several options, but would not be drawn on whether discussions with Viacom or Disney had taken place, simply stating, "It is still very early days."

The sale of the business could suit News Corp as it concentrates on its main target, DirecTV, the US satellite broadcaster.

Selling out of the business, estimated to be worth about $3bn without debt, could deliver extra cash resources for Murdoch as he pursues the DirecTV deal.

Suez Lyonnaise buys Canal Plus stake in Paris Premiere

The French communication and water utility group Suez Lyonnaise des Eaux has acquired a 15 per cent stake in thematic channel Paris Premiere, which had been held by Canal Plus group, as well as the stakes that had been held by its own subsidiaries Lyonnaise Communication (53.85 per cent) and Paris Cable (4.5 per cent).

This brings Suez Lyonnaise's stake in the channel up to 73.35 per cent. The value of the transaction between Suez Lyonnaise and Canal Plus was not disclosed. The other shareholders, the Marie Claire magazine publisher and M6 Thematiques, the theme channel subsidiary of terrestrial channel M6, have retained their existing shares of 15.99 per cent and 4.5 per cent respectively.

Paris Premiere is one of the oldest French thematic channels, dating back to 1986 when channels were devised to provide content for the fledgling cable networks. It carries a mixture of Paris based events and general entertainment.

Following its management shake out at the end of last year, Canal Plus is reconsidering its participation in thematic channels, with the intention of concentrating more on films, sport and news. It recently sold its 50 per cent stake in games channel Game One, and its stake in Eurosport to its rival TF1, however it is planning to set up its own sports channel next year.

nCUBE to pass certification testing

nCUBE Corporation, a US-based provider of scalable streaming media infrastructure, announced yesterday (January 23) that its n4 streaming media appliance has passed the Network Equipment Building Standard Level Three certification testing.

Internet and telephone carriers rely on NEBS certification to ensure the operating performance and safety of equipment that is deployed in their network facilities.

NEBS compliance will allow nCUBE to continue meeting the stringent operating requirements of these and other carriers around the world.

The NEBS certification process involves a suite of tests designed to evaluate network equipment in a variety of possible environmental conditions associated with telecommunications facilities. The n4 streaming media appliance was certified under the NEBS criteria for Personnel Safety, Property Protection and Operational Continuity.

"We are proud to provide Level Three NEBS-certification to our customers who rely on nCUBE streaming video technology," said Dan Sheeran, nCUBE's Senior Vice President of Products and Strategy. "This certification provides the highest level of assurance to our present and potential customers that our products are reliable and safe to use in the most challenging environments."

EMS Technologies' new vice president

EMS Technologies Inc nominated Jay R Grove as vice president and general manager for EMS Space & Technology Group- Atlanta.

Grove will be responsible for leading the day-to-day operations of the Atlanta space organisation, which designs and manufactures technology products for ferrite, microwave and antenna subsystem markets.

Grove joins EMS with more than 14 years of experience in engineering, program management, and business development in the avionics and satellite communications industries.

"Jay is a dynamic manager, who brings a strong engineering background coupled with solid success in both the commercial and military worlds," said Dr Bush. "Jay will help us evolve our product lines and improve our competitive position in the marketplace."

"I'm very pleased to join EMS Technologies," said Grove. "I look forward to working alongside the tremendously talented EMS Technologies team to ensure we consistently satisfy our customer-centric objectives."

EMS' other Space and Technology operations, located in Montreal and in Ottawa, Canada, serve the commercial space and wireless markets. They focus on the areas of: antenna, digital and microwave products and subsystems, optical products and broadband communication equipment.

UPC and Cisco to build cable voice over Internet

United Pan-Europe Communications NV and Cisco Systems have signed a letter of intent to build the first cable Voice over Internet Protocol (VoIP) communications network in the European Union.

Cisco and UPC have intend to use the existing UPC cable network for the offering of Vo-IP services. The three-year project will cover a minimum of five cities and will allow up to 500,000 residential customers to use the new service. The integration of the VoIP solution will be undertaken by CiscoØs Âecosystem partnerØ KPMG Consulting (Europe), which has significant expertise in this leading technology.

UPC will be able to make significant cost savings compared to the traditional way of offering telephone services over cable networks, allowing operators to provide high-quality services at very competitive prices. The benefit of VoIP over traditional communications structures is that subscribers can access a wide range of voice services, in addition to the delivery of data services, such as High-speed Internet access, using a single, unified communications structure, across one customer provisioning system.

John Riordan, President of UPC said, "This letter of intent reaffirms our 'triple play' strategy of creating shareholder value by providing the most comprehensive and high-quality voice, data and video services for business and residential customers. UPC strongly believes in VoIP as a successful and leading world standard and is actively building all of its networks to be VoIP-compatible."

William Nuti, Senior Vice President of Cisco Systems, Europe, Middle East and Africa added, "Voice over IP is a 'future-proof' technology, which has matured for implementation on a pan-European scale. It will offer operators a new business model through which they can deploy and operate a single, multiservice broadband network. We have worked with UPC for around five years, and we are delighted to continue helping them deliver on their commitment to providing their customers with the foremost broadband network and the very latest in voice, video and data services."

First female chairman of NRK recruited from its own ranks

The present leadership crisis at NRK, Norway's public service TV and radio broadcaster, has been solved. The board of the company is now complete again, after the sudden and dramatic resignation of the chairman of the board, professor Torger Reve, who announced his resignation two weeks ago, claiming that leaks to the media about the board's activities had 'seriously jeopardised the work of the board'. Reve and the rest of the board were appointed last summer.

The Minister of Culture, Ellen Horn, reacted rapidly to the emergency situation. Despite frequent rumours that the 'leaks' were not the only reason for Reve to resign; the board has apparently already been torn apart in two camps, one focused on modern business administration, a Reve speciality, the other more rooted in traditional cultural public service traditions.

