Siemens Seeks to Equip Cable Networks for Net

MUNICH (03/01/2000) - Siemens AG and two small technology companies yesterday announced plans to help Germany's cable networks get ready for broadband Internet access.

To do so, Siemens is bringing together its networking group with Kathrein-Werke KG, a company that specializes in antenna systems technology, and GAH Communications GmbH, an IT and communications services company, Siemens said in a statement yesterday.

The three companies will form a consortium, called BK-2000 (Broadband cable 2000) that will offer its services to regional cable operators in Germany looking to equip their networks for multimedia applications.

The consortium will replace part of the copper cable network with fiber-optic cable, and help the companies develop and implement new services, Siemens said.

Such services include Internet access at speeds of up to 40M bits per second (bps), telephony over the cable network, and interactive digital television.

Germany's cable network, still largely in the hands of former monopoly carrier Deutsche Telekom AG , is only now being converted to a network that can support Internet-based services. The former monopoly carrier is in the process of spinning off its nationwide cable network into a series of regional carriers in which it will still retain stakes.

Last week , Deutsche Telekom announced the first such sale of a 55 percent stake in the cable network in the state of Nordrhein Westfalen to U.S.-based Callahan Associates International LLC. [See "DT Focus on Expansion, Broadband and Flat-Rates," Feb. 22.]Deutsche Telekom chairman and chief executive officer Ron Sommer recently estimated the entire cable network's value at 30 billion marks (US$15.2 billion).

The Siemens-led consortium expects the value of the market for equipping these cable networks to total 7.5 billion euros (US$7.23 billion) over the next five years, and hopes to get some 30 percent of that. "This market is incredibly lucrative," said Siemens spokesman Harald Hassenmüller today.

The consortium will likely not move its efforts outside of Germany, Hassenmüller said. "Siemens has enough resources to develop similar offers in other countries should the need arise," he said, noting that cable networks throughout Europe still largely go unused as multimedia platforms.

Siemens AG, in Munich and Berlin, can be reached at +49-89-636-00 or at http://www.siemens.de/ Kathrein-Werke, in Rosenheim, Germany, can be reached at http://kathrein.de/.

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