[Miscellaneous news]
I feel as though I'm watching the corn grow --- or waiting for Godot.
At any rate, some Financial Times articles to pass the time:
MONDAY OCTOBER 6 1997
By Paul Betts in Milan
The Italian government gave the go-ahead at the weekend to the sale of its entire stake in Telecom Italia, in spite of the looming threat of a political crisis over its 1998 budget.
ft.com
FT.com guide to : The new telephony MONDAY OCTOBER 6 1997
By Alan Cane
Until recently, I'd never even heard of WorldCom. Yet now it seems to be taking over everything in its path. How is this possible? WorldCom's shock bid for MCI last week signalled the beginning of a new era in which nimble newcomers, with a sharp appreciation of the way technology and competition are undermining the traditional telephone business, can upstage their bigger, more conservative competitors and - probably - get away with it.
What's the new technology and competition you are referring to?
Well, that's quite complicated. The new telephony brings with it its own jargon, its own clusters of acronyms and phrases. On the day it shook the industry with its bid for MCI, for example, WorldCom also bought a CLEC, otherwise known as a competitive local exchange carrier. These are local US telephone companies fighting for market share with the RBOCs, or regional Bell operating companies, which until recently have enjoyed cosy monopolies.
CLECs, and other telecoms operators building new networks, use fibre optic cabling rather than old-fashioned copper. Between 5m and 7m kilometres of fibre is laid around the world each year. Optical fibres transmit flashes of light rather than electricity with the advantages of capacity - 8,000 simultaneous conversations can be squeezed on to a single strand of glass - or high bandwidth.
What's high bandwidth?
Bandwidth refers simply to information-carrying capacity; high bandwidth, or broadband, systems are necessary to transmit multimedia: the moving video images, high fidelity sound and top-quality graphics that will characterise tomorrow's communications. Broadband is about the transmission of digital or computer-based information. The traditional telephone network, on the other hand, was optimised for analogue transmissions. Much of today's focus is on finding ways of breathing enhanced capacity into old networks.
WorldCom has been installing broadband fibre-optic cabling in loops around important financial centres in the US and Europe. For business customers, it makes economic sense to dig up the streets and lay fibre into individual buildings. For residential customers, however, high costs mean that the local loop, as this final connection between subscriber and exchange is called, will be copper for the foreseeable future.
Does this mean that retail customers won't be able to download video
and so on? Fortunately, technologies exist that enable these narrow lanes to pretend to be information superhighways. One approach is to install an ISDN (Integrated Services Digital Network) line, a fully digital connection which does away with the need to convert transmissions from digital to analogue and back again. That can greatly speed up, for example, access to the internet. Installation, however, is complex and expensive.
Telecoms operators have been experimenting with a technology called ADSL which gives a traditional copper telephone line (telephone engineers call it a UTS or unshielded twisted pair) more than 50 times the capacity of a conventional UTS. ADSL will be increasingly important during the next decade or so as a cost-effective way of delivering multimedia to the home.
When you say multimedia, are you talking about internet and such like?
The transmission of data - internet traffic is one example - is growing fast and should exceed the volume of voice traffic early next century. Internet telephony is already a threat to the revenues of traditional operators. Voice calls over the internet travel as small packets of data, each individually addressed. The technology to reassemble the packets into near-perfect voice conversations already exists.
Internet telephone calls can be made from computer to computer or, via an IAP (Internet Access Provider), telephone to telephone. Because charges on the internet are in the form of a monthly fee, an internet customer can make a call to anywhere in the world for the cost of a local call.
Is this the only innovation in voice calls?
No. Wireless is increasingly seen as a low-cost way of delivering telephony to the home and office. A number of operators and manufacturers are deploying fixed radio links, essentially replacing the copper local loop with a radio transmission system.
MEOs and LEOs (medium earth orbit and low earth orbit) are satellite-based mobile phone systems due to come into service at about the turn of the century which should allow telephone conversations at a reasonable price between any two points on the earth's surface no matter how remote.
The most controversial LEO is Teledesic, a $10bn (œ6bn) venture in which Craig McCaw, a US mobile phone pioneer, and Bill Gates of Microsoft both have personal interests. It intends to send broadband signals between satellites 1,400 kilometres above the earth's surface creating an "internet in space". It will offer to carry traffic for other operators forming a natural adjunct to their broadband fibre-optic networks on earth.>>>
Directors meeting: MCI board to discuss WorldCom bid
THURSDAY OCTOBER 9 1997
By Richard Waters and William Lewis in New York and Alan Cane in London
The directors of MCI Communications are due to meet tomorrow to consider last week's $30bn takeover bid from WorldCom, amid signs that the company may be leaning towards opening discussions that could lead to a combination of the two companies.
British Telecommunications, whose $24bn bid for MCI - and its international strategy - has been derailed by the WorldCom bid, said yesterday that it could not comment before MCI's response.
BT denied it was being unco-operative, pointing out that a number of options remained open. "We are beginning the hardball game but nobody is going to say what the game plan is," it said.
Meanwhile, shares in the US telecoms companies seen as the most likely to pursue mergers or acquisitions in the wake of WorldCom's surprise bid continued to rise yesterday after renewed speculation about a merger between AT&T and GTE.
Both companies declined to comment on reports that they were in talks. But telecoms industry executives and Wall Street analysts said such a combination was unlikely in the short term and likely to be only one of a number of possible strategies that AT&T is pursuing.
Shares in Teleport, an operator of local telephone networks that has also been seen as a potential acquisition candidate for AT&T, jumped. The stock gained $1_ during the morning, to trade at $49 5/8.
MCI has been silent since WorldCom's bid eight days ago. It refused yesterday to confirm even the timing of its board meeting. However, it was understood that the meeting is set for tomorrow.
MCI is also understood to consider that a combination with WorldCom would create a group with a strong position in internet communications, leaving it better placed than other large telecoms companies to lead the next technological leap that could see voice traffic migrate to the internet.
WorldCom's involvement in the internet, though only a year old, has seen it become one of the biggest players, while MCI operates a national "backbone" that carries more internet traffic than any of its rivals.
WorldCom, meanwhile, is understood to believe that the potential cost savings from a merger with MCI could be even larger than the first-year savings of $2.5bn it has already projected, growing to $5bn in the fifth year.>>> |