By promoting the deputy chairwoman Anne Carine Tanum a step upwards Horn hits two birds with one stone. She strikes a blow for equality as the first female chairman in the history of NRK, and another for traditional cultural values. Tanum is the head of a regional bookstore. Also the new deputy chairman, Kaare Rommetveit, has a similar, safely 'cultural' background, director of the University of Bergen and the chairman of the Bergen Festival.

Tanum has obviously learned her lesson about the sensitive leaks issue: she has publicly stated that one of the finest virtues is to 'keep my mouth shut.' Every question about the hunt for a new director general and plans for a 'super giant' media formation, and the discussions about a digital mega-alliance with NRK have politely been returned with a 'no comment.'

McIntyre leaves Discovery Comm

Kevin McIntyre, head of Discovery Communications, Asia's longest-standing pay TV channel, is to leave the group to take part in TV production ventures.

McIntyre joined Discovery from Star TV in 1994, overseeing its launch in Asia as well as the 1996 move of its headquarters from Hong Kong to Singapore. He oversaw the development of the channel throughout Asian markets, and the 1997 rollout of the Animal Planet joint venture channel with BBC Worldwide.

His departure caught the pay TV community in Asia by surprise since McIntrye appeared to have cemented his position with Discovery. Last year he wrote and presented a series 'ArtiFacts' on Discovery Asia one of the growing number of locally-produced programmes on the channel.

Spanish Via Digital goes on cinema

Spanish digital satellite platform Via Digital has signed a three-year PPV rights deal with Madrid production-distribution start-up Alquimia Cinema.

Signed by Via Digital director of programming and contents Ramon Colom and Alquimia head Francisco Ramos, the deal encompasses all of Alquimia's forthcoming productions, about five commercially-oriented feature films per year.

Director Manuel Toledano will shoot English-language road movie 'A Happy Trail' for Alquimia next summer in the US and Spain.

While formerly at the helm of Aurum Producciones, Ramos turned the established distribution outfit into one of Spain's top producers. He has produced some of Spain's biggest hits in recent years, including teen thriller 'The Art Of Dying' and drama 'I Will Survive.'

Telecom Italia to face Antitrust Authority

Italy's Antitrust Authority has prohibited the takeover of Telemontecarlo TV network (TMC) by publishing giant Seat Pagine Gialle and Telecom Italia, justifying the ban by a law that forbids former monopolies from branching out into television.
"Telecom Italia and Seat Pagine Gialle will immediately appeal the decision," Telecom Italia said in a statement.

It added that the basis of the Communications Authority's decision was 'blatantly illegitimate' and said, pending a decision by the Competition watchdog due later this week, Seat and Pagine Gialle would go ahead with their plans.

It said it had based its decision on a law which forbids telecommunications companies to own, directly or indirectly, a terrestrial broadcaster.

But the watchdog ruled that every individual country is allowed to maintain its own regulations if these help monitor a situation that is specific to that country, to avoid a former monopoly such as Telecom, which have a strategic hold over telecom networks, the Internet, TV and the publicity sector.

Seat recently merged with Telecom Italia's Internet service provider Tin.it to form the country's biggest Internet company.

In the meantime telecom Italia is looking for a US firm that could inject content into Seat PG to circumvent the regulatory ban. The group intends to maintain a stake of about 40 per cent in Seat PG after a merger with the US company, which will probably have a current market value of between $ 15 billion and $20 billion.

AT&T and DoCoMo start their alliance

AT&T Wireless and NTT DoCoMo have commenced their previously strategic alliance to develop the next generation of mobile multimedia services on a global-standard, high-speed wireless network.

NTT DoCoMo, yesterday (January 23) acquired shares of AT&T preferred tracking stock, equivalent to 406 million shares of AT&T Wireless tracking stock for approximately $9.8 billion. In addition, NTT DoCoMo has acquired five-year warrants to purchase the equivalent of an additional 41.7 million shares of AT&T Wireless tracking stock at $35 per share. AT&T reduced its retained interest in the AT&T Wireless Group by 178 million shares and received $20.50 per share from NTT DoCoMo

As a result of this transaction, excluding the warrants and prior to the spin-off of AT&T Wireless, AT&T retains an approximate 70 per cent economic interest in AT&T Wireless' operating results. Approximately 14 per cent of the economic interest in AT&T Wireless' operating results will continue to be represented by the existing AT&T Wireless tracking stock publicly traded on the New York Stock Exchange.

"This world-class alliance will bring an exciting new generation of mobile multimedia services to AT&T Wireless customers much more quickly than we anticipated even six months ago," said John D Zeglis, chairman and CEO of AT&T Wireless. "Millions of AT&T Wireless customers will soon have the benefit of a high-performing mobile Internet built in to the fabric of everyday life."

As part of the agreement, NTT DoCoMo has obtained a seat on AT&T's Board of Directors until AT&T Wireless is spun off from AT&T as a separate public company later this year.

The Irish telecom regulatory board, ODTR, has given NTL a week to produce a definitive completion date or risk losing its licence to incumbent telco Eircom or a rival operator. "We would recommend that NTL reconsider their position. They have obligations to meet. There will be penalties for not meeting them," it said.

Under the terms of the licence, NTL was to have provided digital services to 375,000 customers by the end of March. To date just 36,000 customers have access to digital television while 1,000 customers have been upgraded to NTL's bundled package of telephone, digital TV and Internet access.

Anne Marie Barry, marketing manager for NTL Ireland, denied the company has a cash flow problem, but told reporters that NTL is looking for a more cost effective method of rolling out the service.

THURSDAY 25 JANUARY 2001

News Corp sells its German channel
UPC closes its Wizja TV channel
AOL/Time Warner drastic cut
Proxim to buy Netopia
Switzerland Callino selects Alcatel
Excite@Home's workforce reduction
Oxygen adds sports
Swedish Netcom becomes Tele2
SVT under attack for 'abuse'
NAPTE to deploy its 'Speaker's Corner'
World Star TV launches on microwave

News Corp sells its German channel

Rupert Murdoch's News Corp has agreed to sell its Munich-based television channel TM3 as it seeks to reduce surplus assets. Analysts have estimated the undisclosed sum at $400 million.

