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Technology Stocks : FRANKLIN TELECOM (FCM) -- Ignore unavailable to you. Want to Upgrade?

To: detroit denny who wrote (2633)	4/3/2000 11:01:00 AM
From: George Papadopoulos	Read Replies (1) \| Respond to of 2891

Time to execute this year Frank or retire! AT&T Group to Buy Net2Phone Stake In a Turning Point for Web Telephony THE WALL STREET JOURNAL NEW YORK -- A group of companies led by AT&T Corp. said they will acquire a 39% voting stake in Net2Phone Inc., a fast-growing company that routes low-priced phone calls over the Internet. The announcement capped a dizzying round of courtships that Net2Phone has held in recent weeks with the biggest names of telecom and the Internet. These include America Online Inc. and Yahoo!, which separately announced a $150 million investment in Net2Phone Friday. AOL already holds a 5% stake in Net2Phone but considered taking a majority stake in Net2Phone before AT&T stepped in. It also signals a turning point for Internet telephony. [Amen] The technology has been derided by major telephone companies as carrying scratchy, low-quality calls far inferior to those handled by traditional circuit-switched networks. "We acknowledge that this technology is going to be pervasive on the Internet," said C. Michael Armstrong, AT&T's chairman. "You could say that we wanted to participate in the leadership of this technology rather than chase it." [Please chase us,pleeeease] Broad Partnerships AT&T is partnering with British Telecommunications PLC and Liberty Media Group, its cable-programming tracking stock, to purchase a 32% ownership stake in Net2Phone. The group will buy the $1.4 billion stake from IDT Corp., a Hackensack, N.J., long-distance company that founded Net2Phone in 1997. AT&T, which holds a majority interest in the consortium, is investing $725 million. Under the pact, the group also reserves the right to increase its stake and block any other player from swooping in to buy a majority of Net2Phone. AT&T and Net2Phone officials announced a broad series of partnerships to incorporate Internet phone calls across AT&T, from its dial-up WorldNet Internet service to its cable-TV and wireless networks. The companies said the various groups now invested in Net2Phone will work closely to integrate Internet voice calls into various Web portals and Internet services. Howard Jonas, IDT's chairman and chief executive officer, said he didn't think there would be any conflict among the various parties investing in Net2Phone. "Net2Phone is a standard; it's a way to transport calls," he said. Net2Phone is one of several Internet telephony companies that have sprung up in recent years, including deltathree.com and Phonefree.com Inc (www.phonefree.com). Forced Duel But others say the growth of Internet telephony is quickly forcing a duel between phone companies and Internet companies over who will dominate the changing nature of communications. "This is the first big battle of what is going to be a very long war to see who owns these customers," said Tom Evslin, a former AT&T executive who is chairman of ITXC Corp., a wholesale carrier of Internet phone calls. "The portals and the e-mail addresses have as equal a chance of snagging the consumers as traditional carriers." IDT officials say they were seeking additional investments from AOL and a new investment from Microsoft Corp. AOL and Microsoft declined to comment. AT&T said it expects to save an unspecified amount of money by routing more of its future traffic over the Internet, which can avoid access fees paid to regional Bell carriers and settlement charges paid to complete international calls. Most Internet phone calls are already offered free, or for a penny or two a minute domestically, compared with the lowest rate of five cents a minute that traditional long-distance companies charge. Still, Internet phone calls, which are made by dialing special access codes into phones or through an online provider like Net2Phone, account for only about 2% of all calls completed. [we are still well positioned but let's get moving this year!] AT&T said its investment will knock about a cent off earnings for the next three or four years. The big phone company also acknowledged that it could lose a portion of its long-distance revenues if Internet calling really takes off. But, added Mr. Armstrong, "we don't see a mass substitution or a great big cliff." [Mr. Armstrong, VOIP IS taking off, please buy us out so Frank can gracefully retire and Helen can buy a new house with a high tech roof].