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Technology Stocks : Loral Space & Communications -- Ignore unavailable to you. Want to Upgrade?

To: brian h who wrote (5349)	2/15/1999 9:40:00 AM
From: Jeff Vayda	Read Replies (1) \| Respond to of 10852

Loral Orion to align with AboveNet: Loral Orion Network Systems [LOR], a satellite-based provider of high-speed Internet connections for corporate data, video and fax, is seeking to align itself with San Jose, Calif.-based colocation provider AboveNet. If Rockville, Md.-based Loral Orion acquires AboveNet, the combined organization could provide Internet content to its customers faster than they could obtain it from other satellite backbone providers. Although a deal between Loral Orion and AboveNet is not final, an alliance or combination would let the satellite company enhance the value of its services. AboveNet can speed Internet access because it links the services of companies that sell content with those that sell access. AboveNet eliminates multiple connections that slow down traditional public Internet. Loral Orion officials also are interested in offering value-added services in addition to raw Internet access, said David Puente, Loral Orion's vice president of Internet business development. "We provide Internet access, multi-homing in the United States, and additional services that ISPs (Internet Service Providers) are looking for like news feed -- and we are getting ready to roll out a caching service," Puente said. The deal, which is in the final stages of negotiations, would benefit 70 European ISPs that purchase satellite connectivity to the United States from Loral Orion. The colocation of AboveNet's Tysons Corner, Va., facility, located in the same building as the East coast's largest data exchange center, Metropolitan Area Exchange East, will provide those ISPs with much quicker access to Web content in the United States. While AboveNet officers are observing brisk demand from Loral Orion and other satellite companies servicing ISPs in Europe, additional demand is coming from Latin American, African and Asia Pacific countries. Based on AboveNet's research, satellite backbone often is a substitute for national wireline infrastructure in these countries. "Some of these countries don't have basic cable infrastructure," said David Dembitz, AboveNet senior vice president of sales and marketing. ISP industry insiders estimate 90 percent of Internet content is located in the United States. That factor results in an asymmetrical traffic pattern with non-U.S. ISPs receiving much traffic from the United States, but sending little traffic there. This anomaly created a lucrative business model for satellite companies, which sell ISPs one-way traffic via satellite from the United Sates to their country of origin. Loral Orion's satellite-delivered IP backbone service starts at $20,000 a month for 1 Mbps. (David Dembitz, AboveNet, 408/367-6666; David Puente, Loral Orion, 301/258-8101).