German media group Kirch will buy TM3 from Murdoch and transfer it to HOT Networks AG as Murdoch appeared to loose interest in TM3 after the Champions League rights went to Kirch's pay-TV channel Premier World and the private television channel RTL.

"It was a Trojan horse to get the soccer rights," Peter Shorthouse, Sydney-based analyst for ABN AMRO, said of TM3.

UPC closes its Wizja TV channel

Wizja TV's digital flagship channel, Wizja 1, will close down at the end of March because of cost-cutting in the region, according to owner Netherlands based United Pan-Europe Communications.

Nimrod Kovacs, UPC's executive chairman of Central European operations, said, "Although it's a good service, Wizja 1 is extremely expensive.We tried to figure out how to make it less expensive, but it can't be done. Wizja 1 will be replaced with less expensive channels. But more of them, so from a consumer's point of view, it's better value."

UPC's Toon Diegenant said that the main reason for the change was to offer viewers a maximum variety of programs. "Our programming strategy is to offer more choice to viewers and we felt we could spend the money more wisely," he said. "We expect that revenues from subscriptions will even go up thanks to our new offer."

UPC acquired Wizja TV, together with PTK cable TV network in 1999 after it bought Poland-based @Entertainment. Wizja TV was launched in 1998 as Poland's first digital satellite platform. Its line-up included National Geographic, Travel, QuesTV and Animal Planet, as well as movie channels HBO, Hallmark, Romantica and TCM.
Wizja 1 was produced in Poland and the UK. The channel's owner, Wizja TV, transmits via Astra satellite from the company's broadcasting center in Maidstone, UK.

AOL/Time Warner drastic cut

AOL Time Warner is to cut more than 2,000 jobs the company announced yesterday (January 24), just a week after one of its CNN news Group, announced plans to lay off 400 people

"In no area are we cutting into the muscle of the company," said AOL Time Warner spokesman Ed Adler. "We need that muscle to grow and compete. These changes will sharpen our focus, capture synergies for growth and strengthen the integration of our company."

As part of its reorganisation, AOL Time Warner said it plans to sell its 130-store chain of Warner Bros. retail shops. The stores have been a disappointment to Time Warner, though the company does not break out separate financial figures. Even before the merger, Time Warner had been closing some of the stores. If a buyer cannot be found, the stores will be closed and the 3,800 employees laid off.

At Warner Music Group about 600 jobs are to be cut over the next six months out of a total staff of about 12,000. Unaffected are people with employment contracts, such as label heads, marketing specialists and executives who find and sign new acts.

An additional 400 people will lose their jobs to the closure of an Alabama operations centre and cuts at a Time-Life direct-marketing unit in Alexandria, Va, USA

New Line Cinema will cut 100 jobs in Los Angeles and New York, another 100 workers at Warner's Entertaindom.com in California, were fired, and 100 cuts were made at AOL Time Warner headquarters in Rockefeller Center, particularly in its information-technology division.

Employees have been bracing for layoffs for weeks. Co-chief operating officers Bob Pittman and Richard Parsons warned layoffs were likely, though they promised the numbers would not be substantial.

Analysts say AOL Time Warner is moving aggressively to cut costs in order to meet its goals for revenue and cash-flow growth. AOL Time Warner is scheduled to announce its first earnings as a combined company January 31.

Proxim to buy Netopia

Proxim Inc, a US based wireless networking company, has signed e deal to buy broadband equipment vendor Netopia, in an agreement where each share of Netopia common stock will be converted into 0.3 shares of Proxim common stock, valuing the deal at about $223 million.

Proxim said it would treat the acquisition as a purchase to increase its reach in the market for broadband Internet network-related services, and it expected the merger would add to earnings in the first full year of the combined operation.

"The merger with Netopia broadens Proxim's broadband networking strategy by providing Proxim access to DSL and other major loop technologies," said David King, chief executive of Proxim. "Plus, it gives Proxim expanded distribution to telecom, datacom and cable oriented service providers."

Switzerland Callino selects Alcatel

Callino (Switzerland), a new generation service provider, has selected Alcatel's LMDS solution for deployment throughout Switzerland.

In an order worth up to E65 million, Alcatel LMDS equipment will enable Callino to offer advanced broadband wireless services.

The Alcatel LMDS solution, comprising both products and supporting services, is a high frequency broadband wireless system that enables Callino to cost-effectively deliver high-speed Internet, data and voice services to its SME customers.

Peter Waser, CEO of Callino said, "As well as standard telephony services, we can offer our customers high speed, always-on Internet access and value added data services. We are principally targeting the SME marketplace. For these customers, the advantage of wireless technology is not only the fast transmission of data, but also the fast deployment of the necessary infrastructure which avoids the difficult and time-consuming task of laying cables."

Jean-David Calvet, Executive Vice President, fixed wireless at Alcatel said, "Competitive service providers clearly recognise the value in deploying an Alcatel broadband wireless access network. It enables them to quickly and cost-effectively support the rapidly growing demand for broadband services."

Excite@Home's workforce reduction

Excite@Home, Internet service and content provider, announced yesterday (January 24) a workforce reduction of approximately 250 employees, in a move to refocus on its fast-growing broadband division while cutting costs at its online content divisions.

"We are as optimistic as ever about the accelerated adoption of broadband services by consumers, underlined by our strong year-end broadband subscriber growth," said George Bell, chairman and CEO of Excite@Home. "While content services remain a compelling element of our opportunity, it is critical that the cost structure of our media business correlate with the changing online media world. As we mature as a business and drive towards profitability, we continue to refine our core business."

Excite@Home was formed through the merger last year of the online content service Excite and the broadband service @Home, which had been two of Silicon Valley's most respected and fastest growing Internet companies.

While the broadband part of that business continues to enjoy rapid growth, the Excite.com portal has been hurt by the downturn in online advertising, a company spokeswoman said.

