I'm not sure how often ISTrends is published, maybe quarterly, but it's a valuable summary of telecom-related news. I'm always surprised at how many I haven't already read about.
>>>
Information Society Trends
Issue number: 87 - (16.11.1998 - 20.12.1998)
EDITORIAL
AOL becomes new Internet powerhouse
America Online (AOL), the world's leading on-line service provider
with 16 million subscribers, has agreed to spend $4.2 million on
buying Netscape, a world leader in Internet browsers. The venture,
the largest to date in the Internet era, is complemented by a
tree-year alliance with the US computer group Sun Microsystems. The
two-way deal creates the most powerful Internet rival to date for US
PC software giant Microsoft.
The main aim of the merger is to bring together the complementary
resources of AOL and Netscape. So far, AOL has focused on providing
branded interactive services and contents via its on-line services
AOL and Compuserve, for instance the Internet guide Netfind, the
messaging tool Instant Messenger or the chat service ICQ. AOL also
operates one of the most popular Web site, AOL.com, with 20 million
visitors a month. The take-over of Netscape would significantly
increase AOL's market reach with another popular Web portal,
Netcenter, which has 16 million visitors a month. It would also add a
major new dimension to AOL's business through Netscape's suite of
electronic commerce software and applications, which is targeted at
the corporate market. Finally, AOL would inherit a premier Internet
browser, Netscape's Communicator.
Netscape's primary reason for accepting the merger is most probably
survival. Indeed, competition from Microsoft's Explorer browser has
resulted in Netscape losing significant ground in the browser market.
Netscape has managed to redirect its business towards
electronic-commerce software, but its financial situation remains
weak. In fact, AOL itself has contributed to Netscape's decline by
supplying exclusively Microsoft's browser. But AOL's distribution
agreement with Microsoft ends in January 1999. Based on its large
consumer basis, AOL could now give the Communicator a great boost.
AOL's new assets are cemented by an alliance with Sun, which would
provide each partner with new distribution channels for their
products, respectively Sun's electronic- commerce hardware and
Netscape's electronic commerce software. Yet more important would be
the joint development of electronic-commerce solutions based on Sun's
Java universal programming language. The combination with the
Communicator would increase the threat posed by Java to conventional
operating systems, in particular Microsoft's Windows, which it could
make redundant in the on-line world.
In fact, the AOL-Netscape-Sun venture seems clearly directed at
Microsoft. It brings together Microsoft's arch-rivals Sun and
Netscape, which it had tried to defeat in ways the US government has
alleged to be anti-competitive and are the object of a major anti-
trust trial. Ironically, the AOL-Netscape-Sun deal may the best news
for Microsoft ever since US public authorities have launched their
anti-trust lawsuit as it tends to support Microsoft's claim that
competition is not foreclosed in the Internet market. But whatever
the outcome of the coming battle, these development highlight once
more that the commercial development of the Internet remains a US-led
process.
EUROPE
MARKET AND COMPANIES
The US telecoms group Global TeleSystems (GTS) said it has agreed to
spend about 660 million Ecu on purchasing Esprit Telecom, one of
Europe's fastest-growing alternative telecoms operator. The move
would result in the creation of company with a market value of over
3.5 billion Ecu. The combined group would have the largest
independent pan-European network and be present in 19 European
countries by the end of 1999. This would be largely based on Hermes
Europe Railtel, a pan-European fibre optic infrastructure owned 89%
by GTS alongside the Belgian and Swedish national railway companies,
which would connect 33 cities in 16 countries by the end of 1999.
*****
Britain's Zergo Holdings and Ireland's Baltimore Technologies, two
European leaders in cryptographic products and services, said they
agreed to merge in a transaction valued at approximately 48 million
Ecu. The move would create a world leader in the provision of
electronic commerce and enterprise security systems, a market which
is expected to be worth over 3 billion Ecu by the year 2001, with 350
employees and joint revenues in excess of 26 million Ecu. The new
company would combine Zergo and Baltimore's respective strengths in
security solutions for the financial and government markets and in
Public Key Infrastructure (PKI) technology. The combined group would
be the number one player in the area of PKI outside the USA.
