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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (1926)	5/13/1999 11:43:00 AM
From: Teflon	Read Replies (1) \| Respond to of 54805

chaz, regarding ATHM and its expansion: "CABLE & Wireless Optus is believed to be close to announcing an exclusive deal with @Home Corp, America's number one broadband Internet service provider. Sources yesterday said C&W Optus will have the exclusive use of @Home in Australia for its hybrid fibre coaxial cable network. It is understood that the boards of C&W Optus and its UK parent, Cable & Wireless, both signed off on the deal in London this week. It comes as Telstra also is engaged in talks with US Internet service provider giants, with speculation centring on the second-ranked high-speed cable Internet player Road Runner. Details of the C&W Optus deal are scant at this stage but it is expected to cement the telco's Internet content ahead of the launch of its cable modem service in the second half of 1999. @Home is also likely to take over management of C&W Optus's cable modem rollout. @Home, which is controlled by AT&T Corp, has led its US competitors in developing high-speed Internet delivery, including products such as a 24-hour broadband digital film portal, known as Click Cinema. It reaches about 300,000 homes in the US via its high-speed cable, which it is still building. However, the proposed acquisition of cable TV company MediaOne by AT&T, promises to give @Home access to one in four homes. In Australia, @Home has a ready-made pipe with C&W Optus already passing 2.2 million homes with its broadband cable. But C&W Optus only has 12 per cent of those homes taking either local telephony or pay TV or both. C&W Optus is also a late entrant to the Internet market with just 61,000 Internet customers via Tesltra's local call network. However, on Tuesday, C&W Optus's chief operating officer Paul Donovan told a press briefing on the company's nine-month result, "our HFC network is now beginning to deliver true value". "There is no reason why we cannot obtain the penetration rates achieved overseas." He pointed to the UK experience of penetration levels of around 30 per cent. A C&W Optus spokesman last night refused to comment on "rumour or speculation". However, telco analysts said such a deal would make sense for C&W Optus, which has flagged a second-half ramp up of its cable modem rollout. One telco analyst noted yesterday that C&W Optus this week had secured its broadband domain name, cablenet.com.au. The deal could also lead to a reshaping of some alliances in Australia's emerging Internet sector, particularly for LibertyOne's joint venture with Excite. @Home is buying Excite, one of America's most successful search engines, and plans to use it as a platform for its cable services." I also do not expect AT&T will ever fully buy out the remaining shares in ATHM. It would ruin the trading value of ATHM's stock. Look at what the USA/LCOS deal did to LCOS' share price. It won't happen. ATHM will stay independent but will benefit enormously from AT&T's backing and support. Teflon