A busy week on the telecoms front

The Sun Microsystems/Fujitsu deal on Sparc chips and the Sony PDA news dominated the international world of IT and telecommunications last week.

At home, the Vodacom news re Nigeria and the granting of four underserviced area licences by the communications minister stole much of the local ICT headline space.

* We saw mediocre full-year numbers from Y3K (revenue down but profit up);

* A full-year loss by Labat Africa (revenue also down);

* An interim loss from Elexir (revenue also well down);

* A negative trading update from Interconnective Solutions; and

* The formal termination of the listing of Comparex shares.

Other local news included:

* Vodacom withdrew its management contract with Vee Networks (previously Econet Wireless Nigeria) in Nigeria and its pursuance of a shareholding in the same;

* The change in role of Ralph Collins to non-executive chairman of Infowave Holdings from executive chairman;

* The resignation of Andrew Mthembu, deputy CEO of Vodacom;

* Willem Swart moved from Vodacom to the position of CEO at Vee Networks;

* The termination by UCS of persuing any further interest in CS Holdings;

* Internet Solutions purchased its second SAP Solutions business in two weeks, this time Core People; and

* A job loss announcement from Dimension Data.

Additionally, Infowave announced it intends to seek a main board listing (currently in DC sector); and following the recommendations from ICASA, the minister of communications has granted four of the underserviced area licences and referred the remaining three back to ICASA for further consideration.

The latest issue of BusinessWeek highlights its 'Stars of Europe`, and not surprisingly there are a number of individuals from the technology sector featured.

Paul Booth, MD, Global Research Partner

New local distributorships included that of BenQ projectors by Frog Audio Visual, Iteration by Alicornio Africa, Samsung hard drives by Annex Distribution and Seagull`s products by ProScan Systems.

Furthermore, on the local front look out for a potential sell-off by Telekom Malaysia of its stake in Telkom SA and the potential buyer of Tiscali SA. Rumours suggest a shortlist of five companies has been drawn up and a price tag of >R300 million has been touted for the latter.

* Hynix sold off its non-memory business to the private equity arm of Citigroup for over $800 million;

* Sony announced it is to cease production of its handheld PCs for the US and European markets;

* Sun Microsystems announced it would hand over to Fujitsu the bulk of the development of its UltraSparc chips;

* Cybertel Comms Corp changed its name to Cybertel Capital Corp;

* The final departure from Computer Associates of Sanjay Kumar, ex-chairman and CEO; and

* The resolution of the dispute between SCO Group and BayStar Capital, one of its investors.

International acquisitions, mergers, joint ventures etc (see attachment).

Other international news included:

* The appointments of William Freeman as CEO of Cricket Comms, Richard Gold as chairman of California Amplifier, Edward Grady as CEO of Brooks Automation (as from 1 October), Bruce Henderson as chairman of Imation, Wes Hayden as president and CEO of Genesys, Dave Kerford as president of Vector Technologies and Richard Valdez Albizu as chairman of Tricom SA;

* The resignations of Ira Coron as chairman of California Amplifier, Robert Therrien as CEO of Brooks Automation (stays on as chairman) and Terrence Valeski as MD of Eurotel;

* The retirement of William Monahan as CEO and chairman of Imation; and

* Job loss announcements from Seagate Technology and Sprint.

We saw excellent* figures from Auto Data Network, Matrix Comms (back in the black) and Tundra Semiconductor; and very good* numbers from Dataram (back in the black), Micronetics and Ulticom.

Good figures* were recorded by Carphone Warehouse, Comverse Technology (back in the black), Formula Systems (back in the black), Proginet (back in the black) and SkillSoft (back in the black); and satisfactory* ones by Lenova Group (was Legend).

Mediocre* returns came from American Software, Hellenic Telecomms and Verint Systems; while very poor results* came from Logility.

Losses* were posted by Alliance Atlantic Comms, Cable & Wireless, Descartes Systems, Eircom, eOn Comms, Finisar, On Track Innovations, RoboGroup TEK, Synstar, TippingPoint and Ultimate Electronics.

Other financial news included analyst upgrades for Amkor Technology, Entravision Comms, MEMC Electronic Materials, Fairchild Semiconductor, SafeNet and Tier Technologies; analyst downgrades for CACI, eBay, Manugistics, Microchip Technology, Network Associates, Novellus Systems, Oracle, RSA Security and Teradyne; private placement of shares by OSI Systems; private funding obtained for Cambridge Positioning Systems; a share buy-back announcement from Consolidated Graphics; positive results/profit warnings from Asyst Technologies and Canon; negative results/profit warnings (often veiled) from Anite, Manugistics, Seagate Technology and TCL; a share split announcement from Asyst Technologies (3:2); a delayed IPO from Salesforce.com; a good IPO from Global Signal; and planned IPOs from SSA Global Technologies, WebSideStory, a company offering Web analytic technology services and storage subsystem developer, Xyratex. Additionally, Pegasus Satellite filed for Chapter 11 protection.

Locally

AST (+15.5%)
Business Connexion (-11%)
Cape Empowerment Trust (-33.3%)
Control (+12.1%)
CS Holdings (-10.7%)
Elexir (+100%)
Global Technology (-50%)
Intervid (-25%)
MGX (-62.5%)

Internationally

Applied Microsystems (+66.7%)
Delphax Technologies (-21.9%)
Diagonal (+19.2%)
Enherent (+25%)
Level 8 Systems (-22.2%)
NCDI (+18.8%)
Network Equipment Technologies (-18.2%)
SONICblue (+23.1%)
Telewest Comms (-21%)

In terms of indices, Nasdaq was down 0.4% and the JSE down 1.1% for the week.

The latest issue of BusinessWeek highlights its 'Stars of Europe` listings under four headings: managers, financiers, agenda setters and innovators, and not surprisingly there are a number of individuals from the technology sector featured. They are Thierry Breton, chairman and CEO of France Telecom (manager category); Henning Kagermann, CEO of SAP (innovator category); Carl-Henric Svanberg, CEO and president of Ericsson (manager category); and Jon von Tetzchner, CEO of Opera Software (innovator category).

* 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 in excess of 50%.
* Very good: Both revenue and net income growth in excess of 25%.
* Good: Both revenue and net income growth 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.