*****
The US telecoms equipment manufacturer Motorola has confirmed that it
would join Symbian, a joint venture set up by Britain's Psion, a
leading manufacturer of hand-held computers, and two world leaders in
mobile phones, Finland's Nokia and Sweden's Ericcson. Symbian aims at
promoting Psion's EPOC operating system (OS) as an industry standard
for wireless communication devices. As a result of the alliance,
Psion's shareholding in Symbian would be reduced to 30.7% from
currently 40%, while Ericsson, Nokia and Motorola would have a 23.1%
stake each. Separately, Symbian said it has also agreed to forge a
strategic relationship with the US software group Oracle to enable
EPOC to provide real-time, wireless access to data residing in Oracle
databases. In late 1997, Psion had already licensed EPOC to the Dutch
electronics giant Philips. EPOC competes for global leadership with
Windows CE, the OS for wireless communications and consumer
electronics promoted by US PC software giant Microsoft, which has
gained support from America's Qualcomm, a leading provider of
wireless products.
*****
The Italian public broadcaster RAI said it has agreed to take a 10%
stake in Telepiu, Italy's leading pay-TV group which is 90%-owned by
the French pay-TV giant Canal+ and 10% by the Italian media mogul
Silvio Berlusconi's group Fininvest. The venture is largely perceived
as a move to fence-off attempts by the US media giant News Corp. to
enter the Italian pay-TV market. News Corp., which is controlled by
media mogul Rupert Murdoch, is planning to take a 70% stake in
Stream, the multimedia arm of the incumbent telecoms operator Telecom
Italia, which is to launch a rival pay-TV network. Mr. Murdoch has
so far been unable to enter continental Europe's TV market.
LEGISLATION AND POLICIES
The European Commission has published its fourth report on the
implementation of the 1998 telecoms regulatory package. The report
has found that the bulk of European Union regulation has now been
transposed into Member State legislation, thus effectively opening
telecoms markets to full competition. The overall picture is that of
a dynamic and rapidly evolving EU telecoms market worth 148 billion
Ecu in 1998 and of declining prices of services
(http://www.ispo.cec.be/infosoc/telecompolicy/en/comm-en.htm).
*****
The European Commission has adopted a Green Paper on radio spectrum
policy. While radio spectrum is a key resource for a wide range of
activities including telecoms, broadcasting, transport, research and
public services, it is becoming an increasingly scarce commodity of
considerable economic and political importance. The document
therefore aims at launching a large debate on the definition of a
radio spectrum policy. Examples of key issues include the definition
of criteria for priorities and arbitration regarding spectrum
allocation, as well as striking a balance between commercial and
public interests
(http://www.ispo.cec.be/infosoc/telecompolicy/en/comm-en.htm).
*****
The European Commission has opened a detailed enquiry into the
planned joint venture between the leading US long-distance operator
AT&T and the leading UK telecoms operator BT, which would combine the
two groups' international assets.
*****
The European Commission has cleared an operation by which the leading
US long- distance operator AT&T would acquire full control over the
leading US cable TV operator TCI. The Commission said the merger is
almost entirely focussed on the US market and will only have a
marginal effect on competition in the Internal Market.
SOCIAL, SOCIETAL AND CULTURAL
The Swedish telecoms equipment manufacturer Ericsson, a leading
provider of mobile telephones, said it could axe 10,000 jobs, in
1999, or about 10% of its workforce. The company said the move would
come as a result of declining profit, in particular in the Asian
public network market, due to the global financial crisis.
NORTH AMERICA
MARKET AND COMPANIES
The US telecoms giant AT&T said it has agreed to pay $5 billion for
the data network operations of the US computer giant IBM. IBM Global
Network serves hundreds of large corporations, thousands of SMEs and
more than 1 million individual Internet users worldwide. It has more
than 1,300 dial-up points and dedicated access from over 850 cities
in 59 countries. The move would further boost AT&T's fast-growing
network services unit, AT&T Solutions, in the rapidly expanding
market for Internet Protocol- based corporate services. As a result
of the venture, 5,000 IBM employees would joint AT&T. From IBM's
standpoint, the sale would allow it to cut the cost of maintaining a
telecoms network and to concentrate on its core computer business. As
part of the deal, IBM would outsource a significant portion of its
global networking needs to AT&T.
*****
Havas, the multimedia and publishing arm of the French
communications, building and water giant Vivendi, said it has agreed
to spend $800 million on purchasing America's Cendant Software, a
world leader in electronic publishing. The move is aimed at turning
Havas into a world leader in electronic publishing and to strengthen
its US operations, as the US market accounted for 80% of Cendant's
$600 million net sales in 1998. Cendant develops and distributes
CD-ROM and DVD-ROM-based products under the brand names Adibou,
Blizzard, Knowledge Adventure and Sierra. According to Havas,
Cendant is the world leader in interactive game, the world's number
two in educational software and the world's number three in
lifestyle.