Oxygen adds sports

Oxygen Media is adding sports to programme line-up aimed at women, acquiring broadcast rights to a handful of women's sporting events, including the Women's World Ice Hockey championships. It also launched OxygenSports.com, with a board of advisors.

Sport announcer Lydia Stephans, president and executive producer said, "Our schedule is one-of-a-kind, the all-star advisory team represents some of the greatest female athletes in the world, and our writers bring an authoritative and fresh perspective on women's sports. All of this will make Oxygen Sports the single best place to go for everything related to women•s sports."

Swedish Netcom becomes Tele2
By Inge Nanning

Netcom, the telecom division of Swedish multi-billionaire Jan Stenbeck and his inherited Kinnevik Investment group has announced an extra meeting of the board in a couple of weeks time to change the name of the group to Tele2.

Netcom was formed in 1993, and floated on the Stockholm and Nasdaq stock exchanges some years later. But Jan Stenbeck began his successful challenge of the state-controlled telephony monopolies in the early Eighties, years before he entered the world of television launching TV3 in late 1987.

First out was Comviq, the world's first commercial cellular phone company, introduced in Sweden in 1981. A decade later Tele2 was launched, directly attacking monopoly giant Telia's core activity, traditional terrestrial wire telephony.

Today Netcom runs telephony, mobile and card phone and Internet operations in 20 countries, mainly in Europe, claiming over 11 million customers. In Sweden, Estonia and Lithuania Netcom also runs cable television operations, Kabelvision. Together with MTG Netcom also runs a growing Internet portal, everyday.com.

"The name change is motivated by the fact that Netcom recently divested itself of its ownership of its Norwegian affiliate, Netcom ASA. By changing to Tele2 we'll avoid future name confusion, and furthermore Tele2 is one of the strongest brand names in Europe today,"comments Lars-Johan Jarnheimer, MD of Netcom.

SVT under attack for 'abuse'
By Inge Nanning

For several months Swedish Viasat, part of Modern Times Group, MTG, has threatened with legal action against Sveriges Television, SVT, the Swedish pubcaster, for refusing to give Viasat access to SVT's signals for its rapidly expanding DTH operations. Now Viasat is going from threats to direct action: on Tuesday (January 23) Viasat filed an official report to the Swedish Competition Authority claiming 'abuse of a dominant position.'

Viasat points at SVT is giving away its signals for free to some operators while 'others' are charged for the same service: cable operators like Telia-owned com.hem, where SVT and TV4 have a 'must-carry' status, and the DTT network, run by state-owned transmitter owner-operator Teracom and its affiliate.

Senda, SVT made a distribution deal with Canal Digital over a year ago, which has generated a large number of new subscribers for Canal Digital. Shortly afterwards TV4 also made a similar agreement with Canal Digital. So far the costs for this deal have been kept secret, but in its report to the Competition Authority Viasat claims that SVT has demanded an annual fee of SEK 40 million (£2.9m) plus 34 krona per household. A 'qualified quess' by the Swedish trade papers is that this is the same amount that Canal Digital is paying to SVT.

Despite months of intense negotiations Viasat has, so far, not yielded to the demands from SVT, responding by referring to a decision some years ago in the Swedish parliament that SVT has a right to 'Âact commercially' in dealing with external operators.

"I find it highly unfair that our subscribers should have to pay once more for something they have already bought once through their television licence," Ulf Groth, MD of Viasat since last summer, comments.

Viasat today counts over 1 million subscribers in Scandinavia, almost half of these are in Sweden. A major and rapid migration to digital transmissions was initiated some months ago.

Last year Viasat achieved a little revenge on the Swedish political establishment by suddenly putting a price (SEK 115 per month) on its traditionally free-to-air services TV3, ZTV and TV8 when received by the set-top boxes from the DTT operator Senda/ Boxer. This drastically slowed recruitment of subscribers for the DTT project - after almost 18 months in operation Senda has not registered more than 40.000 subscribers.

NAPTE to deploy its 'Speaker's Corner'
By Noel Meyer

Las Vegas NATPE American Broadcaster CBS has signed a three year multi-million dollar agreement with Toronto-based YOUtv to deploy its 'Speaker's Corner' format, beginning in 12 major markets including New York, Los Angeles, Boston, Dallas, Philadelphia and Pittsburgh.

YOUtv has worked with Toronto broadcaster Chum Ltd for the last decade, developing and refining the concept, which allows 'real' people to have their say on television without being editorialised or manipulated during the process.

The concept uses unmanned television studios located in high traffic areas. The Speakers Corner format will now be visible in 50 American markets and seven countries including England, Finland Columbia and Kenya. The agreement is being touted as bringing reality television to the next level.

World Star TV launches on microwave
By Owen Hughes

Thailand's looming shake-up of its broadcasting industry regulatory structure has led a would-be pay TV provider to delay its launch until halfway through 2001.

World Star TV, (WSTV) had planned to launch its microwave-delivered platform at the start of 2001. However the Thai government is currently replacing the regulator, the Mass Communications authority (MCOT) with a National Broadcasting Commission.

The commission will have seven members and the names of 14 nominees were due to be put before legislators late last year. But arguments over the identities of the members, and delays caused by the Thai national elections mean that the final seven will not be chosen until April.

"We need to wait until the new broadcasting regulatory body is in place so there are clear decisions on what we can do, including whether we can run commercials," explained Jakrapob Penkair, president of World TV Communication, WSTV's parent company.

His company took the licence held by the Thai government's Public Relations Department to run a pay TV service on microwave for $9.31 million. The concession had originally been owned by the now defunct ThaiSky platform that went out of business at the outset of the Asian regional economic crisis that started in 1997.

WSTV will go head to head with the United Broadcasting Corporation (UBC), 31 percent owned by South Africa's Multichoice International Holdings. UBC has around 340,000 subscribers. Although continuing to make losses, the flow of red ink appears to be reversing slowly but steadily.

