From: TheStandardEurope.com[mailto:[log in to unmask]
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Sent: Wednesday, May 02, 2001 10:06 PM
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Subject: INTELLIGENCER EUROPE: Vodafone plans to buy BT stakes
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THE INDUSTRY STANDARD EUROPE'S
I N T E L L I G E N C E R E U R O P E
This Week in the European Internet Economy
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Wednesday, 2 May 2001
TOP STORY:
* Vodafone plans to buy BT stakes
WORTH REPEATING:
* Pirates in the Ukraine
THE WEEK:
* News highlights
BY THE NUMBERS:
* European e-commerce growing steadily
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TOP STORY
~~~~~~~~~
Vodafone plans to buy BT stakes
By Michele M Yamada and Rick Wray
Vodafone is set to raise £3 billion (4.8 billion euros) through the
issue of new shares to help fund its £4.8 billion (7.7 billion euros)
acquisition of British Telecom's assets in Spain and Japan. The deal
will help BT reduce its £30 billion (48 billion euros) debt burden but
could jeopardise the teleco's own plans for an emergency cash call.
Vodafone is paying £3.7 billion (6 billion euros) for British
Telecom's stakes in Japan Telecom, the country's third largest
operator, and its J-Phone mobile operation, which competes with NTT
DoCoMo and DDI's Au Group. It is also picking up BT's 5 per cent
stakes in J-Phone's three regional operating companies, which were
bought by BT last month for $555 million (622 million euros).
Vodafone, the world's largest mobile operator, will now control just
under 50 per cent of both Japan Telecom and J-Phone.
It is also buying BT's 18 per cent stake in Spanish wireless operator
Airtel for £1.1 billion (1.8 billion euros). After the deal, Vodafone
will own 91.6 per cent of the Spanish business, which has more than 7
million customers.
The two deals cement Vodafone's leading position in the global
wireless industry but signal the end of BT's ambitions to be a truly
global wireless player. The sales are also an embarrassing volte-face
for BT's chief executive Sir Peter Bonfield. Just over a month ago he
said he was committed to Japan. But BT's crippling £30 billion debt
has injected a sense of reality into the business. The news also comes
less than a week after the announcement that BT's chairman Sir Iain
Vallance will resign a year earlier than expected.
The company will be able to reduce its debts by £4.4 billion (7.1
billion euros) under the two deals, but that is still some way off the
target of a reduction of £10 billion (16 billion euros) by the end of
the year. BT is also in talks to sell its Yell.com
business-directories operation to a consortia of private equity
investors but analysts expect the company will still need a cash
injection from the markets.
However, Vodafone's £3 billion share sale has raised concerns that
investors will be less willing to buy BT stock if the company
announces its own emergency cash call.
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WORTH REPEATING
~~~~~~~~~~~~~~~
"For 70 years, there was no respect for intellectual property. People
don't understand what it is. It's like trying to sell air."
Andrey Dakhovskyy, owner of Ukrainian Records, explaining why his
country has become one of the world's top sources of pirated CDs.
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THE WEEK
~~~~~~~~
BROADBAND TIE-UP: AOL Time Warner and NTL, the largest cable operator
in the UK, are in talks to create a European broadband partnership
which would bring the US-based media giant access to over 20 million
homes while enriching NTL's content offering. However, any deal is
likely to require the involvement of NTL shareholder France Telecom
before it can progress, which raises the possibility of the creation
of a European new-media powerhouse. "It's the marriage of content and
distribution again," said one source.
http://www.thestandardeurope.com/article/display/0,1151,16410,00.html
NO-MONEY CHANNEL: Shares in the London-based interactive business TV
station The Money Channel have been suspended after the company
admitted revenues were insufficient to cover its working capital
requirements. Senior management are attempting to put together a
rescue package for the business, which employs 130 people. Founded by
former pop star Adam Faith, it had £2.6 million (4.2 million euros) in
the bank at the last count in February and has been exploring
potential strategic alliances for several months.
http://www.thestandardeurope.com/article/display/0,1151,16421,00.html
PIRATES' SALE ON: Ukraine has outstripped China, Paraguay and Russia
to become the most troublesome source of pirated intellectual property
in the world, according to a recent US government report. Last year,
Ukrainian manufacturing plants exported an estimated 40 million
pirated CDs - all part of an industry which costs the American
software, film and music industries $20 billion in lost revenues each
year. Ukraine is now being threatened with blanket trade sanctions.
http://www.thestandardeurope.com/article/display/0,1151,16402,00.html
PATENT TRAP: Programmers have told a Frankfurt conference that they
fear innovation could suffer as software patents become more
widespread. The debate in the EU is centred on a long-awaited European
Commission directive on software patents, originally due a year ago.
The patent system was described at the conference as a threat to
software developers, who could be mired in lawsuits.
http://www.thestandardeurope.com/article/display/0,1151,16370,00.html
FUTURE SHOCK: The new-economy magazine Business 2.0 is closing its
European operations in Germany, Italy and the UK. Owner Future
Networks remains in talks with a US-based buyer for the magazine,
believed to be AOL Time Warner. The firm is also shutting down its
loss-making German business, Future Verlag. The closures will result
in the loss of 80 jobs.
http://www.thestandardeurope.com/article/display/0,1151,16394,00.html
PORN AGAIN: Hit by the advertising downturn, French online television
company CanalWeb is turning to paid-for services. And it has placed
its bets on the only kind of content sure to make people get their
credit cards out: porn. In June, the start-up will launch a
pornography and sex-related channel called MySexyTV.com, from with
users will be able to purchase downloadable videos. But turning a
once-free site into a paid-for one will be tough for the start-up,
which was regarded as one France's most promising a year ago.
http://www.thestandardeurope.com/article/display/0,1151,16403,00.html
MERGER HALTED: Bertelsmann and EMI have abandoned plans to merge their
recording businesses after it was determined that regulatory hurdles
in Washington and Brussels would be too high. It's a serious blow for
Bertelsmann, whose chairman and CEO Thomas Middelhoff pledged to
create the world's largest record label by the end of 2000.
Bertelsmann has also been stung by the ongoing atrophy of Napster, in
which it invested $60 million (68 million euros) in November.
http://www.thestandardeurope.com/article/display/0,1151,16419,00.html
MAISON NET: Cisco, France Telecom and housing giant Kaufman&Broad have
teamed up to create the first commercially available "Web house", the
Ma [log in to unmask] Local area networks will integrate wireless local loop
technology and automation software, allowing owners to control
domestic appliances and home entertainment from Net-enabled devices.
The concept will be made available for the majority of Kaufman&Broad's
new homes throughout France.
http://www.thestandardeurope.com/article/display/0,1151,16395,00.html
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BY THE NUMBERS
~~~~~~~~~~~~~~
Despite the much-publicised dotcom shakeout and economic slowdown,
Internet commerce continues to grow steadily and is expected to
surpass the $1 trillion mark by 2004, according to a recent report by
IDC. Meanwhile, 117 million Europeans - around 30 per cent of the
population - were using the Internet by the end of last year.
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STAFF
~~~~~
Written by James Price, Rick Wray and Rob Jeacock. Send news tips and
press releases to [log in to unmask]
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