MCI Communications Corp’s decision to turn its back on owning cellular infrastructure and instead simply becoming a national reseller is another straw in the wind suggesting that building new infrastructure is perhaps not the best option for ambitious telecommunications companie s – Cable & Wireless Plc is thought to have come to regret its decision to build its own network for Mercury Communications Ltd rather than finding existing networks on which to piggyback; in the US, MCI, which is building its own Metropolitan Area Networks in major cities, is betting that after the airwave auctions, the country will be awash with spare capacity it will be able to pick up cheaply – and its first step was the agreement to pay $190m for Nationwide Cellular Service Inc (CI No 2,669).
Competition Commissioner Karel Van Miert is expected to announce today that the European Commission has problems with the Atlas joint venture planned by France Telecom and Deutsche Telekom AG: his spokesman told Reuters that the warning letter the Commission writes when it thinks a deal poses strong competition problems had not been sent yet; a warning letter would mean the two cannot proceed with their plans before the Commission has taken a final decision – and there is no deadline for it to do so.
Creative Technology Ltd plans to launch an all-in-one telephone management system for the personal computer: called Phone Blaster, the new product is designed to meet the telecommunications needs of a small busines user, the Singapore company said; it is expected to cost $260.
Shares of EMC Corp have been lively in active trading on expectations the company will introduce some new storage products for the networked computing market next month, Reuters reports analysts saying: EMC declined to comment on unannounced products but said We have acknowledged that we have products coming out in the open systems marketplace, and we are excited about them, declining to give details.
Hutchison Whampoa Ltd says it is well advanced in developing its $450m fixed telecommunication network service for Hong Kong: Hutchison Communications Ltd was one of three groups licensed to compete with Hong Kong Telecommunications Ltd, which loses its monopoly on domestic fixed telecommunications in July; it hopes to begin service in the final quarter of this year.
Sharp Corp has established a wholly-owned subsidiary in the US to conduct research in multimedia-related technologies: Sharp Laboratories of America Inc in Camas, Washington, is capitalised at $8m and will start operations on July 1 with around 30 research staff with a target of 100 for the full complement; the unit will research digital image processing and telecommunications technologies for potential d evelopments in multimedia hardware, software and systems; Sharp already has two US product design and development centres.
With its Microsoft Corp deal in the tank, Intuit Inc is expanding on its own: the company has scheduled a press conference in Paris for May 30 with Axime SA, one of France’s largest systems integration companies and sources indicate that Intuit plans to announce the creation of Intuit France and of a joint venture with Axime to promote and develop remote personal banking services in the hexagon, as the locals call metropolitan France (a glance at the map explains why).
Commenting on its figures 3DO Co Inc says it expects to turn a profit in fiscal 1997: the company says it is incurring significant engineering expenses in developing its M2 accelerator technology designed to turn 3DO’s current 32-bit player into a 64-bit system offering much faster and more realistic graphics; the company reckons at least 600,000 3DO Interactive Multiplayers have been sold to retail channels, although whether they have found it into peoples’ homes yet is another matter; 3DO told Reuters it plans to do a private equity placing as soon as next week to raise additional cash to get it through this year.financing in the next week or two
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csson Telefon AB is proclaiming a breakthrough in Japan with a turnkey contract with International Telecom Japan Ltd for an international AXE telephone exchange system and Intelligent Network services; value of the order was not given.
It is not clear what the term is, but the US Internal Revenue Service has awarded Unisys Governmment Systems Corp a $520m contract for computer systems under the Service Center Support System contract to provide the primary computer support for its three computing centres, and eventually to replace many of its ageing computer systems.
If the future direction of Wall Street matters to you, you should be extremely worried about the new issues feeding frenzy: solid but tiny companies have been flocking to market in increasing numbers in recent months but now it has reached the point where the attitude is never mind the quality, feel the Internet or the telecommunications or the multimedia connection and new issues routinely sell out at a figure higher than their target range and double and more in price as soon as trading starts: the old hands know that it will all end in tears, both for the companies that will in a few months find their share prices languishing at levels below their flotation price, and all those that bought the shares in the market after flotation at grossly inflated pri ces; the trend is a classic signal that the market is getting dangerously frothy and toppy and signals a widespread sell-off of the entire market, very likely by the autumn if not before; surprisingly, the New York Times did a detailed piece on the current new issues phenomenon but forbore to mention that in the past it has proved to be a classic sell signal.
Without specifying how much, Generale de Service en Informatique SA, one of France’s largest systems integrators, confirmed yesterday that it made a loss in 1994 for the first time since the company was acquired by its employees in 1987: it said turnover rose slightly from the $500m it did in 1993; GSI, which will announce the results on May 30, reported a net profit in 1993 of some $18.4m, down over half on the 1992 figure; the disappointing financial news comes on the heels of further management turmoil, with the resignation Monday of Jacques Bentz, president of the board; Bentz gave no reason for his departure, but apparently no longer wanted to remain on the board after the departure early in the year of five other board members, whom Jacques Raiman, president of GSI Associates, had asked to leave.
Raytheon Co has completed its $64 a share acquisition of E-Systems Inc.
Cray Research Inc has won its first supercomputer order from Medtronic Inc, which wants a Cray J196 for installation this summer at its Centre for Biomaterial Research in Minneapolis; terms were not given but the system costs from $225,000 to $1m; Medtronic wants the machine to do complex computational fluid dynamics and structural analysis simulations for the development of new cardiovascular medical devices.
My job is to get a fair share of the applications market, the Financial Times quotes a very indiscreet Microsoft Corp executive as saying – and to me, that’s 100%.
