IBM To Bring World Wide Web To France's Millions Of Minitel Users
Dow Jones Online News, Tuesday, October 06, 1998 at 01:07
(Published on Monday, October 05, 1998 at 22:05)
By Raju Narisetti, Staff Reporter of The Wall Street Journal
France Telecom SA has selected International Business Machines Corp.
to develop software and services that could bring the World Wide Web to
millions of customers who use Minitel, the French national computer
network, according to people familiar with the agreement.
The move, expected to be announced Tuesday by France Telecom, could
spell the beginning of the end of France's isolation from the Internet
and jump-start efforts to update the Minitel network. The popular
Minitel system, one of the world's first online services, fell well
behind as other countries quickly embraced the Web.
While the Minitel is wildly successful -- it has 35 million
subscribers who use the boxy terminals for everything from checking
train reservations to shopping and paying bills -- only about 3% of the
French population uses the Internet, compared with about 20% in the U.S.
and 9% in the U.K. and Germany.
Under the proposed agreement, IBM will roll out a pilot program in
1999 with a new software platform that will allow France Telecom to
offer Internet-related services to its customers. France Telecom is
expected to team up with other local technology companies, which will be
asked to develop new devices that will eventually replace the millions
of Minitel terminals with state-of-the-art Internet devices, say people
familiar with the plan.
In addition to upgrading the Minitel, both France Telecom and IBM are
expected to jointly market the new system to national telecommunications
providers in other countries. The new system will be based, in part, on
the Java programming language of Sun Microsystems Inc.
Terms of the agreement between IBM and France Telecom weren't
available. France Telecom executives couldn't immediately be reached for
comment. A spokesman for IBM, Armonk, N.Y., declined to comment.
A successful transition to a modern Web-based system is critical for
France Telecom, the state-controlled telecommunications provider that
owns the Minitel network. Minitel terminals are used by tens of
thousands of French shoppers to buy billions of dollars in goods and
services, generating about $1 billion in annual e-commerce access
revenue for France Telecom. As a result, France Telecom has maintained
that it wants to develop a hybrid system that will, at least initially,
let users access both the Minitel and the Internet from the same
next-generation terminals.
For IBM, which has built a big, global-services business, the Minitel
contract represents a prestigious win, reinforcing its image as a
provider of solutions to massive technology-infrastructure problems.
The agreement will also likely spur speculation about France
Telecom's standing in bidding for IBM's global-data network. IBM has
hired Merrill Lynch & Co. to find a buyer for the network, which brings
in an estimated $2 billion in annual revenue, and several other
potential buyers are also in the running to acquire it, including AT&T
Corp., British Telecom and Japan's Nippon Telegraph & Telephone Corp.
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