I actually don't know which modems Shaw will be buying but it will be interesting to find out. Perhaps they will buy both of them to better evaluate the performance of Doscis versus S-CDMA. Shaw prefer MOT? Did you get that from Shaw?
This is not the first time Motorola has had problems fulfilling their orders. They have had problems fulfilling their chip orders to Apple several times so this is nothing new. You asked me why Motorola did not meet their demands..Maybe it is problems in their production line, maybe they have exceeded their capacity, maybe it is just poor managment, or maybe they didn't want the business. I really don't make a habit of study companies that are not on my radar screen, Pat, and Motorola never perked my interest. There are too many companies to keep track of and it would be a waste of my time.
I just find it curious the amount of time this board spends on a company in which most on this board have no financial interest. I do believe in following the competition, but most certainly not to the degree and scrutiny that as has been done on this board. This is without a doubt the most unusual board I have read online.
Speaking of CMTO, (and I believe, we should be speaking about CMTO) there is news out there if one takes the time to keep up with the company. So because this is the CMTO board according to the header, I will post this for CMTO sharesholders as it an is interesting and informative read.
If you want to discuss Terayon Communications, let's take TERN talk to the TERN board, where TERN investors can participate and benefit from your knowledge and offer their opinions as well. This way the conversation would be balanced and relevant on the appropriate board.
Regards,
Merylee
Monday , May 1, 2000 Sun-Thu at 18:00 (GMT+3)
High Tech Features
Goliath Wins This Time
By Efi Landau
The deal in which Israeli cable telephony modem company
GADLine is being sold to Com21 of the US has three
interesting aspects. One is the financial aspect, the
backdrop to which is the fall of the high-tech shares. The
second is that of the Israeli cable modem industry, which,
once glorious (in theory at least), no longer exists. The third
is the fast Internet market aspect, whose meteoric rate of
progress to all intents and purposes dictated that the
company be sold.
Under the terms of the transaction, Com21 acquired
GADLine for 2.8 million of its own shares. Two weeks ago,
when the deal was about to be concluded, the shares were
worth $170 million. On selling date, one week ago, they
were worth $93 million. Today their value is down to $70
million. It must be admitted that a $170 million deal would
have looked far more impressive, and would certainly have
merited a newspaper headline. $93 million is already small
change, which is proving even smaller.
Today's transaction value is highly problematic, considering
that GADLine's latest capital-raising round, in July 1999, was
conducted at a company value after money of $88 million.
At the time, $4.2 million were raised from the Green Cay
investment group, and $4.8 million from the Ardsley
investment fund. Correct to the present, on paper, instead
of coming out with more than 100% profit, Green Cay and
Ardsley are absorbing losses. This is something new and we
are not accustomed to it.
Founder and general manager David Cohen seems
unmoved by the loss of transaction value and by the fact
that the value of his shares in the deal has been eroded by
$20 million. "All the investors consented to the deal", he
says. "There were more captivating offers with more money
and more security but we did not believe in them. This is a
company we do believe in. We also want to keep the
employees. We will not sell activity to a company that will
close down in two weeks time. As regards the value of the
shares, we are not worried. We are sure Com21 will revert to
its usual dimensions".
The company was owned, prior to the transaction, by Telrad
(13.8%), Steps of the Arison group (9.2%), Gideon Tahan
(21%), US investment bank GKM (25%), and US investment
companies Ardsley and Green-Cay (4.8% each).
Religiously observant David Cohen and Gideon Tahan
founded GADLine in 1991. Both were formerly employed by
Phasecom, Israel's first cable modem company, which
seems to have been ahead of its time. Phasecom, currently
owned by Davidi Gilo, changed its name to Vyyo and
converted from cable modem to wireless. Not long ago the
company made a successful IPO on New York's NASDAQ.
On leaving Phasecom, Cohen and Tahan rented a sort of
stairwell in Jerusalem for $100 a month, and set up a factory
for cable TV systems. Within a year they were occupying an
office on Har Hotzvim in Jerusalem, with 15 employees.
Since that time, the number has been doubling itself
annually. Today, the company has a payroll of 120
employees in the Har Hotzvim plant and in the installation
centre it opened in Lod, and another 15 in offices in Munich
and Miami.
GadLine's digital cable telephony modem has exits to the
telephony network, to an ISDN line, to the home computer,
the television and the cable network. It downloads files at a
rate of 30 Megabytes, and provides a 10 Megabyte return
channel. The company has installed at its call-in centre a
special router that routes Internet transmissions to
customers' homes. Telephone calls will arrive from a public
exchange.
Israel was a major power of cable modem manufacturers,
but the domestic market all but wiped them out. Companies
such as Telegate, NMC, Comvox, NetGame, Shiron and
GADLine waged fierce battles here with the Ministry of
Communications in an attempt to obtain permits to conduct
marketing trials here, but met with a sweeping refusal, even
though a public committee at the time recommended an
affirmative response. The Ministry only issued a handful of
licenses for needless technological trials, which were
conducted solely for the purpose of maintaining positions.
The technology itself had already been tried and proven
elsewhere.
Only two of those companies developed modems for
telephony as well as Internet. These were Telegate and
GADLine. Telegate obtained permission for a trial, but never
actually conducted one. GADLine, on the other hand, is
setting up a trial in Shoham with cable television company
Tevel.
GADLine had two large trial balloons, major overseas
projects that exploded. One of them, in China, was held
jointly with Elbit.com. The operation succeeded but the
patient died. Elbit decided to pull out of the project, which its
calculations showed to be uneconomic.
In South Korea, GADLine participated in a tender together
with Samsung, to set up a 1.5 million-subscriber network.
The bottom line is that apart from development financing,
the gigantic Korean project, which was supposed to reach a
volume of $200 million, remained nothing but a dream.
GADLine today has twenty trial installations of modems for
telephony over cable TV infrastructure, and a single
commercial installation in Germany. In November 1999,
GADLine won a tender in Colombia for the supply of
integrated communications services including public
telephony and Internet. The first, in the town of Magdalena,
was for $600,000.
GADLine's hottest topic today is the development of
modems for telephony over Internet. In this field, GADLine is
among the most progressive companies in the world, and its
approach to setting up the network is unique. Development
is being performed for GADLine by Internet Telecom of
Jerusalem, sold not long ago to Terayon. Terayon is known
for developing the VOIP technology used by Delta-3 of the
Lauder group, which is one of the largest plants in the world
today for telephony services on Internet.
Following the capital raising exercise of July 1999, GADLine
started talking about the next stage, that of a public
offering. But it was merely a dream. "An IPO would have
been fine", Cohen says, "but it would not have altered the
problem, which is time to market. We could have raised
money, but time was running out. If I couldn't get to market
in recent years, I have to stand in the shoes of a company
that has done it".
The sale of GADLine is the last in a series of acquisitions of
Israeli cable modem companies. NMC was acquired by
Harmonic Lightwaves, Telegate and Comverse were
acquired by Terayon. Texas Instruments acquired Libit
Signal Processing, which manufactures chips for this market,
was acquired by Texas Instruments. There remain Shiron,
which deals in satellite modems, and NetGame, in which
Intel recently invested. |
