Wireless consolidation

The $41 billion acquisition of AT&T Wireless by Cingular Wireless dominated the international world of IT and telecommunications last week. At home, the investigations at CS Holdings and the resignation of Enos Banda stole much of the local ICT headline space.

* We saw good interim figures from ERP.com (both revenue and net income up);
* An interim loss from FrontRange (revenue also well down); and
* Trading statements/warnings from AST and Comparex.

Other local news included:

* MGX sold off its 80.4% stake in UK-based DiData Limited;
* The closure of NEC`s local office;
* The creation of Lechabile Storage Solutions;
* The appointments of Abe Mbulawa as MD of Choice Technologies, Dan McMahon as CEO of Lechabile Storage Solutions, Dominic Sewela as interim CEO of Eskom Enterprises and Norman Webster as non-executive chairman of EC-Hold;
* The resignation of Enos Banda, CEO of Eskom Enterprises, which owns Esi-Tel, and interim chairman of the second national operator;
* The termination of the discussions between MGX and Vulisango Technology Investments; and
* The details of the sell-off of Edutech.

The battle for AT&T Wireless is over, with Cingular Wireless, the second largest wireless company in the US, taking over the third largest to create a giant with a potential turnover of more than $32 billion.

Paul Booth, MD, Global Research Partners

New local distributorships included that of Princeton Softech by Datacentrix and Panasonic Africa by World Computer Systems; and new business alliances were announced between arivia.kom and Izazi, DeARX Services and Canadian-based CipherSoft, and Intelsat with both M-Web Africa and UUNet South Africa.

Furthermore, on the local front look out for the quarterly results of Dimension Data`s Asian subsidiary, Datacraft, which are rumoured to be heavily in the red.

* We saw the purchase of AT&T Wireless by Cingular Wireless, the company owned by BellSouth and SBC Comms, following an auction that saw Vodacom losing out.
* An international strategic partnership was announced between Intec Telecom Systems and Telefonica Moviles.

Additionally, look out for the buyer for Telemetrix`s network services operation and the outcome of the talks between KPN and MMO2, which are floundering.

Other international news included:

* The appointments of Eric DeMarco as CEO of wireless facilities, Hajime Satomi as chairman of Sega and Masood Tayebi as executive chairman of Wireless Facilities;
* The resignation of Charles Burdick MD of Telewest Comms; and
* Job loss announcements from PCCW and Software AG.

We saw excellent* figures from Blue Coat Systems (back in the black), CyberOptics (back in the black), Ditech Comms (back in the black), Euronet Worldwide (back in the black), hongkong.com, 1mage Software (back in the black), ICOS Vision Systems NV (back in the black), MTC Technologies, OmniVision Technologies, ViryaNet (back in the black) and Wireless Facilities.

Very good* numbers came from Applied Global Technologies, Applied Materials (back in the black), Arrow Electronics, Avatech Solutions (back in the black), Dataram (back in the black), Formula Systems (back in the black), GSI Commerce (back in the black), Inficon, iPayment (back in the black), Merge Technologies, NetEase.com, Network Appliances, PLDT, Rimage, TCL and Univision Comms.

Good figures* were recorded by BEA Systems, Bonso Electronics, Brooktrout (back in the black), Daktronics, Docucorp, HP, Image Sensing Systems, Intuit, IPIX, MTI Technology (back in the black), Omnicom Group, Ptek Holdings, Photronics (back in the black), QualMark, Radyne ComStream and XETA Technologies.

Satisfactory* figures were posted by American Software, Ansoft (back in the black), Axsys Technologies, Belgacom, CBIZ (back in the black), Cimatron, Cobra Electronics, CompuDyne, Data I/O, DataWave, Emtec (back in the black), GCI, HickoryTech (back in the black), Inter-Tel, ITNet (back in the black), Legend Group, Logility, Pegasystems, ProQuest, Ramtron (back in the black), SI International, SPSS (back in the black), Steria Group, Telecom Italia, Valassis (back in the black) and Veramark Technologies (back in the black).

