BEE charter takes shape

Telefonica`s multibillion-dollar acquisition of BellSouth`s South American wireless operations dominated the international world of IT and telecommunications last week.

Dimension Data has disposed of Proxicom, the company it bought in May 2001 for $448 million following a major fight with Compaq.

Paul Booth, MD, Global Research Partners

At home, the publication of the first draft of the black economic empowerment (BEE) ICT charter and a number of BEE deals involving technology companies stole much of the local ICT headline space.

* We saw good year-end numbers from Control Instruments (revenue up a little but profit more than doubled);

* An interim loss from AST (revenue also down); and

* A positive trading warning from Connection Group.

Other local news included:

* The 27% investment in BTG South African`s operation by BEE company, Kagiso Trust Investments;

* The 25.4% investment in Spescom by BEE company, Vantage Capital Fund Managers;

* The 30% investment by a consortium that includes Izingwe and Matomo Group, in Altron`s Aberdare Cables;

* The appointment of Hasmukh Gajjar as deputy CEO of Faritec;

* Dimension data sold off Proxicom; and

* Kenya`s third cellular licence was awarded to Econet Wireless International.

* Sony and Samsung intend to invest $2 billion in their new LCD manufacturing joint venture;

* Orange SA reduced its stake in TA Orange to 10%; and

* Lycos bought out Singapore Telecomms` stake in Lycos Asia.

International strategic partnerships were announced between Intuicom, a leader in wireless data networks, and NextBus Information Systems, an IS company involved in the transportation industry.

Additionally, look out for a bid for MCI`s Embratel stake by a consortium of three Brazilian telecoms companies, Telemar, Brasil Telecom Participacoes SA and the Brazilian unit of Telefonica SA.

Other international news included:

* The appointments of Bob Conway as CEO elect of Telemetrix and Robert Keller as CEO of APAC Customer Services;

* The resignations of Jihad Kiwan as president and CEO of Trikon Technologies and Theodore Schwartz as founder and CEO of APAC Customer Services (remains as chairman);

* The retirement of Tim Curtis as CEO of Telemetrix later this year; and

* A job loss announcement from WM-Data AB.

We saw excellent* figures from Essex (back in the black) and SSA Global; and very good* numbers from Comtech Telecomms, Faro Technologies, Golden Telecom and Verint Systems.

Good figures* were recorded by Hector Comms, National Semiconductor (back in the black), TechData (back in the black) and Verity; and satisfactory* ones by eFunds, Elbit Systems, Global Crossing, ICM Computer Group, Iliad, Oracle and SmarTone Telecomms Holdings,

Mediocre* returns came from Comms Systems, DataMirror, Evolving Systems, Ezenia!, InterDigital, Mobilcom AG (but back in the black), Navtech, Ordina NV and T-Online International AG; while very poor results* came from Manchester Technologies (but back in the black).

Losses* were posted by 3D Systems, AirNet Comms, Atos Origin SA, Attunity, Cable Design Technologies, Certicom, Clarus, Comverse Technology, Descartes Systems Group, Deutsche Telekom, DSL.net, Financial Objects, Fisher Comms, Forgent Networks, Gerber Scientific, GoAmerica, HyperFeed, Microvision, Net2Phone, NHC Comms, Nyfix, Opticom ASA, ParkerVision, Pegasus comms, Prosoft Training, QSC AG, RECIF, Reptron Electronics, SteelCloud, TeleTech, TeleWest Comms, TRM, viaLink, Volt Information Sciences, WaveRider Comms, WorldGate Comms and Xybernaut.

Other financial news included analyst upgrades for Agilent Technologies, Dell, Hyperion Solutions, Novellus, Scientific-Atlanta, Varian Semiconductor and Zarlink Semiconductor; analyst downgrades for Enterasys Networks, Infonet Services, Polycom and Sun Microsystems; private placement of shares by RadView Software and VocalTec Comms; share offerings from Richardson Electronics and Sypris Solutions; share buy-back announcements from Applied Materials, infoUSA, KPN, Microchip Technology, SCO Group and UTStarcom; positive results/profit warnings (often veiled) from Chartered Semiconductor, Cymer, Tessera Technologies and Texas Instruments; and negative results/profit warnings (often veiled) from Eastman Kodak, Global Crossing and Verity.

There was a share split announcement from Fair Isaac (3:2); a mediocre IPO from Tom Online; an IPO filing by IT services company, Kanbay International; a possible IPO in New York and Seoul by LG Philips LCD, the LG Electronics/Philips joint venture; and planned IPOs from educational software developer, Blackboard, on Nasdaq and from retail software provider, Attentiv Systems Group, on London`s AIM.

Additionally, Nortel Networks is to re-state its 2003 results and MCI, the former WorldCom, has re-stated its 2000 and 2001 numbers, resulting in a profit reduction of over $74 billion.

Locally

Beget (-14.3%)

Comparex (-55.7%)

Cycad (-33.3%)

CS Holdings (-12.9%)

Edutech (+108.3%)

Global Technology (-33.3%)

Intervid (-15.7%)

Stella Vista (-60%)

Y3K (+400%)

Zaptronix (-33.3%)

Internationally

American Management Systems (+21.3%)

Argonaut Games (-27.7%)

Aspect Comms (-20.5%)

California Micro Devices (-21.1%)

Com21 (+120%)

Enterasys (-24.2%)

GB Group (-28.7%)

Geoworks (+33.3%)

IDN Telecom (-21.7%)

Scan-Optics (+38.5%)

In terms of indices, Nasdaq was down 3.1% and the JSE down 3.1% for the week.

Dimension Data has disposed of Proxicom, the company it bought in May 2001 for $448 million following a major fight with Compaq. The new owner is an affiliate of Gores Technology Group, an organisation that 'owns` numerous technology companies, including SSA Global and Baan.

It evidently paid a paltry sum for it and the deal is supposedly part of the new Dimension Data CEO`s clean-up programme. To me it seems iniquitous that such a large financial transaction, some R3 billion+, can be effectively written-off without any qualms.

* 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 are in excess of 50%.

* Very good: Both revenue and net income growth are in excess of 25%

* 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.