Bertelsmann rescues Napster

The buy-out of Napster by Bertelsmann AG and the restructuring and various other activities at AOL and WorldCom following their recent quarterly results, dominated the international world of IT and telecommunications last week.

Last week saw the rejection recommendation, yet again, by the Idion board re DataMirror`s latest offer.

Paul Booth, MD, Global Research Partners

At home, the DataMirror/Idion battle and the announcements re the second national operator took up much of the local IT/telecoms headline space.

* we saw satisfactory year-end numbers from Altron (revenue up and earnings up - just);

* mediocre interim figures from Paracon Holdings (revenue just up but attributable profit down);

* half-year loss from Dimension Data (revenue also down) and Maxtec (revenue also down); and

* the equivalent of a "profit warning" from AST, Dimension Data (Datacraft Asia) and Grintek.

[Local]

Other local news included:

* the rejection recommendation, yet again, by the Idion board re DataMirror`s latest offer, and the sell-off by Coronation of its shareholding in Idion;

* the provisional liquidation of hardware distributor CompuComp and the closure of Pretoria-based distributor, MPC;

* the announcement from the Black IT Forum that only about 15 of about 150 IT companies are likely to pass the strict criteria drawn up that identifies true empowerment organisations; and

* the announcement that the second national operator consortium selection is to go ahead, with the empowerment group decision to be made first, and an expectation that the licence will be issued by year-end.

* we saw the removal of WorldCom from the S&P 500 index;

* Lason`s sale of its consolidated reprographics business unit and nine other non-core businesses for nearly $40 million;

* the announcement that NEC is to spin-off its semiconductor operations into a separate company and also look for investors for its plasma display panel business;

* the name changes of National TechTeam to TechTeam Global and TSK America to Accretech USA; and

* the break-up of China Telecom into two companies prior to each being the subject of an IPO.

Additionally, look out for the possible buy-out of Casema, the Dutch cable unit of France Telecom by Liberty Media in a deal worth $800 million.

[International]

Other international news included:

* the appointments of Toby Bennett as president and CEO of TSI TelSys and Jeff Fraser as CEO of NIC;

* the resignations of David Hayden, founder and chairman of Critical Path, Harry Herington, CEO of NIC, and Sir Ralph Robins, chairman of Cable & Wireless; and

* job loss announcements from British Telecom, Deutsche Telekom, E.piphany, SBC Comms and WatchGuard Technologies.

We saw excellent figures from Advant-e, Electronic Systems Technology, I/OMagic (back in the black), Viseon (back in the black) and Xfone.

Good numbers were recorded by ADDvantage Technologies Group, MAI Systems, Phonetime (back in the black), Telefonica Moviles, Telesystem International Wireless (back in the black) and TTI Telecom International.

Satisfactory figures were posted by ACTV (back in the black), Acxiom (back in the black), British Telecom (back in the black), Brocade Comms systems, CorVu, CSC (back in the black), Dell, DTVN Holdings (back in the black), eSpeed, GlobalSCAPE (back in the black), GTDATA (back in the black), Intuit (back in the black), Merrimac (back in the black), NetNation, Netsmart, Network Appliance (back in the black), Optelecom (back in the black), Photronics (back in the black), Systemax and Virtual Academics.

Mediocre returns came from Acxiom (but back in the black), ADIC, Amtech Systems, Anacomp, Analog Devices, Applied Materials, Autodesk, Azian, BEA Systems, Brady, Category 5 Technologies, Comdial (but back in the black), Deltek, Eidos (but back in the black), Global Maintech, Group 1 Software, HP, iGate, Integral Systems, Interactive Systems Worldwide, Miltope (but back in the black), Niku (back in the black), On-Site, Score One, Serena Software, SkillSoft, Swisscom AG, Techdyne, Telefonica and TSI Telecomms Services.

Very poor results were posted by Metrologic Instruments (but back in the black) and Pacific Internet (but back in the black).