Echoing Penkair's comments about advertising, UBC has been fighting a long battle to be allowed to carry advertising, arguing that it cannot exist only on revenue from subscriptions. Up to now MCOT has opposed UBC, although the company hopes that the new regulator will look more sympathetically at its request.

FRIDAY 26 JANUARY 2001

i-Cable announces profits
News Corp beats Seven Network
CanWest Global's earnings jump 32%
Swedish groups link up on 3G
Pace Micro Tech changes its board
Francis Beck defends INA record
T-Online' s E125m loss
Cisco's $200m investment in Japanese Softbank
NTL builds digital TV
Gateway to team with AT&T

i-Cable announces profits

After seven years operation the group containing Hong Kong's de facto monopoly pay TV provider, i-Cable, may be about to announce profits.

In the first six months of 2000, the cable TV operation delivered a $1.29 million operating profit to the I-Cable Communications Group. However the cost of rolling out broadband and Internet services over its HFC network has continued to keep the company in the red.

Chief executive Stephen Ng said the group would make a profit if profits from cable TV division losses from the other divisions.

The cable TV system will face competition later this year for the first time since it began operations in 1993, with the operators of the first of four pay TV licences awarded by the Hong Kong government begin transmissions.

Ng has expressed his belief that Hong Kong, with 1.6 million homes, does not have enough potential customers to support all of the newcomers. His comments have been given weight by the decision of Star TV last December not to take up its pay TV licence because of concerns about the future prospects of the service.

i-Cable enjoyed an upsurge in subscribers last year and now has around 520,000. Advertising revenue grew by 60 per cent in 2000, although subscriptions still account for nearly 90 per cent of income.

News Corp beats Seven Network

News Corp has won its battle to air Australia's most popular winter sport after the country's number two broadcaster, Seven Network, admitted it had been outbid for the rights to Australian Rules Football (AFL).

Seven Network had been broadcasting AFL for 45 years when News Corp made a $272 million, five-year bid for the rights late last year. Under the terms of Seven's contract with the AFL the broadcaster had the right to see the terms of rival bidders and then possibly offer more.

Yesterday Seven chairman Kerry Stokes admitted, "We were not able to match the price," in a statement issued in Sydney. The sums were always against the broadcaster, which would have had to have doubled its costs of televising the sport in order to maintain the rights.

Stokes added that Seven would have been obliged to offer around $40 million in cash a year, and $6 million in advertising time given to the AFL in lieu of cash on top of its marketing and production costs.

Although sport has traditionally been a lower-cost alternative for channel providers, Seven said that its AFL coverage would have been more than 75 per cent more expensive on an hourly basis than its most popular drama, Blue Heelers.

News will licence the pay-TV rights to pay TV platform Foxtel, in which it owns 25 per cent. The free to air rights will be sold to Seven's two rival commercial broadcasters, Nine and Ten Networks.

CanWest Global's earnings jump 32%

International broadcaster CanWest Global released first quarter results showing a 32 per cent jump in earnings. The Winnipeg-based company had international operating profits of $200 million (C$133) up from $C101 million for the same period a year earlier.

Revenue from operations in Canada, Australia, New Zealand and Ireland increased by 51 per cent to C$403 million from C$268 million for the same period a year earlier.

"The major steps we have taken are beginning to bear fruit," said company president and CEO Leonard Asper, referring to the recent friendly purchase of newspaper chain Southam for C$3.1 billion. Asper said that the company would soon embark on a debt reduction program.

While CanWest's revenus rose first quarter, net earnings fell by 16 per cent to C$41 million from $C49 million due to foreign currency declines and a C$7.2 million cumulative translation adjustment on distribution of Network Ten earnings.

3G link up in Sweden

On Tuesday (January 22) two of Sweden's UMTS licence holders - Europolitan, majority owned by the UK's Vodafone, and Hi3G, owned by Investor AB and Hutchison Whampoa of Hong Kong - agreed to set up a joint network to cut costs.

The companies are to jointly build and maintain up to 70 per cent of their 3G infrastructure. Europolitan alone could save between 30 and 40 per cent of the cost of building its network. Hi3G, whose application envisaged spending about SKr36 billion ($3.77 billion), could also save a similar amount suggest analysts.

The announcement follows last week's news that Swedish operators NetCom AB and Telia are teaming up to build a joint network. Telia, the country's largest mobile operator, was forced to find a partner as it failed to secure a 3G licence in December.

The latest move will increase the pressure on the remaining licence winner, France Telecom's Orange, to strike a deal with a partner or face the prospect of having to finance the whole infrastructure bill itself. This will be particularly difficult for Orange, which is already at a competitive disadvantage to Europolitan, Telia and NetCom, because it lacks an existing customer base in the country. However, Jeremy Sell, chief executive of Orange Sweden, said the company was prepared to follow its own path if suitable cooperation forms could not be found.

Jon Risfelt, Europolitan's chief executive, said the cooperation set-up was open to another partner and that talks had been conducted with all the players.

Pace Micro Tech changes its board

Pace Micro Technology has announced changes to its board and Executive team, to support a reorganisation.

Tim Fern, currently Director of Engineering, is appointed to the Board as chief technology officer. He will continue his responsibility for R&D, focusing on Pace's core home gateway technologies of satellite, cable, terrestrial, DSL and wireless broadcast platforms. In addition, he will develop Pace's business for 'value added' engineering services in customer network development and engineering services.

Andy Trott, currently director of technology and strategic development, will become the divisional CEO of a newly formed division for home networking and Internet appliance technologies.

Neil Gaydon currently regional sales director-Americas, is promoted to director of worldwide sales, replacing Paul Ashmore who is leaving the company.

Malcolm Miller, chief executive officer, commented, "Digital television technology is exciting operators, commentators and consumers with its potential as the communications hub for the home. Through the reorganisation we will ensure that Pace is ideally positioned for the opportunities this market provides, from our ability to advise network operators on digital television rollouts to the delivery of home gateway products to partnerships with new service providers who want to operate through the home gateway."

