BT Chairman Hails Financial Transformation

Addressing shareholders at its annual general meeting in London, Sir Christopher Bland, BT's chairman said the company has undergone a complete transformation over the past 2 years because it was able to make tough financial decisions early on. He pointed out that just two years ago the company's debt had reached £28 billion; it had forgotten how to generate free cash flow; its strategy was unclear; and the morale of customers, employees and shareholders was low. Since then, BT has cut its net debt to £9.6 billion, two years ahead of schedule. Last year, earnings per share grew by 61 per cent and BT generated operating free cash flow of £1.7 billion, surpassing its 2004/05 target. Looking ahead, Sir Christopher said the improved financial situation would make possible larger dividends for shareholders.
http://www.btplc.com

• As of 16-May-2003, BT had 936,000 broadband end users. The company was adding about 25,000 new DSL accounts per week . At the time, BT's footprint was covering about 69% of UK households.

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Marconi Cites Tough market for Reduced Sales

Citing tough market conditions and generally weaker demand, Marconi reported group sales of £367 million for the three months ending 30-June-2003. On a sequential basis, sales of network equipment and services fell by 14%. Network equipment represented 62% of the companies revenues and network services accounted for the balance of 38%.

• Sales fell in all major regions: EMEA was down 17% and North America was down 5%.
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  The company's cost savings program is on track to achieve its run-rate targets, but operational performance was hindered by lower sales volumes in the quarter. The outlook for the current quarter is cautious, with flat to slightly increased sales expected for the period expected.
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  Marconi's ten largest customers are (alphabetical order) AT&T, BellSouth, BT, Metro City Carriers, Sprint, Telecom Italia, UK government, US government, Verizon and Vodaphone. These customers accounted for 51% of sales.
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  Gross margin during the quarter decreased by 2 percentage points to 22.4%.
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  Marconi had 14,735 employees on 30-June-2003, down by about 800 employees from three months earlier. About half of the reduction came from transfers to CSC as part of Marconi's recently announced IT outsourcing agreement.

Marconi also said that for the first time in over two years, many large network operators, including BT, Telecom Italia and Vodaphone, are beginning to forecast increases in capital expenditure, but this has not translated into firm orders.
http://www.marconi.com

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Yahoo! selected Convergys for Customer Relation Management

Yahoo! selected Convergys to manage general inquiries and billing-related questions for many of its online premium products and services. Additionally, Convergys will help support Yahoo!'s e-mail and inbound calls. Financial terms were not disclosed. Convergys said its customer service agents working in 46 contact centers currently manage more than 1.7 million customer interactions over the phone or the Internet per day.
http://www.convergys.com

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EU Approves 3G Network sharing in Germany

The European Commission decided to approve 3G mobile network sharing in Germany, paving the way for national roaming between licensed network operators. T-Mobile and mmO2 entered into agreements to share 3G site infrastructure ('site sharing') and to roam on their 3G networks in the UK and Germany. In February 2002, the parties asked the EC for clearance or, alternatively, an exemption of their agreements under the antitrust rules.http://europa.eu.int

• In April 2003, the European Commission approved 3G mobile network infrastructure sharing in the UK, ruling that site sharing in itself does not raise competition concerns. More specifically, 3G site sharing between operators does not restrict competition if such agreements are limited to sharing basic network infrastructure such as masts, power supply, racking and cooling. The EC investigation into the infrastructure sharing also found that national roaming between licensed network operators benefits consumers by allowing the operators involved to offer better and quicker coverage, especially in less built-up and more remote areas.

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EU Fines Wanadoo for Preditory ADSL Pricing

The European Commission has fined Wanadoo Interactive, a subsidiary of France Telecom, EUR 10.35 million for abuse of its dominant market position by charging predatory prices for its ADSL-based Internet access services. The EC found that, up to October 2002, the retail prices charged by Wanadoo were below cost and thereby created a barrier to market entry for potential competitors. The EC also found that the effects of Wanadoo's conduct were not confined to ADSL competitors, but extended to cable operators offering high-speed Internet access. The abuse came to an end in October 2002, when France Telecom introduced new wholesale ADSL prices that are 30% less than what it previously charged. Broadband growth in France has subsequently picked up. The number of Internet subscribers in France grew more between September 2002 and March 2003 (seven months) than between March 2001 and August 2002 (seventeen months).http://europa.eu.int/