*****
The US PC software giant Microsoft said it has agreed to spend $200
million on taking a 1.5% stake in the US long-distance operator Qwest
Communications International. As a result of the alliance, Qwest
would launch by mid-1999 a full range of corporate Internet
Protocol-based broadband services such as electronic commerce
solutions and Web applications hosting based on Microsoft's Windows
NT operating system. This would enable Microsoft to demonstrate the
capacity of Windows NT to support large-scale corporate systems
handling large amounts of data.
*****
Hughes Electronics, a unit of General Motors, has announced that it
would spend $1.3 billion on purchasing United States Satellite
Broadcasting Company (USSB). USSB would be merged with Hughes's
DirectTV unit, the leading US digital satellite broadcasting (DSB)
group with 4.3 million subscribers. The move comes in response to the
recent acquisition for $1.5 billion by rival EchoStar Communications
of the DSB business of the US media giant News Corp. and its telecoms
partner MCI.
*****
The German electronics giant Siemens and the US networking group 3Com
said they have agreed to form a 87 million Ecu worth US-based joint
venture that would specialise in the development of Internet
Protocol-based telephony, voice and multimedia products for use on
corporate Local Area Networks (LAN). The new company would put its
first products on the market in the course of 1999.
*****
The US computer group Sun Microsystems and the Japanese consumer
electronics giant Matsushita have agreed to cooperate on the
implementation of Sun's Java universal programming language for
consumer electronics. The aim would be to develop the next generation
of network-aware TV sets, phones, personal digital assistants and
traditional consumer appliances. The move reflects the growing
convergence of consumer electronics and computer network
technologies. It would strengthen Sun in its strategy to impose Java
as an industry standard in the on-line environment.
LEGISLATION AND POLICIES
In the framework of the Java licensing contract lawsuit filed by the
US computer group Sun Microsystems against US software giant
Microsoft, US Federal Judge Ronald Whyte has ordered Microsoft to
ship the Java universal programming language in its original version
within 90 days. The decision is based on the fact that the version of
Java integrated in Microsoft's Internet browser Explorer has been
modified. Microsoft said it will appeal the preliminary injunction
ruling. Microsoft argued that the modifications were only aimed at
improving and enhancing Java, something it claims to be entitled to
do under the licensing contract with Sun.
ASIA AND PACIFIC
INFRASTRUCTURE
Japanese private railway companies in the Tokyo areas have unveiled
plans to join forces to enter the telecoms sector in the course of
the year 2000. The 11 companies would build upon their respective
private networks to develop a broadband communications infrastructure
and lease capacity to domestic and foreign telecoms operators. They
could also set up a joint venture to provide high-speed Internet
access.
*****
The Japanese long-distance telecoms operator Japan Telecom, an
affiliate of Japan Railways Group, said it intends to develop a
Internet Protocol (IP) network to handle data communications, which
would launch commercial operation in April 2000. Japan Telecom would
offer cut-price services in competition with the incumbent telecoms
operator Nippon Telegraph and Telephone (NTT) and a joint venture
specialised in corporate data communications which is to be set up by
the Internet service provider Internet Initiative Japan (IIJ), the
car giant Toyota and the electronics giant Sony.
MARKET AND COMPANIES
StarHub, Singapore's second fixed-line telecoms operator, which is to
launch operations in April 2000, has said it would join the global
telecoms alliance which the US and UK telecoms giants AT&T and BT
have agreed to form. StarHub is 20%-owned by BT. The move would deal
a serious blow to the incumbent operator Singapore Telecom, which is
part of WorldPartners, a global alliance led by AT&T which is to be
dissolved by the end 1999 following the decision to join forces with
BT. Indeed, this would preclude Singapore Telecom from joining the
new AT&T-BT alliance, thus leaving the operator without an
international partner. An alternative for Singapore Telecom would be
to join forces with the second largest UK operator Cable & Wireless.
*****
A group of 40 Japanese investors has launched BS Japan, a joint
venture specialised in digital satellite broadcasting, which would
launch operation in late 2000. BS Japan would start to provide
programming free of charge to build a initial consumer basis. This
would comprise one high-definition channel and three conventional
channels.
Also available electronically: ispo.cec.be
E-mail subscription: Majordomo@www.ispo.cec.be;
enter SUBSCRIBE ISTRENDS + your e-mail address
European Commission, Directorate General XIII, Advisor's Team.
Supervisor: Detlef Eckert. Chief editor: Denis Baresch. Editorial
support: Christian Micas.
The contents of "IS Trends" are based on
publicly available information, in particular news articles and press
releases, and do not necessarily reflect the opinion of the European
Commission.
>>>> |