Francis Beck defends INA record

Francis Beck, who has just been appointed to the CSA, held an impromptu press breakfast to defend his achievements at the INA, the French National Audiovisual Institute, which ha has headed since May 1998 until Tuesday (January 23).

The management of the INA was criticised in the leaked report from the Cour des Comptes, the government-spending watchdog.

INA was set up when the ORTF, the government broadcasting organisation, was broken up, to provide archiving facilities for broadcast material. Beck pointed out that the Cour des Comptes didn't take into account the necessarily public nature of much of the INA's activity. INA has embarked on an ambitious program involving substantial investment.

In September 2000 it undertook the digitisation of all its archives. It intends to make its archives available on line as part of a diversification into B to B activity, selling archive broadcast footage via the Internet. It also intends to develop an activity of providing audio-visual archiving for companies. The general public will not be left out, and the INA is working on making archive footage consultable via the web.

One of the problems is the way copyright rules work. Footage archived under legal depository (as the national library does for books) may not be exploited commercially. The INA is investing F250 million ($3.25 million) over the period 2000 to 2003 on the digitalisation of its archives plus 30 million francs a year on the systematic digital storage begun last year.

INA currently gets 60 per cent of its annual budget (E100 million) from the license fee and has to make up the remaining 40 per cent. Beck expects to cover its costs by 2002. The results for 2000 will be the best for ten years, Beck said. Costs were reduced and staff was cut by 5 per cent last year, down to 950.

T-Online' s E125m loss

Despite increased revenues, T-Online, Europe's largest Internet service provider, on Wednesday (January 24) reported a loss before interest, tax, depreciation and amortisation of E125 million ($116.5m) for 2000.

T-Online, which is 81.7 per cent owned by Deutsche Telekom, attributed the loss to start-up losses in its foreign shareholdings, and the spiralling cost of its flat-rate Internet service in Germany.

Michael Steib, analyst at Morgan Stanley Dean Witter, said that while the trend was very negative for T-Online, it could be reversed if the company secured a wholesale rate from Deutsche Telekom for access to its telecoms network.

Deutsche Telekom currently charges T-Online and other ISPs a per-minute rate for carrying internet traffic over its network, which means the companies lose money on fixed-rate customers who stay online too long. A similar with rates charged by British Telecommunications in the UK, led ISPs AltaVista and Breathe.com to withdraw flat-rate services last year.

The German situation is due to change as RegTP, the German telecommunications regulator, has ordered Deutsche Telekom to offer flat-rate access to ISPs by February 1. However, Deutsche Telekom is seeking to challenge the ruling.

Tapping into this side of the business, which can carry margins of up to 90 per cent, is crucial for offsetting the mounting access costs, said Steib.

"The ISP business logic depends on attracting customers and then monetising them through advertising. T-Online has been relatively slow in monetising its very significant subscriber base in the past, but seems to have made some progress in the fourth quarter," he said.

Most significantly, T-Online announced that the percentage of advertising revenue derived from Deutsche Telekom had fallen below 50 per cent for the full year.

Cisco's $200m investment in Japanese Softbank

US computer giant Cisco Systems Inc will invest $200 million in Softbank Corp, becoming eighth biggest shareholder in Softbank.

The Japanese group will finance broadband and wireless projects and fund mergers and acquisitions. "We are at the dawning of an era that will be characterised by universal use of broadband, wireless and Internet technologies," said Softbank president Masayoshi Son, regarded as one of Japan's most charismatic entrepreneurs. "But, we must first build the core infrastructure," he added.

Cisco will also buy most of Softbank's 12 per cent holding in Cisco's Japan-based unit for $275 million. The US giant will invest $1.05 billion over several years in a new private equity fund run by Softbank that will target companies in broadband, optical, wireless and Internet-based technologies across Asia.

A Cisco spokesman said the fund would likely take stakes in Asian Web and telecoms service providers, which are potential buyers of Cisco equipment, as well as emerging makers of Internet infrastructure equipment, potential competitors and partners.

An analyst at Tokyo-Mitsubishi Securities Nobumasa Morimoto, said, "There is no downside to this deal for Softbank. The deal with a well-known firm like Cisco will improve the image of Softbank, but we can't see any immediate synergy benefits unless they specify what exactly they plan to do."

"Investors are still sceptical about Softbank's business model," said Taku Kumazawa, analyst at Wit Capital Securities. ''But this may change the negative view on Net companies remaining in the market after the bursting of the Internet bubble.''

NTL builds digital TV

NTL Inc announced plans to build up its digital television and broadband Internet subscriber numbers and cutting costs.

It predicts earnings before interest, tax, depreciation and amortisation of £385 million ($559.8 million) in 2001 and 825 million in 2002, and aims to have 1.25 million digital subscribers by the end of 2001.

Paul Sullivan, NTL analyst at Merrill Lynch, said the EBITDA figures were slightly better than he expected. "In an industry that's not known for it's execution abilities, they look to be the clear leaders," he said.

The US -listed company forecast revenues of £2.6 billion in 2001 and 3.4 billion in 2002. Capital expenditure will total £1.3 billion in 2001, NTL has yet to publish its results for 2000. Its most recent figures, for the third quarter of last year, showed EBITDA of 62 million pounds and revenues of 560 million.

Gateway to team with AT&T

San Diego-based Gateway announced on Wednesday (January 24) that it would team with AT&T Broadband to use cable modems for high-speed Internet access in six test cities in the US.

Gateway will offer free cable equipment and setup for $30 a month, in Dallas, Denver, Portland, Salt Lake City San Francisco and Seattle. Current computer owners will get a free two-month trial of the service, after which they are charged $40 a month.

Gateway has previously partnered with America Online to test DSL connections for Internet access, a competing standard for broadband communications that will still be offered in some markets. Gateway plans to expand both services as geographically fit, according to a spokesperson for the company.