• In a statement, Wanadoo said it deplores the decision of the European Commission and that it would consider an appeal. The company said the decision sends the wrong signal to entrepreneurs who take the risk of builiding up a new market.
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  In June 2003, France Telecom announced a new push to extend DSL through France. The company is now targeting 3 million ADSL customers by year-end 2003 and that ADSL coverage will be available to 90% of the population by 2005. France Telecom now expects to have 8,000 DSLAMs deployed in 2005, compared with 3,000 today. This will require 7,500 km of new fiber deployments. The company plans to invest EUR 600 million over three years in the broadband initiative.
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  At the end of 2002, 1.4 million people in France had broadband Internet connections and about 50,000 new accounts were being added per week. It now takes about 48 hours to get new ADSL service in Paris and about one week elsewhere in France.
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  In April 2003, The European Commission called on the French government to ensure the equal treatment for cable networks in the provisioning of telecommunications services in France. Noting that cable network operators in France account for less than 0.2 % of access to fixed telephony services, less than 15% of high-speed Internet access and less than 4% of Internet access markets as a whole, the EC is asking for the removal of restrictions on the provision of telecommunications services on cable networks. The Commission maintains that France has not complied with two previous directives on the issue.

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SpectraLink Announces Another Hospital WiFi Phone Deployment

The Sint-Annendael Hospital of Diest, Belgium has equipped 70 of its doctors, nurses and staff with SpectraLink's NetLink Wi-Fi telephones for use through the entire facility. Sint-Annendael's medical staff was previously limited to using beepers and returning pages on wired telephones at nurses' stations. SpectraLink's NetLink phones are integrated with the hospital's newly purchased Avaya Definity PBX and their network of Avaya Wi-Fi wireless LAN access points. Sint-Annendael partnered with A2Z Solutions, a system integrator based in Belgium.
http://www.spectralink.com

• Last month, SpectraLink announced that the Medical Center Leeuwarden in the Netherlands has deployed its newly released NetLink e340 and NetLink i640 Wireless Telephones to run over its network of Cisco Aironet Wi-Fi access points.

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SMC Prices Managed 10/100 Switches at $16 per Port

SMC Networks added new security and management features to its 24-port, 10/100 Mbps TigerSwitch and reduced pricing to MSRP of $399.99, the equivalent of $16.67 per port. The switch offers two slots for optional Gigabit or 100Mbps fiber expansion.
http://www.smc.com

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EarthLink Expands Broadband Footprint to Cover 8 Million Households

EarthLink has expanded its high-speed access footprint to potentially serve upwards of 7 million additional households across the U.S. The expansion is a result of agreements signed with SBC in 2002 and BellSouth earlier this year. These agreements, slated for full deployment by early 2004, will ultimately give EarthLink the ability to reach more than 8 million additional households.
http://www.earthlink.net

• EarthLink currently claims more than 891,000 high-speed subscribers, served over a combination of cable modem, DSL and two-way satellite connections.

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Cable & Wireless Partners with France's Completel

Cable & Wireless announced a bilateral traffic collection and termination deal with Completel, a leading national infrastructure-based carrier serving medium and large businesses in France. Under the agreement, Completel will provide its network to connect Cable & Wireless customers' sites, particularly through direct fiber connection, and to collect and carry these customers' traffic to Cable & Wireless' international PoP in Paris. The British operator will carry a significant proportion of Completel's customers' international voice traffic over its global network.
http://www.cw.com
http://www.completel.com

• In June 2003, Cable & Wireless announced a major restructuring under which it will withdraw from the U.S. market. Earlier in the year, Cable & Wireless had been optimistic that it could continue to build its business serving multinational enterprises and other carriers in the U.S. However, Cable & Wireless has now concluded that there is not a long-term viable business model, as its U.S. operations continue to consume cash and have had limited interaction with the rest of the Cable & Wireless group. At the time, Cable & Wireless said it would concentrate its efforts on the UK, where its market share is second only to BT. The larger strategy is to create a group of profitable national telecom companies with strong positions in their primary markets.
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  In April 2003, Cable & Wireless appointed Francesco Caio as its new CEO, replacing Graham Wallace. Caio formerly served as CEO and founder of Netscalibur and previously CEO of Omnitel and Merloni. Cable & Wireless also named Kevin Loosemore to serve in the newly created position of COO. Loosemore previously was Regional President for EMEA of Motorola and formerly CEO of IBM UK.
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  In November 2002, Cable & Wireless first announced plans to withdraw from domestic business markets in the US and in Continental Europe -- except for multinational Enterprise and Service Provider customers.

