A busy week for telecoms

The go-ahead for the Olivetti and Telecom Italia merger and Microsoft`s settlement with AOL Time Warner dominated the international world of IT and telecommunications last week.

Last week saw the hosting of Meta Group`s Metamorphosis 2003 at Caesars Gauteng, at which there were 350 delegates, the largest number ever recorded for this annual event.

Paul Booth, MD, Global Research Partners

At home, the news from the communications minister and the push-ahead for Softline`s de-listing stole much of the local ICT headline space.

* we saw excellent year-end numbers from Synergy (revenue and earnings both well up and back in the black);

* good annual results from Edutech (revenue up and back in the black);

* mediocre annual results from Labat Africa (revenue up a little but earnings down);

* a full-year loss from Casey (revenue also down);

* very poor interims from Elexir (revenue and earnings down);

* a half-year loss by Trematon;

* the formal termination of the listings of Planit, Prada Technologies and UAM; and

* a profit warning from CS Holdings.

Other local news included:

* share re-purchase announcements from Connection Group and Mustek;

* Global Technology disposed of its remaining interest in Temenos Group AG for approximately R51.6 million;

* further news re the de-listing of Softline, despite much opposition to this move; and

* the various announcements from minister Ivy Matsepe-Casaburri re the opening up of the 1800MHz spectrum to MTN and Vodacom, the supply of 4 million free SIM cards for the poor, and an expected SNO decision in Q3.

New local distributorships included that of CMC Networks for GFI, Esquire Technologies for Abit motherboards and graphics cards in southern Africa, Rectron for Toshiba projectors and Sahara Computers for Symantec.

* shareholders approved the merger of Olivetti and Telecom Italia;

* Telefonica SA bid for the remaining 61.4% of Terra Lycos it doesn`t already own; and

* Microsoft`s $750 million settlement deal with AOL Time Warner.

Furthermore, networking specialist Madge Networks NV has been resurrected in the form of Madge, which has acquired the business and assets of Madge Networks` UK trading entities. Netherlands-based Madge Networks filed the Dutch equivalent of Chapter 11 in April.

Also look out for Vodafone`s possible sale of its stake in Japan Telecom to Ripplewood Holdings and the outcome of the bid for Global Crossing by XO Comms.

Other international news included:

* the appointments of George Benjamin as chairman of Relm Wireless and Thomas Oliveri as president and COO of Global Payment Technologies;

* the resignation of Nate Davis, president of XO Comms; and job loss announcements from Arrow Electronics, Cable & Wireless, Entrust, Marconi, Molex, MusicNet and TeliaSonera.

We saw excellent* figures from McData (back in the black), Sigma Designs and VimpelCom; and very good* numbers from QAD (back in the black).

Good figures* were recorded by Navarre, QSC (back in the black), SCO (back in the black) and Take-Two Interactive Software; and satisfactory* figures were posted by Ansoft, Catalyst Semiconductor, Japan Telecom (back in the black), Merant (back in the black), Optio Software (back in the black), SeaChange International (back in the black) and Telekom Austria AG.

Mediocre* returns came from C&D Technologies, CDT, DataMirror (but back in the black), Entrada Networks, Hellenic Telecomms Organisation SA, Legend Group, NuTech Digital (but back in the black), Qwest Comms (but back in the black), SemTech and Tech Data.

Losses* were posted by 8 x 8, Agile Software, AEI Network Services, Amnis Systems, ASAT Holdings, Blue Coat Systems, Comarco, Csii, FirePond, Front Porch Digital, Global Network, Integrated Security Systems, Invensys, IXYS, JD Edwards, LanVision, Marconi, NUR Macroprinters, OTI, Plasmon, Proginet, SYS Technologies, T/R Systems, Timeline, Ultimate Electronics, Verb Exchange, Versant, Vertel and Vodafone.

Other financial news included share buy-back announcements from Keane and VISX; results/profit warnings (often veiled) from 3Com, Entrust, Marconi, Molex and Printronix; and an IPO filing from Crystal Decisions. Additionally, the 3DO Company has filed for Chapter 11 protection; the SEC is to broaden its investigations into Qwest Comms; and Audiovox is to re-state its financial numbers from the year 2000.

Locally

CCG (-33.3%)
Control (+24.3%)
Dimension Data (+24.1%)
Global Technology (-14.3%)
Intervid (-16.7%)
Maxtec (+100%)
MGX (-20.5%)
Pinnacle (+150%)
Synergy (+500%)

Internationally

Avanex (+52%)
i2 Technologies (+56.5%)
IDS Group (+54.2%)
NCD (+80%)
PSC (-54.5%)
RCN (+63.4%)
Redback Networks (+58.6%)
Robocom Systems International (+214.3%)
Rural Cellular (+52.6%)
SEMX (-45.5%)

In terms of indices, the Nasdaq was up 5.7% and the JSE up 3.8% for the week. The Nasdaq closed at its highest level since mid-2002.

Last week saw the hosting of Meta Group`s Metamorphosis 2003 at Caesars Gauteng, at which there were 350 delegates, the largest number ever recorded for this annual event.

This year`s keynote address was "Delivering the Integrated Portfolio: People, Process, Platforms and Performance". Two of the key messages were: find a way to ensure that the organisation understands the value of IT and ensure the maximum involvement of people in the promotion and exploitation of IT in support of the business and its strategy.

I will be away for a few days later this week, so the next issue of Booth`s Bites will be published on 17 June.

* NB

Guidelines for the categorisation of results are as follows. The figures 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 are in excess of 50%.

* Good: Both revenue and net income growth are 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.

* Loss: A loss has been recorded.