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Gold/Mining/Energy : Cybersurf (CY.A) - Bridge between 20th & 21st Centuries -- Ignore unavailable to you. Want to Upgrade?

To: CocoBob who wrote (2135)	7/21/1999 9:10:00 PM
From: LABMAN	Read Replies (2) \| Respond to of 3243

from today's GLOBE AND MAIL Technology Home \| News \| Tech Careers \| Tech Investor \| Search \| Forums \| Help July 21, 1999 Call-Net branches out, acquires stake in Cybersurf Mark Evans Technology Reporter Wednesday, July 21, 1999 Call-Net Enterprises Inc. moved into the fast-growing free Internet access market yesterday by buying 10 per cent of Cybersurf Corp. for $12-million. Call-Net, which owns the country's largest alternative long-distance telephone provider, Sprint Canada Inc., said it acquired 1.72 million Cybersurf shares and warrants to buy seven million more shares at $5 each over the next three years. If the warrants are exercised, Call-Net's stake in the Internet service provider (ISP) would climb to 26 per cent. Brian Harrison, an analyst with Rogers & Partners Securities in Calgary, said the deal gives the free Internet market a significant endorsement and shows how well Cybersurf is positioned to capitalize on its growth. "Cybersurf had this idea a couple years ago, and Call-Net sees this as a great opportunity to get market penetration in Toronto," he said. Cybersurf offers service in Edmonton and Calgary but plans to enter Toronto and Vancouver by year-end and the United States next year. It is unclear how Call-Net's investment in Cybersurf will affect Call-Net's Sprint unit, which charges $22.95 a month for unlimited Internet access. About half of Cybersurf's 115,000 customers in Calgary and Edmonton have come from fee-based Internet service providers. Jim Hardy, an executive vice-president with Toronto-based Call-Net, said the investment complements its Sprint unit, which has 160,000 customers. Call-Net, he said, sees the access market dividing into different economic models: those that generate revenue from monthly fees and those funded by advertising and electronic commerce revenue. "Some Internet users will pay more to have high-speed access and better functionality, and some people will want access to the Web but are not in a financial position to do so in terms of a $20 to $25 commitment a month," he said. A different view, however, comes from Paul Mercia, Cybersurf's president and CEO. "When you're paying $15 to $20 a month for the service and your neighbour is getting it for free, why pay for it?" As part of the deal, Call-Net will become the national supplier of network services to Cybersurf and have two seats on its board. Of the $12-million, Cybersurf will use $7-million to buy network service from Call-Net. Call-Net posted a loss of $125-million or $1.38 a share for the second quarter ended June 30, compared with a loss of $84.7-million or $1.57 a year earlier. Revenue rose 25 per cent to $323.2-million from $258.5-million. The company attributed the loss to increased spending for its new local service networks, as well as further price declines in the long-distance market. Report on Business Company Snapshots are available for: CALL-NET ENTERPRISES INC. Mark Evans finance CallNet Enterprises Inc Cybersurf Corp Home \| News \| Tech Careers \| Tech Investor \| Search \| Forums \| Help Help & Contact Us Back to the top of this page Copyright © 1999 Globe Information Services