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CWA Members Threaten Strike if Verizon Contract Talks Falter

Members of the Communications Workers of America working at Verizon Communications voted overwhelmingly to give CWA leaders authorization to call a strike if they deem it necessary. The CWA said 92% of its Verizon members voted in favor of the strike authorization. Negotiations with Verizon are underway. The current collective bargaining agreement expires at midnight on 02-August-03. For a strike to take place, the next step would be for CWA's 20-member executive board to authorize President Morton Bahr to set a strike date.


In a press statement, CWA President Morton Bahr pointed out that Verizon is the most successful U.S. telecom firm and the biggest in market capitalization in the U.S. and 3rd largest in the world -- also boasting the greatest revenues ($67 billion) and largest profits (over $8 billion in 2002 before one-time charges for accounting reforms and bad investments, leaving over $4 billion in net profits). He noted that last year Verizon spent over $500 million in special stock deals for its management team.
http://www.cwa-union.org

• The CWA represents some 60,000 employees at Verizon Communications.

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Groups Develop 1394b-Ethernet PHY for A/V Transport

The IEEE is working with the the 1394 Trade Association to develop a combination 1394b-Ethernet PHY for short range audio/video transport. The goal is to allow IEEE 1394b links of up to 100 meters over Category 5 wiring using existing Gigabit Ethernet (1000base T) physical layer technology. Leading semiconductors companies are planning to develop a combined Ethernet/1394b PHY chip that could be used in a hub for connecting either Ethernet or IEEE 1394 end points automatically.
http://www.1394ta.org

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Broadwing Communications Hires Founder of Vyvx

Broadwing Communications hired Delwin L. Bothof as a strategic consultant to help the company expand its video distribution business with cable and broadcast networks, sports leagues, and other programming sources. Bothof was the founder and first president of Vyvx, a provider of integrated fiber-optic, satellite, and teleport video transmission services. He later served as President of Domestic Strategic Investments for Williams Communications.
http://www.broadwing.com

• In June 2003, Corvis and Cequel III, a St. Louis-based telecommunications and cable management firm, completed their acquisition of Broadwing Communications from Cincinnati Bell. The sale included Broadwing's 18,500 mile national fiber network, its all-optical switching platform, a state-of-the-art network operations center and all the other network elements necessary to provide its integrated and managed broadband telecommunications services. Mark F. Spagnolo was appointed Interim CEO of Broadwing Communications. Spagnolo has held various executive positions with Electronic Data Systems, as well as the position of President and CEO for UUNET.

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UTStarcom Reports Q2 Sales of $406 Million, up 23% Sequentially

UTStarcom reported Q2 net sales of $405.8 million, a sequential increase of 23% over the $330.5 million in net sales reported in the previous quarter and a 75 percent increase over the $231.5 million in net sales reported in the second quarter of 2002. Net income for Q2 2003 increased 53% year-over-year to $39.4 million, or $0.33 per share, compared to net income of $25.7 million, or $0.22 per share, for Q1 2003. The quarter marked UTStarcomm's best financial performance to date. The company announced more than $240 million of contracts in Q2. UTStarcom is again raising its guidance for 2003. Q3 revenue is now expected to be in the range of $495 million to $505 million, with earnings per share expected to be approximately $0.42-$0.43 for the quarter on a GAAP basis.
http://www.utstar.com

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PMC-Sierra Reports Q2 Revenue of $60.4 Million

PMC-Sierra reported Q2 revenue of $60.4 million compared to $55.4 million in the first quarter of 2003 and $54.5 million in the same period one year ago. GAAP net loss in Q2 was $9.2 million (GAAP net loss per share of $0.05), compared to a GAAP net loss of $11.5 million in Q1 2003 (GAAP net loss per share of $0.07). PMC-Sierra said sales activity in the service provider sector during Q2 improved modestly in both Asia and North America. The company will continue investing in next-generation metro transport, MIPS-based microprocessors, and storage systems related products.
http://www.pmc-sierra.com

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Ixia Revenues Increase 7% Sequentially to $20 Million

Ixia's Q2 revenues increased 16% on a year-over-year basis to $20.0 million compared to $17.3 million for the second quarter of 2002. Compared to the preceding quarter, Q2 revenue was up 7%. Net income on a GAAP basis for the second quarter of 2003, including stock-based compensation, was $2.5 million or $0.04 per diluted sharehttp://www.ixiacom.com

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