To: NYBellBoy who wrote (28732 ) 11/17/1997 10:56:00 AM From: Chemsync Respond to of 31386
[Siemens, Motorola plan cable link] Monday November 17, 7:34 am Eastern Time FOCUS-Siemens, Motorola plan TV-phone link Maybe this will get the telcos off their duff! Let the war begin! By Neal Boudette FRANKFURT, Nov 17 (Reuters) - Germany's Siemens AG (OTC BB:SMAWY - news; SIEG.F) and Motorola Inc (NYSE:MOT - news)on Monday joined forces to get a jump on an expected boom for new equipment as telecommunications markets around the world open up to competition. Siemens said its public communications group and Motorola agreed to jointly manufacture and market systems to let cable television companies offer phone services over their networks. With telecommunications markets opening up in Europe on January 1, Siemens and Motorola are expecting a wave of demand from cable TV operators anxious to take on former monopoly telephone carriers. ''By delivering telephony in addition to broadcast, data and other multimedia services, (cable TV operators') networks now turn into full-service access networks,'' said Lothar Schmid, general manager of Siemens' coaxial-cable products department. Over the next five years, ''it will be a multi-billion dollar market. That is certain,'' Siemens spokesman Reiner Schoenrock told Reuters. Industry analysts said the market was likely to grow rapidly, but were not ready to christen it a billion-dollar business just yet. ''It's not that big a thing at the moment, so we haven't started tracking it that closely,'' said a market researcher at Phillips Tarifica Ltd. in London. ''But I'm sure we will.'' The market could stall, if a swarm of new companies offering phone services force sharp price drops, other analysts said. In addition to cable companies, some electric utilities planned to enter the market using new technology that enables them to carry phone calls over their power grids. In electronic trading, Siemens shares were up 2.60 marks at 100.80, slightly ahead of the blue-chip Dax index, which was up 1.48 percent at 3,785.87. Under the agreement, Siemens will license Motorola's cable access communication system (CACS), a software protocol that allows cable systems to transmit data as well as TV programming. Siemens planned to provide switches and software that provide the physical link between cable networks and public telephone systems, Schoenrock said. The link up with Siemens, one of the largest suppliers of telecommunications equipment, would add a second source for CACS-based equipment. Some immediate opportunities were likely in Belgium and the Netherlands, where several cable operators have begun developing telephone services. For example, Holland's A2000, a joint venture between a Philips Electronics NV (NYSE:PHG - news; PHG.AS) unit and US West International (NYSE:USW - news), won a licence earlier this year to offer phone service to 525,000 cable TV subscribers around Amsterdam. It planned to spend 300 million guilders to add telephony to its network. In Belgium, Telenet Holding NV, a venture between several cable groups and US West, planned to add phone services to its cable system in 1998 to compete with state-owned phone company Belgacom. The cable tie-up marks the second strategic link between Siemens and Motorola. They are also working together on a computer memory chip plant in Virginia, and were reportedly considering opening a joint development centre in Germany. Siemens' public communications group offers switches and other equipment used by telephone companies. Its sales in the year ended September 30 rose 23 percent to 14.5 billion marks. ----------------------------------------------------------------------