Mediocre* returns came from ADC Telecomms, AMS, Anteon Technologies, Cognigen Networks, Delphax Technologies (but back in the black), Fargo Electronics, GFI Informatique, Gilat Satellite Networks (but back in the black), MOSAID Technologies (but back in the black), Nextel Comms, PDSi, Serena Software, Stratasys, Transiciel, Unilog SA and Valtech SA.

Very poor results* were posted by Amtech Systems (but back in the black - just), MCT and New Horizons Worldwide.

Losses* came from Acclaim Entertainment, Agilent Technologies, Alamosa Holdings, Anacomp. Analytical Surveys, Bell Microproducts, Charter Comms, Ciena, CommScope, Commtouch, Computer Horizons, CorVu, CoSine Comms, Covad Comms, Credence Systems, Crown Castle International, Dacom, Dialog Semiconductor, Dobson Comms, First Consulting Group, GTC Telecom, Hanaro Telecom, Hynix Semiconductor, Insignia Systems, Internet Gold, ISCO International, ITXC, Kopin, LanOptics, Metro One, Microgen, Micros-to-Mainframes, Nanometrics, NeoMagic, Neon Systems, Onex, Pac-West Telecomms, PerfectData, PPT Vision, Qwest Comms, SCM Microsystems, Silicon Image, Sipex, Socket Comms, Software AG, Telemetrix, Tricom SA, TTI Telecom, UbiquiTel, VerticalNet, Viisage, Voxware and Z-Tel.

Other financial news included an analyst upgrade for ADC; analyst downgrades for Convergys, Dobson Comms and Silicon Labs; private placement of shares by Infowave Software; Rogers Wireless, SGI, SYS Technologies and Telkonet; share offerings from M-Systems and SigmaTel; share buy-back announcements from Ciber, CSI and TI; and a shareholders rights plan from Tibco Software.

There was a positive results/profit warning from KPN; negative results/profit warnings (often veiled) from ADC Telecomms, Ceridian, Clarity Commerce Solutions, Printronix, Software AG and Wireless facilities; share split announcements from CEC Entertainment (3:2), OmniVision Technologies, SanDisk (2:1), Yahoo Japan (2:1) and ZiLOG (reverse 2:1); planned IPOs from Hong Kong`s China Telecom, Torex Retail on London`s ALT and from Chinese Internet company, Tom Online; and an IPO filing by LSI Logic for its storage unit. Additionally, Ceridian is to re-state its financial figures from the year 2000; and RCN is to apply for Chapter 11 bankruptcy protection.

Locally

Faritec (-16.7%)
FrontRange (-9.6%)
Global Technology (+33.3%)
Intervid (+33.3%)
Labat Africa (-20%)
Square One (-16.7%)
Synergy (-33.3%)
Y3K (-80%)
Zaptronix (+33.3%)

Internationally

Allegiance Telecom (-43.2%)
Blue Coat Systems (+26.5%)
Com21 (+100%)
Daisytek (-31.8%)
Dobson Comms (-45.4%)
Financial Objects (+35.6%)
Rambus (+31.6%)
RCN (-51.2%)
Read-Rite (+33.3%)
Retail Decisions (+28.9%)

In terms of indices, the Nasdaq was down 0.8% and the JSE up 1.5% for the week.

The battle for AT&T Wireless is over, with Cingular Wireless, the second largest wireless company in the US, taking over the third largest to create a giant with a potential turnover of more than $32 billion, although the deal still has to have regulatory approval.

The new combined entity boasts a 46 million customer base with coverage in 97 of the top 100 markets in the US. This was the largest 'cash` transaction since the late 1980s.

Vodafone, the world`s second largest mobile phone operator behind Chian Mobile, which lost out, still has an existing 44.3% stake in Verizon Wireless, which it would have to have sold if it had won the auction. The other viable contender that dropped out of the race early was Japan`s NTT DoCoMo.

* N.B.

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.