Is the end in sight for the cell saga?

The Alcatel/Lucent merger talks breakdown dominated the international world of IT and telecommunications in a week that was shortened by a public holiday in the UK and US.

[VIDEO]At home, the supposed withdrawal of the appeal against the awarding of the third cellular licence to Cell C by Nextcom and an associated deal between the two companies; and the ERP.com/PeopleSoft deal stole much of the local news headline space.

• we saw good full-year numbers from Intervid (revenue and earnings up);
• satisfactory full-year result from Cape Empowerment Trust (revenue well down but sale of Dynamic Cables significant in improved bottom line) and Infowave Holdings (revenue slightly down but back in the black);
• disappointing year-end figures from OAI (revenue slightly down but earnings well down) and Softline (revenue down and earnings well down);
• very disappointing maiden year-end figures from Sempres (significantly down on forecast);
• full-year losses from Casey Investment Holdings (revenue also down by over 50%), Jasco (revenue marginally up but a heavy loss), OSI Holdings (revenue also down), Planit Technology Holdings (also revenue down by nearly 50%) and Synergy (and revenue down nearly 50%);
• a satisfactory half-year performance from Vesta Technology Holdings (revenue well down but net profit static); and
• interim losses from Sekunjalo Investments (revenue also well down) and Set Point Technology Holdings (revenue also down). As expected, Seartec`s shares were suspended following the arrangement with its parent company to buy-out the outstanding shares.

[Local]

Other local news included:

• the awarding of the distributorship for SA by PeopleSoft to ERP.com, but structured via a model previously not seen in SA;
• Softline`s announcement of a multi-faceted transaction that should see its exposure to and shareholding in SVI Solutions significantly diminished;
• the news that Global Technology`s international partner, Temenos Group AG, in which it has a 20% stake, has applied for a listing on the Swiss Stock Exchange;
• the announcement that Orbtech`s US parent, Et Voila, has won approval to list on the Nasdaq exchange; and
• the opening of a local Johannesburg office by Intelsat, its first in Africa.
• Furthermore, Dimension Data announced some job losses, and Woza, the news portal founded five years ago, has shut down following the withdrawal of support from its major investor, Bytes Technology Group.

Let`s hope that [the cell licence saga] can be brought to a successful conclusion very quickly; competition to Telkom is urgently needed.

Paul Booth, MD, Global Research Partners

Additionally, there still seems to be confusion re the top management situation at Oracle SA; although it is likely that Lenore Kerrigan will go and that SA will become part of the UK operation.

• we saw the breakdown of the talks between Alcatel and Lucent;
• the suspension of trading on the Australian Stock Exchange by One.Tel, a major telecoms group; and
• the possibility of a sell-out by Kymata, an opto-electronics company based in Scotland.
• Additionally, British Telecom and Telenor have decided to split Telenordia, their Swedish fixed-line joint venture.

[International]

Other international news included:

• the appointments of Paul Birch as COO and CFO of Geac Computer, Ian Hughes as CEO of VDC Comms, Jeffrey Stoops as CEO of SBA Comms and Mark Templeton as CEO of Citrix Systems; and
• job loss announcements from Alcatel, Cognos, CompUSA, EMC, Extended Systems, Ibis Technology, Invensys, McLeodUSA, Nx Networks, Palm, Pinnacle Systems, STMicroelectronics NV and Tiscali.

We saw excellent figures from Ulticom.

Good numbers were recorded by Ansoft, Vimpel-Comms (back in the black) and Plato Learning; and satisfactory ones by Invensys, Proginet (back in the black) and Plasmon.

Mediocre returns came from Catalyst Semiconductor, Finisar, KPN NV, LanVision Systems, Silverline Technologies, Tech Data and Telekom Austria Group; while very poor results came from California Amplifier (but back in the black) and Tundra Semiconductor.

Losses came from 365 Corp, African Lakes Corp, COM DEV, Crayfish, eDispatch, Eidos, Electronics Data Processing, eNetpc, eOn Comms, Glentel, Infocorp, International Datacasting, Korea Thrunet, Memotec Comms, Momentum Business Applications, NTS, Optio Software, Peerless Systems, Photonics, PrimaCom, Pumatech, QAD, RoboGroup, Sigma Designs, Trintech Group, Video Display, VoiceIQ, VTEL and Xplore Technologies.

Other financial news included profit warnings from Alcatel, Altera, BellSouth, Cognos, EMC, Extended Systems, inSilicon, Invensys, Ixia, Sun Microsystems, Tech Data and Tellabs; and an IPO filing from chip software company, HPL Technology. Additionally, PSINet and 24 of its operating subsidiaries in the US have filed for Chapter 11 protection and four Canadian subsidiaries have also filed for protection under the CCAA statutes enacted in Canada; and Xerox has to re-state its results from the last three years.

Locally

Cyberhost (-25%)
Elexir (+20%)
Explorer (-33.3%)
JemTech (+25%)
Netactive (+50%)
OAI (-21.9%)
Oxbridge (-50%)
Paradigm (+100%)
Softline (-21.3%)
Stella Vista (-20%)
UAM (-20%)

Internationally

Arch Wireless (-27.1%)
Avanex (-26%)
Cyberian Outpost (-34.8%)
Frontline Comms (-30%)
IDT (-45.1%)
Intraware (-28.8%)
KPN Telecom (-26.1%)
Lightning Rod Software (+63.2%)
Network Appliance (-26.8%)
Proxicom (-28.2%)
Video Display (-28.8%)

It seems that the Nextcom/Cell C row may be coming to a conclusion just in time, as the initial documents re the second fixed-line operation are due out in July/August. Let`s hope that process can be brought to a successful conclusion very quickly; competition to Telkom is urgently needed.