Cisco cools off on Request DSL deal

Early in the week Cisco Systems and Western Australian telecomms company Request DSL "concluded a further phase of negotiations", which did not result in the hoped for equity investment by the US company. Instead, a vendor-financing package will be made available by Cisco Systems Capital, and the two companies will undertake a joint marketing campaign in Australia.

"Cisco will work in conjunction with Request DSL on joint sales and marketing via the Cisco Jumpstart program and by offering a wholesale ADSL services to Cisco's ISP, enterprise and small and medium business markets," a Request spokesman explained.

"Cisco will continue to work with Request DSL in the design, deployment, and maintenance associated with the building of a nationwide broadband network in Australia."

The reshaped relationship between the two companies has done nothing to shake Request's resolve to seek a listing on the ASX before the end of this year in order to raise funds for its initial network deployment.

NetComm picks up a slice of US Linux playerAs a result of taking a 20 per cent stake in Queensland embedded Linux developer Moreton Bay last December, NetComm has earned itself a stake in US Linux company Lineo. The shareholding came after Moreton Bay was acquired by Lineo, and modem manufacturer NetComm swapped its Moreton Bay holding for shares in Lineo.

"As a result of this, NetComm's part-purchase of Moreton Bay has so far delivered an accounting profit of close to $A1 million," a spokesman claimed. Further windfalls may be in the offing, since Lineo has now registered with the US Securities and Exchange Commission for an IPO.

"Linux is surging in popularity in the United States and this is reflected by the strong share market performance of Linux-focused companies," noted David Stewart, managing director of NetComm. "We anticipate our shareholders will see NetComm's initial investment in Moreton Bay continue to produce further strong financial returns."

CircleCom launches broadband services in SingaporeListed telco CircleCom will launch a broadband wireless network in Singapore on the back of an agreement it has negotiated with Asian satellite company Skyhub Asia. As a result of the deal the two companies will form a joint venture - CircleSky Pte Ltd -- within which CircleCom will be responsible for marketing a portfolio of communication services in Singapore and Indonesia. Skyhub will take responsibility for the satellite technology and associated training.

A spokesman said the wireless markets of Singapore and Indonesia represent a multi-million dollar opportunity for services and applications suppliers. "Currently market penetration is about 30 per cent in Singapore and only one per cent for Indonesia, and the markets are expected to achieve penetration rates of 50 percent in Singapore and 15 per cent in Indonesia within two years," the spokesman explained.

New Tel needs $200m for China push

Listed telcom New Tel has confirmed it will seek to raise $A200 million to support its China Internet Project, which involves the development of a Chinese ISP and Chinese language portal. The company has signed up the Xinhua news agency as a joint venture partner and is working with a number of government-owned enterprises in China.

"The project covers the development of a fully integrated business, involving ISP operations, Internet content provider operations and a Chinese language portal called nihao2000.com," a spokesman explained.

New Tel is not focusing solely on China for its future, however, but is also assessing Web-related opportunities in Australia, Hong Kong and the US, the spokesman added.

Business briefs on the home front

Utility Services Corp has agreed to buy Sydney e-commerce consulting firm Prospect Management Consulting for $A4 million in cash and shares. Prospect will be run alongside USC's IT arm MITS. A spokesman said that although the businesses would have a collaborative relationship they would be run independently.

Ezyimage, a joint venture that was formed between Earth Resource Mapping (ERM) and Golden State Resources to exploit ERM's technology for the transmission of very large graphics files over the Internet, is planning an IPO. A spokesman noted that the company would like its ASX listing to take place at about the time of the Olympics or in the fourth quarter of this year.

One of the many obstacles to Telstra's giant deal with Hong Kong company Pacific Century CyberWorks was overcome this week when PCCW's shareholders approved the takeover of Cable & Wireless HKT. The merged entity is expected to have a debt of about $US6 billion by the time the deal is complete. C&W HKT shareholders will vote on the transaction on July 3.

Born again Western Australian miner Swiftel has decided to offload all of its mineral resources interests to subsidiary Platinum Australia, which will be listed on the ASX. Swiftel values the assets at $A1.3 million.

Business briefs from abroad

Computer Sciences Corp has agreed to buy insurance industry software developer Mynd Corp, which was once known as Policy Management Systems, for about $US568 million. As a result of the decision the two will drop court action in which CSC alleged Mynd had used former CSC employees to develop competing software.

Reports from Japan indicate that Hitachi and IBM are to enter a strategic alliance over the development and manufacture of mainframe systems. Although the companies have not commented, the reports claimed the collaboration will involve a CPU for a mainframe that Hitachi will release next year, and the supply of Hitachi encryption technology and network-related software to IBM.

Dell and Red Hat have entered an alliance though which Dell has adopted Red Hat's version of Linux as its third operating system - along with Windows and NetWare. Dell expects the deal to boost its fortunes in the Internet arena by allowing it to compete with Sun and its Solaris operating system, which are very strong in the rack-mounted, front-end server market.

Andersen Consulting has joined forces with British Telecom to form a venture that will provide outsourced human resources services with an Internet component. E-Peopleservice will initially fulfil the HR requirements of the principals but will later offer its services to large corporations.

Philips Semiconductors has bought IBM's MiCRUS Semiconductor operation, which produces silicon wafers in the US. In the wake of the deal Philips will have six facilities producing eight inch wafers, including wholly owned plants and joint ventures.

Corporate Quarters

In its fourth quarter to May 31, Oracle lifted revenue from $US2.9 billion a year ago to $US3.4 billion, while adjusted net profit jumped 76 per cent from $US527 million to $US926 million. Analysts were quick to note that revenue from applications software jumped 61 per cent to $US447 million, while core database sales grew just 12 per cent to $US1.2 billion.

Troubled Canadian company Corel made a loss of $US23.6 million on revenue of $US36.6 million in its second quarter to May 31. A year earlier the company made a net profit of $US9.2 million on revenue of $US70.5 million. Holding only $US9.9 million in cash at the end of the quarter the company noted that it must "secure additional equity or debt financing immediately and effect a significant cost reduction plan in the near future".

Linux player Red Hat lifted revenue 95 per cent from $US8.2 million to $US16.0 million in its first quarter to May 31. The company's loss was trimmed from $US3.8 million a year ago to $US2.5 million before accounting for merger, acquisition and other expenses, After accounting for the one-off charges Red Hat lost $US14.9 million.

Chip manufacturer Micron Technology made a net profit of $US275 million on net sales of $US1.8 billion in its third quarter to June 1. A year earlier the company lost $US28 million on sales of $US864 million.

Intel will take a charge of about $US200 million in its second quarter to cover the costs of a program to replace faulty motherboards. In its first quarter the company had made provision to outlay $US53 million on the problem.

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