When is a deal a deal? Next Level, a $17 stock, had to sell its shares the MOSs, who buy the boxes, for $10.........................................
ijumpstart.com
$4.5bln OpenCable Shoe Drops: NextLevel Scores 15mln-set-top Deal
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NextLevel [NLV] secured a major role in the industry's OpenCable future yesterday as the vendor signed a deal with TCI [TCOMA] and several of its HITS affiliates to supply 6.5-11.9mln advanced set-tops over five years. NLV boasts it has "long-term understandings" worth $4.5bln with at least nine MSOs, but it wouldn't say if it has any actual commitments from ops planning to deploy interoperable OpenCable boxes. "All of this is subject to a definitive agreement," TCI says. NLV also officially announced an early '98 name switch-back to General Instrument Corp. NLV shares jumped 2-7/8 to close at 17-7/8. Acting chief Edward Breen was named chmn/CEO of the new GI. As part of Breen's TCI mega-deal, GI will get the digital transport and authorization functions of the MSO's HITS div in exchange for 10% of GI equity. Eight other MSOs that have "understandings" with GI will receive warrants to buy another 6% of GI at $10 per share.
While the industry is relying on OpenCable to gain a foothold in interactive applications, don't forget that demand for Open Cable set-tops and the applications and services that will run on them remains unclear. "Some high-risk capital is going into [the OpenCable] project," OpenCable chmn Bill Schleyer told reporters at an NCTA briefing yesterday. Look for the first retail OpenCable boxes to hit the market in '99, Schleyer and CableLabs CEO Dick Green said. The retail boxes that meet specs will get an OpenCable stamp. Subs will activate the boxes by buying cards from local ops, Green says. |