WEEKEND NEWS FRI 26-MON 29 JANUARY 2001

Lion's Gate TV goes to Canada and US

With television programming sinking to new depths daily it finally had to happen. Vancouver-based Lion's Gate Television Corp reports that its new show, 'Who Wants to Date a Hooters Girl,' will be televised nationally in both Canada and the United States next fall.

Using game show format male contestants will be eliminated through round one, Stud or Dud? and round two, Know Your Hooters. The winner's prize will be going out on a date with a Hooters waitress.

Hooters is a slang expression for breast and Hooters is a restaurant chain with 300 outlets across North America. Hooters waitresses are large breasted and wear low cut singlets and skimpy shorts. With 10,000 Hooters waitresses available, 195 shows are planned for next year. Lion's Gate was previously known as a producer and distributor of serious art house films.

Alcatel, Marconi and Alstom placement announced

Alcatel SA, Marconi PLC and Alstom announce today details of the placement of part of Alcatel and Marconi's stakes in the French industrial group Alstom.

The initial offer size will be 64,616,238 shares or 30 per cent of Alstom's total share capital. The transaction size can be increased at any time up to and including the pricing date by up to 25 per cent which would lead to an offer size of 80,770,298 shares or 37.5 per cent of Alstom's total share capital.

Marconi and Alcatel will each sell the same number of shares. Any unsold shares will be subject to a 180 day lock up as will Alstom, subject to certain exceptions.

Assuming exercise of the greenshoe option following the placement, Marconi and Alcatel will each own between approximately 7.3 per cent and 3.2 per cent of Alstom's share capital and the 'free float' of Alstom will increase to approximately 85 to 94 per cent depending on the final placement size.

The shareholder pact between Marconi and Alcatel will fall away and Marconi and Alcatel will no longer act together concerning any remaining stakes in Alstom.

Barconet supply Indonesian headends

Belgium's BarcoNet announced on Friday (January 26) that it is supplying cable TV headends to all three major Indonesian cable operators, Kabelvision, Indonesia Telemedia and Indosat Mega Media.

Installation of the headends and commissioning is handled in cooperation with Catur Mitra, BarcoNet's Indonesian distributor.

The headends deployed will offer subscribers 30 to 40 analogue TV programs, and additionally prepare for complete digital services deployment, including pay television. Both Kabelvision and IMM will initially use the digital transport streams for their respective premium TV channels.

"We have consciously chosen BarcoNet for the headends and the network monitoring system because of their proven solutions, track record and outstanding local support," said Dwight Harlan, Technical Director of Kabelvision. "The headends were on-air according to schedule and deliver the highest quality signals, while the Rosa monitoring system gives me a bird's-eye view of my operation 24 hours a day."

The Convergence Summit

This year the Mediacast exhibition in London will be combined with the ECC, as well as the launch of a new show for the new world of broadband content, e-CAST, reflects the direction being taken by the media comms industry. This is further enhanced by the accompanying conference to be called 'The Convergence Summit'.

The Convergence Summit organised alongside Mediacast, ECC and e-CAST will feature over 30 senior executives giving a candid examination of the opportunities facing companies in the broadband arena.

Speakers include:
¶ Dick Callahan, Chairman, Callahan Associates
¶ Ben Andradi, President and Chief Operating Officer, BT Openworld
¶ Yves Elsen, Marketing and Commercial Director, Astra
¶ Melanie Leach, Director of Programming, TwoFourTV
¶ Garry Stephen, Managing Director, DIVA Europe
¶ Andrew Curle, Special Projects Manager, Irdeto Access
¶ Bruce Lynn, Microsoft
¶ Rôgis Saint Girons, Managing Director, Open TV, Europe
¶ Patrick Harshman, President, Broadband Access Networks Division,
Harmonic Inc.
¶ Mike Valiant, Senior Market Development Manager, Cable Solutions, 3com
Corporation
¶ Kevin Morrison, Vice President International, Respond TV
¶ Roger Lynch, President and CEO, Chello Broadband
¶ Steve Wallbank, Market Development Director Broadband Services, Portal
Software (Europe)
¶ David Treadway, Industrial Adviser, 3i
¶ Kate Bulkley, Broadcaster - Chairman for first day

The conference consists of seven panel discussions held over two days covering the following topics:

Day One Monday 21st May 2001

1. The Third Way -
For some years, broadband network development has been seen as a competition between cable companies and the incumbent telco. How goes the fight? With local loop access, broadband by satellite and fixed wireless, is there a Third Way? Leading operators review progress and examine the issues for the future.

2. Regulation vs. Opportunity - What Possibilities and What Danger tothe Established Order?
¶ What services will consumers demand?
¶ What can the entrepreneurial content providers actually do?
¶ What will the traditional content providers be forced to do?
¶ What, in turn, will the regulators want content providers to do?
¶ Will distributors have to buy into content provision to survive?
¶ What will happen in unregulated waters?

3. Packaging Content to Create Demand - Giving Customers the Right Content as the Answer to the Challenge of Permission Marketing.
This session will look at making interactive business services work, covering: Video-on-demand, TV-on-demand, High-speed Internet, 3G mobile, interactive tv, e commerce, m-commerce; & t-commerce. How will organisations involved in delivering these services make money? What will their business models look like? How will permission-based marketing work? How to avoid the "WAP-style" hype and manage consumer expectations - at the industry level? How to add value to your customer
relationships: one-to-one marketing - does the consumer really want it?

Day Two Tuesday 22nd May 2001

4. Protecting Content in the Digital Environment - Is this an Illusion?
Security in a digital environment is crucial to your organisation's success. Hear from the panel of experts how security can be built into your business model.

5. Standardisation vs Innovation - Interoperability: a Point Not Yet Proven?

In order for the market to benefit from true technological convergence, a certain level of openness between platforms must be achieved by industry players. Hear from a cross-section of experts from various platforms on their concerns and foreseeable opportunities, as well as whether they think that standardisation will necessarily blight innovation.