Losses were reported by @Track Comms, AdStar, Advanced Lighting Technologies, Affinity Technology Group, Agilent Technologies, Aladdin Systems, American Superconductor, Andrea Electronics, AOL Latin America, Applied Graphics Technologies, Arel, Astea International, Asyst Technologies, AT&T Latin America, Avery Comms, Axcess, Boundless, Cable & Wireless, CE Software, Cedara Software, CenterSpan Comms, chinadotcom, Cimetrix, Clare, ClickNsettle, CNT, Cobra, Cognigen Networks, Commtouch, Computer Associates, Covista Comms, Csii, Cybertel Comms, Data Systems and Software, Datalex, Daou Systems, Davel Comms, Daw Technologies, Dicom Group, Digital Power, Digital Video Solutions, Dot Hill, Dotronix, DTS, Dynacore Holdings, eB2B Commerce, Eiger Technology, Elephant Talk Comms, eMagin, enherent, Essex, FiberCore, FiberNet, FullNet Comms, Futuremedia plc., Giga-Tronics, GigaMedia, Gilat Satellite Networks, Glentel, Globalstar, Globix, GoAmerica, Gray Comms Systems, I-Link, Image-Sensing Systems, ImageWare Systems, Infinite Group, Integrated Information Systems, Intelli-Check, Interliant, Key3Media Group, Keyware Technologies NV, Knology, L90, Learn2, Level 8 Systems, Lumenon Innovative Lightwave Technology, LTX, MasTec, McLeodUSA, Medix, MFIC, Microtel, MindArrow Systems, MobilCom, MPSI, National Datacomputer, nCipher Plc., NCT Group, Nematron, NeoMagic, NeoMedia Technologies, NEON Comms, Net (Globo Cabo), NetLojix Comms, Network-1 Security Solutions, Nice Systems, Norsat International, Novo Networks, nStor Technologies, NTT, Nuvo Network Management, ORBIT/FR, Pegasus Comms, Pemstar, Portal Software, Primal, Pro Tech Comms, RAE Systems, Rare Medium, Redbus Interhouse Plc., Relm Wireless, Repeater Technologies, RiverSoft, SatCon Technology, Scitex, SEEC, Simtek, Simtrol, SmartDisk, SmartServ, Speedus, Spescom Software, SSGI, STM Wireless, Storage Area Networks, Summus, Superior Telecom, Teknowledge, Tele Atlas NV, Telenetics, Teltronics, TenFold, The Alpine Group, United Pan-Europe Comms NV, Unity Wireless, US Wireless Data, USOL Holdings, Versatile Mobile, Via Net.Works, ViaSat, Visual Data, Vizacom, Voice Mobility, Wave Systems, Wind River Systems, World Am Comms, WorldPort Comms, XO Comms, Zi and Ziff Davis Media.

Other financial news included a share buy-back announcement from Click Commerce; profit warnings from Autodesk, CMG, RiverSoft, Preferred Voice and Trintech Group; a share split announcement from Trintech Group (reverse); an IPO announcement by Marconi that it is to float its Strategic Comms Business on the Milan Stock Exchange; and a disappointing IPO from Verint (security software).

Additionally, the UK operations of European Telecom have been put into administration; KPNQwest is facing a massive cash crisis; Enterasys is to re-state last year`s results; and Network Associates is to re-state its 1998, 1999 and 2000 financial statements.

Locally

Aqua Online (+27.3%)
CCG (-28.6%)
Crux (+50%)
Dectronic (-25%)
Elexir (-40%)
FrontRange (+35.5%)
Hicor (+40%)
MB Technologies (+21.2%)
Synergy (+33.3%)
Y3K (-75%)

Internationally

Arch Wireless (-61.7%)
Asyst (+36.1%)
BackWeb (+50.8%)
CompleTel Europe NV (-39%)
Dobson Comms (+44.1%)
Enterasys (+54%)
i2 Technologies (+42.2%)
Knowledge Management Software (-53.3%)
KPNQwest NV (-66.7%)
Redback Networks (+70.5%)

The US Securities and Exchange Commission (SEC) is extending its investigations into IT and telecoms companies following the discovery of many irregularities. Those currently under SEC scrutiny include Computer Associates, Enterasys Networks, Global Crossing, Lucent Technologies, Qwest Comms and WorldCom. With so many casualties within the local market, maybe there should be some similar activities undertaken in SA.