Telkom wins Telcordia round

No major story dominated the international world of IT and telecommunications last week, a week that included the US`s Thanksgiving celebrations.

With MGX`s not unexpected announcement re its future, the speculation must now be about what Ronnie Price may do with his various IT interests.

Paul Booth, MD, Global Research Partners

At home, the MGX scheme of arrangement and the partial setting-aside of the arbitrator`s partial award re the Telcordia affair with Telkom SA stole much of the local ICT headline space.

* we saw good year-end figures from MTN Nigeria, Trematon (no revenue figures but back in the black) and UCS (revenue and earnings both well up);

* mediocre full-year numbers from Elexir (revenue and earnings both down), Reunert (revenue up but earnings down) and Sekunjalo (revenues just up but earnings down);

* full-year losses from EC-Hold (also revenue significantly down), Maxtec (revenue also well down), MGX Holdings (revenue also down) and Stella Vista (although revenue significantly up);

* excellent half-year numbers from Real Africa Holdings (no revenue figures quoted but back in the black);

* very good interim numbers from Telkom SA (revenue up and profit up more than 100%) and Vodacom (revenue and profits both well up); and

* the de-listing of Softline shares following its acquisition by Sage.

Other local news included:

* the Mustek empowerment deal that will see Safika Holdings acquire voting rights equivalent to 25% plus one share;

* Naspers` first profits from M-Web;

* the establishment of Zycko South Africa via Zycko`s acquisition of Glue Networks;

MGX`s announcement that it is to restructure its operations, de-list from the JSE and change its name to Metrofile Group, its sole material trading operation;

* the announcement of a rights offer from Sekunjalo; and

* the name change of CCC Systems, a division of PM Tech Holdings, to PM Tech Solutions.

Additionally, a new strategic business alliance was announced by AST with US-based Advanced Financial Solutions.

• we saw indications that Swisscom is set to put Debitel, the German telecoms group, up for sale;
• shareholders approved the privatisation of Cysive;
• the continuing saga of Groupe Bull`s financial rescue and its ongoing battle with the European Commission; and
• KPN and Swisscom will sell their 27% shareholding in Cesky Telecom.

Other international news included:

* the appointments of Derek Burney as chairman of Corel, Eric DeMarco as president and COO of Wireless Facilities, Malcolm Fallen as CEO of Kingston Comms, Amish Mehta as interim CEO of Corel, Peter Peterson as chairman of Innovative Software Technologies, Mike Rollins as president and CEO of TVC Telecom and Stuart Schoenmann as president and CEO of CVI Laser; and

* job loss announcements from Autodesk, Quantum and Sprint.

We saw excellent* figures from Sigma Designs (back in the black) and World Information Technology.

Good figures* were recorded by AIT (back in the black), CTI, Digital China, Dycom, QAD and Sea Change International (back in the black).

Satisfactory* figures were reported by Avator, DataMirror (back in the black), Harvey Electronics and RM (back in the black).

Mediocre* returns came from Comarco, Datec, Hellenic Telecomms, SemTech, Tech Data, Unify (but back in the black) and Wegener (back in the black).

Losses* were posted by ASAT Holdings, Credence Systems, Dotronix, eB2B Commerce, Entrada Networks, Flintstone Technologies, Gruppo Formula SpA, Imaging Technologies, Innovation Group, Intec Telecom Systems, Kingston Comms, Leitch Technology, Logic Devices, Lowrance Electronics, Proginet, RDM, Seagull Software, Ultimate Electronics and Versant.

Other financial news included analyst upgrades for Adobe Systems, Fairchild Semiconductor, Mmo2 and Xerox; analyst downgrades for Tech Data; a private placement of shares by Interactive Systems Worldwide; a share offering from NEC; share buy-back announcements from Alaska Comms Systems Group, Network Associates and Telstra; a negative results/profit warning from Anite; share split announcements from NTL Europe (reverse) and Smart Serv (reverse); and a rights issue announcement from Altran Technologies.

There was also an IPO filing by WiFi chipmaker Atheros Comms; a disappointing IPO from distribution company Synnex; and a good IPO from software developer Open Solutions. Additionally, Chinese chipmaker Semiconductor Manufacturing International is expected to list in New York and Hong Kong early next year.

Locally

Aqua Online (+50%)
CompuClearing (-12.1%)
Cycad (+200%)
Elexir (-50%)
Infowave (-10.7%)
Intervid (-12.7%)
Labat Africa (+16.1%)
Pinnacle (-11.6%)
Sethold (+12%)
Telkom (+13%)
Vesta (-10%)

Internationally

Allegiance Telecomms (-25.2%)
Applied Microsystems (+337.5%)
Com21 (+100%)
Covad Comms (+22.3%)
Danka Business (+20.5%)
Eagle Broadband (+25.2%)
Entrada Networks (+30.8%)
Globecomm Systems (+25%)
SEMX (+50%)
VocalTec Comms (+110.8%)

In terms of indices, the Nasdaq was up 3.5% and the JSE up 1.6% for the week.

With MGX`s not unexpected announcement re its future, the speculation must now be about what Ronnie Price may do with his various IT interests that include shareholdings directly and indirectly in EC-Hold, Y3K (another sick child), Eureka Industrial, and of course MGX.

* NB

Guidelines for the categorisation of results are as follows and are always in comparison with the equivalent period for the previous year; pro forma numbers are ignored (the terminology may vary slightly from country to country).

* Excellent: Both revenue and net income growth is in excess of 50%.
* Very good: Both revenue and net income growth is in excess of 25%.
* Good: Both revenue and net income growth is in excess of 10%.
* Satisfactory: Revenue is within 10% of previous year and net income is up.
* Mediocre: Either revenue and/or net income is down.
* Very poor: Net income is less than 1% of revenue.