6. Can You Make Money Out of Streaming Media Or Is It Just a Fat Pipe
Dream?
¶ Is there a business model for making streaming media work?
¶ Is streaming media necessarily subculture or can it go mainstream?
¶ Will streaming media overturn the established order?
¶ What will be the effect of bandwidth on streaming media services?

7. Making a Successful Business Your Business
In conclusion to this intensive, strategic conference, executives will debate with the Floor, how they visualise future opportunities for operators, technology companies, service providers, content providers and ultimately the brand owners.

Excite@Home $36m loss

Internet service and content company Excite@Home Corp reported a fourth-quarter net operating loss of $36 million compared with an operating profit of $500,000.

The loss is lower than most forecasts, but the company warned it would be much larger than current expectations as it invests aggressively to expand its broadband network.

"We are making the necessary investments to address this priority and the necessary improvements in our cost structure to ensure that we can grow with a trend toward profitability," Chief Executive George Bell said.

At year end, the group had 2.96 million broadband subscribers worldwide, compared with 1.15 million at the end of 1999 and expects its total revenue will decline 12 to 15 per cent from the fourth quarter.

Excite@Home, which operates the Excite.com Internet portal in addition to its high-speed Internet access business has, like all online content companies, been hurt by the slowdown in advertising. Most of the job cuts it announced earlier this week were made in media and content areas of the business.

Netro Corp's declining revenues

Netro Corp, a US provider of broadband wireless access systems, announced on Thursday (January 25) that revenues could decline in the first quarter of 2001 from the fourth quarter of 2000 due to the challenging environment for telecommunications service providers.

The company previously reported a fourth-quarter net loss of $2.5 million, compared with a loss of $7.5 million for the fourth quarter of 1999.

Maiden deals with ITN News

Britain's Independent Television News will become the world's first news provider to bring TV news to a railway station concourse, outdoor advertiser Maiden Group said on Thursday (January 25).

Maiden has struck a deal with ITN News Channel, a joint venture between ITN and Britain's largest cable TV operator NTL, to display news clips, pictures and text on giant electronic video billboards.

A screen at London's Victoria Station is expected to go live within the next few weeks, and the companies plan to roll out the screens to other mainline stations in London over the next 18 months and eventually provincial stations.

ITN is owned by Reuters Group Plc, Carlton Communications, Granada Media, Daily Mail, and United News, each of which have a 20 per cent stake in the company.

Telefonica and PT give Brazil licences a miss

Telefonica of Spain and Portugal Telecom, which are planning to unite their mobile assets in Brazil, are not going to bid for mobile licences to be sold in Brazil this quarter, preferring to wait for a second round of license sales at a later date.

Brazil's government is set to sell nine mobile licenses in a three-leg auction between the end of January and March.

The new licenses encompass much bigger regions of Brazil than those covered by existing cellular concessions. "We are obviously looking at the possible re-auction of spectrum that might happen," after the initial sales, said Zeinal Bava, PT's chief financial officer.

In announcing their agreement on Wednesday (January 24), Telefonica and PT said they would create South America's No 1 mobile company with 9.3 million clients in Latin America's biggest telephone market.

Panasonic to sponsor HDTV news

Panasonic is sponsoring the launch of the first regularly - scheduled news broadcasts in High Definition Television (HDTV) format in the US.

The broadcasts, slated to begin on January 28, 2001 at WRAL-TV, a pioneer in digital television broadcasting, will feature news stories acquired, edited and played back on Panasonic DVCPRO HD high definition equipment. The broadcasts will be supported by a series of Panasonic-sponsored promotional announcements designed to draw attention to the broadcasts and the HDTV format.

Bill Peterson, VP and general manager of WRAL said, "This conversion to HD has, quite frankly, never been done before. Virtually every piece of equipment we use in putting together a newscast, from field cameras to editing to the control room, has been completely changed. Viewers will see a clearer picture, more detail and a greatly enhanced newsroom designed to function at the highest possible technical standard."

Panasonic is trying to encourage the acceptance and awareness for digital television, sponsoring the first public broadcasts of HDTV in New York, Chicago and Boston, numerous demonstrations for consumers across the country, the HDTV broadcasts of 'Monday Night Football' and SuperBowl XXXIV.

OpenTV gets into Canada

OpenTV signed a deal with Bell ExpressVu LP, Canada's leading direct-to-home satellite TV company with more than 725,000 subscribers.

James Ackerman, president and COO, OpenTV, said, "Canada represents a mature and sophisticated viewing audience which could quickly embrace a quality interactive television service. We expect that through our partnership with Bell ExpressVu, we can deliver an enjoyable and profitable entertainment experience through interactive TV applications that run on the OpenTV platform."

The companies said they will introduce this summer new television service which will include interactive weather and t-commerce features.

Energis launches interactive digital

'BrightBlue' will be the new interactive digital channel to be launched by Energis Interactive, a joint venture company set up between Glasgow-based software firm Graham Technology and telecommunications group Energis in a multi-million pound deal with broadcasting giant Sky.

The channel will be available to the four million homes in the UK that currently subscribe to Sky services and will give consumers the choice of interactive portal provider.

"We are delighted to have signed these landmark agreements with Sky," said Tim Harris, Managing Director of Energis Interactive. "It now enables us to move into the final stages of discussions with a number of well known high street names, all of whom are keen to be part of our portal."

Services available on BrightBlue include shopping, banking, travel, betting and recruitment. It can, for example, offer people the chance to book a holiday and view a video of the selected accommodation, check availability and flight times all on the TV, and then receive confirmation of their booking through the internet or their mobile phone.

"The key thing for businesses using multiple channels to market is consistency of service through all the different channels," said Mike Hughes, director of Graham Technology and technical director at Energis Interactive. "Companies must do more than just replicate their online presence. The television audience is used to broadcast or video quality, so the iTV experience must be even more compelling."

Energis Interactive will also have the capability to make both channels and advertisements interactive. The company has been the target of flotation speculation with many analysts expecting an IPO later this year.