Lack of interest in SNO tender

The multiple activities associated with Deutsche Telekom and France Telecom coupled with a host of rumours about these two leading European telecoms companies dominated the international world of IT and telecommunications during the last two weeks.

It seems that Microsoft is at last becoming serious about security within its products, and has acquired XDegrees, a small company specialising in providing secure information access across the extended enterprise.

Paul Booth, MD, Global Research Partners

At home, the continuing lack of interest in the second national telecoms operator (SNO) tender and the raft of local results stole much of the local ICT headline space.

• we saw good year-end numbers from CS Holdings (revenue and income both up but margins squeezed);
• satisfactory annual figures from Faritec (revenue and net profit both up);
• mediocre full year figures from Grintek (revenue just up but attributable earnings slightly down) and Venfin (15 months, revenue well up but net profit down);
• full-year losses from Crux (revenue also down) and Intervid (but revenues well up);
• a mediocre set of half-year figures from DNA Supply Chain Investments (revenue well up but income significantly down);
• interim losses by Global Technology (although revenue up) and iTouch (although revenue well up); and
• the delay until the end of the month of the listing of Beget Holdings, the first completely new technology stock listing since August 2000.

Additionally, the listing of the shares of Spicer Holdings has been officially terminated and the JSE has advised that the annual results of Casey Investment Holdings contain an emphasis of matter.

[Local]

Other local news included:

• Telkom`s announcement that it is selling the bulk of its property portfolio with a view to re-leasing it back, as part of its strategy to only focus on its core business;
• the news that M-Cell will not be bidding for the SNO tender;
• the failure of MGX and Paracon to agree on the terms for the sale of MGX Software Futures to the latter;
• Cyborg`s merger of its local and international development teams to a base in London;
• the announcement of a restructuring at Faritec that will result in its three business divisions become autonomous entities, and will see a black empowerment partner acquiring 30% of the group;
• the proposed name change of M-Cell to MTN Group;
• the opening of a South African office by ActivCard;
• the resignation of Ray Leonard as chairman of Global Technology (remains CEO); and
• the appointments of Dave Drummond as MD of Acer Africa, David Geeringh as chairman of Global Technology and Roger Daw as executive director of the Computer Society of SA.

• SAP`s announcement of the end to the share-pooling agreement of its founding shareholders;
• the blocking by a bankruptcy-court judge of the sale of Napster to Bertelsmann AG;
• the name change of MACESS to SunGard Workflow Solutions;
• the break up of the proposed CMGI/Engage acquisition deal with the latter now undertaking a buy-out from CMGI;
• an alleged fraud at Technology Resources Industries, Malaysia`s second largest mobile phone operator;
• the launch of Inovis, a company comprising of the acquisitions by Peregrine of Harbinger and Extricity; and
• the likelihood that some 4 000 jobs may be cut as a result of IBM`s acquisition of PricewaterhouseCoopers.

Additionally, look out for possible bankruptcy proceedings of MobilCom AG, following the decision by France Telecom SA to stop its funding commitments to the German mobile company; the possible bid by Vodafone for SFR, the French mobile phone company owned by Vivendi; the possible sell-off by Deutsche Telkom of its Internet arm, T-Online, as a means of reducing its debt; the possible bankruptcy of Poland`s Elektrim; the winner in the battle for Eutelsat SA; the replacement for WorldCom`s interim CEO, John Sidmore, who intends stepping down at the end of the year; and the fate of Telekomunikasi Indonesia, following its failure to close the Ariawest International acquisition.

[International]

Other international news included:

• the appointments of John Bohn as chairman of CorVu, Jim Douglas as CEO of Visionary Systems, Mark Hurd as COO of NCR, Michael Kelly as chairman and CEO of AOL International, Patrick Kenealy as CEO of IDG, Scot Melland as chairman of Dice, Riccardo Ruggiero as co-CEO of Telecom Italia, Mark Skoda as CEO of NextJet Technologies, Russell Stern as CEO of JNI and Roscoe Young as co-CEO of KMC Telecom;
• the resignations of Michel Bon, chairman and CEO of France Telecom; Kelly Conlin, president and CEO of IDG; Joseph Nacchio, chairman and CEO of Qwest Comms; Richard Owen, chairman and CEO of AvantGo; and Gerhard Schmid, CEO of MobilCom;
• the retirement of Ray Oglethorpe, president of AOL; and
• job loss announcements from Avanex, Lantronix, Logica, Napster, Oracle, Pink Roccade NV, Quantum, Telia and Tellabs.

We saw excellent figures from Econet Wireless.

Good numbers were recorded by Portugal Telecom and Take-Two Interactive (back in the black); and satisfactory ones by Carreker (back in the black), Docucorp, LanVision Systems (back in the black), Manatron, Qualstar (back in the black), Telecom Italia, Verint Systems and Verity (back in the black).

Mediocre returns were posted by Adobe, Asustek, Axon Group, Brocker Technology, Computacenter, Geac Computer, Gtech, ITnet, Pink Roccade NV, Quanta Computer, SteelCloud and Temenos Group SA.

Very poor results came from Comverse Technology, Microlog, National Semiconductor (back in the black), Tikit Group, and Volt Information Sciences (back in the black).

Losses were reported by ADE, Algo Vision, Ascom Holding AG, Baltimore Technologies, BATM Advanced Comms, Clinical Computing, Data Translation, DCS Group, e-SIM, Equant, Esterline Technologies, France Telecom, Horizon Technology Group, Host Europe, IDS Group, Intellicorp, Intelligent Environments, Interlinq Software, Knowledge Support Systems Group, Kudelski, Logica, Macro 4, Nettec, Plato Learning, Psion, Remec, Ross Systems, Sorrento Networks, Staffware, Sunday Comms, SurfControl, Swan SA, Teron Group, TransEDA, Ulticom, Versata, Wanadoo and Workflow Management.

Other financial news included share buy-back announcements from Emulex, Manchester Technologies and SemTech; and profit warnings from AMD, AOL, ASML, ATI Technologies, Atos Origin, Chartered Semiconductor, Eastman Kodak, ESS Technology, Fairchild Semiconductor, Hitachi, Honeywell, Inktomi, Intel, InterVoice, Lantronix, Logica, LSI Logic, Lucent Technologies, Marlborough Stirling, Nokia, Philips Electronics, Power-One, SAP, Snap-on, Verity and Zoran.

There were share split announcements from Blue Coat Systems (was Cacheflow) (reverse), Click Commerce (reverse), Commerce One (reverse), InfoSpace (reverse), Intershop Comms AG (reverse) and NetManage (reverse); and a rights issue announcement from Chartered Semiconductor.

Additionally, Intellicorp and PurchasePro have filed for re-organisation under Chapter 11 protection; Teligent has emerged from protection, 15 months after filing for bankruptcy; and World Wireless is re-stating some of its recent results.

Locally

Aqua Online (-25%)
Elexir (-50%)
Global Technology (-35.3%)
Infowave (+25%)
Intervid (+22.6%)
MGX (-25.9%)
Prism (-50%)
Spescom (-23.1%)
Vesta (-66.7%)
Y3K (+100%)

Internationally

Covad Comms (+38.9%)
Easy Software (+69%)
ESS Technology (-35.7%)
Geoworks (-46.2%)
Globecomm Systems (-34.5%)
Horizon Technology (+59.3%)
Marlborough Stirling (-59.8%)
PCD (-59.5%)
Scan-Optics (+34.6%)
SVI (+313.3%)

It seems that Microsoft is at last becoming serious about security within its products, and has acquired XDegrees, a small company specialising in providing secure information access across the extended enterprise. It`s certainly a move in the right direction!