ROW Short Takes

TIW sells Czech and Romanian cellular companies to VodafoneTelesystem International Wireless Inc. (TIW) has inked an agreement to sell its Romanian and Czech Republic wireless operators to Vodafone Group plc for approximately US$3.5 billion plus an estimated US$950 million in debt. The deal is worth US$16 per share, representing a 21.3% premium over TIW’s three-month average share price and a premium of 43% over the company’s share price as of Dec. 31, 2004. Certain shareholders representing more than 33% interest in the company have agreed to support and vote their shares in favour of the transaction. These parties include affiliates of J.P. Morgan Partners, Capital d’Amerique CDPQ Inc., and certain affiliates of AIG Emerging Europe Infrastructure Fund L.P. They have also agreed to not solicit any competing transactions. TIW’s board of directors has approved the sale and has recommended shareholders vote in favour of the transaction. The sale of the company marks the end of an up and down journey for the Montreal company. TIW was once the owner of a number of European, Asian and South American wireless operators, but due to financial difficulties had to exit those businesses. Back in the third-generation wireless spectrum gold rush, an affiliate of TIW paid approximately US$7 billion for a 3G licence in the United Kingdom. After a near brush with bankruptcy, the company’s Romanian and Czech Republic operators began to take solid hold in their respective markets. Mobifone SA, the dominant provider in Romania with a 48% share of the entire market, had at the end of fiscal year 2004 more than 4.9 million subscribers. The company added more than 540,000 net subscribers in the fourth quarter of 2004. Year-over-year, Mobifone experienced a 42% increase in its subscriber base. Oskar Mobil held approximately 17% share of the Czech Republic market with an estimated 1.8 million subscribers. The company was recently awarded a 3G licence for the country. When a possible agreement between the two companies came to light about a week before the announcement on March 15, analysts said the market has changed significantly in the past number of years and it was now a question of consolidating or be consolidated. U.S. Wireless FiguresThe number of wireless subscribers grew by more than 13% in the second half of 2004, the CTIA – The Wireless Association reported this month. Wireless subscribers have now surpassed the 180-million mark, a penetration of more than 60%. Last year, minutes of use jumped by a third compared to levels recorded a year earlier. Sierra Wireless AirCard to be offered through SprintSierra Wireless Inc.’s Ev-DO AirCard 580 will be available for sale through Sprint business sales channels later this year. The AirCard 580 will offer broadband speeds and be backwards compatible to lxRTT networks in areas where Ev-DO coverage is not available. In other Sierra Wireless news, the company and Leaf Wireless Ltd. inked an agreement to distribute the AirCard 775 and the AirCard 750 through Leaf Wireless in South Africa. "AirCard wireless network cards allow mobile professionals worldwide to reliably connect to the information they need to work effectively from wherever they may be," said Derek Evans, Sierra Wireless VP and managing director for Europe, Middle East, and Africa.Bell Mobility to use Sproqit Technologies wireless deviceBell Mobility will use Sproqit Technologies’ Sproqit Personal Edition to deliver remote access from a PDA to all desktop applications, including push-email. Mobile professionals and small/medium businesses can remotely access, attach, read and send any file on their desktop or corporate network from their handheld device. Bell Canada VP, hardware management business marketing and operations support, Ron Cihocki said Sproqit Personal Edition customers will "benefit from our 1X digital network by providing wireless access from their handheld device to data rich applications available on their PC." Sproqit Technologies CEO Peter Mansour said Treo 600 users can "wirelessly access their desktop, including email, calendar contacts, while leaving their laptops at home." Lyrtech inks deal with do networks, secures project fundingLyrtech Inc. signed a $387,000 contract with do networks to develop a O-VLAN product demonstrator. Innovatech Québec has partnered with do networks and will provide $212,500 in funding for the project. Francis Fortier, investment manager at Innovatech Québec said, "The combination of the two companies’ strong technical expertise should ensure the success of the project." Lyrtech president and CEO Miguel Caron said, "This partnership will allow Lyrtech to market an entirely new FPGA board that will not only increase our product portfolio, but also open the way to an entirely new market." Aliant Mobility improves coverage in AtlanticAliant Mobility is expanding its digital wireless coverage in New Brunswick. The company has now sunk $84 million into NB alone, and over $290 million across Atlantic Canada over the past five years. With the completion of the network expansion, Aliant will cover 88 per cent of the province’s population. Robert Vautour, Aliant Northern New Brunswick regional manager, said customers could get "wireless coverage as a result of the three new cell sites in the corridor of route 17 between St. Leonard and Campbellton." Customers will be provided network expansion capabilities with web browsing, text, video and picture messaging, as well be able to download screensavers and ringtones. In other Aliant news, the company has expanded its wireless coverage to Newfoundland and Labrador, where the company has already invested over $60 million, $20 million in the past year. Seventy-five per cent of NL will have Aliant wireless coverage with the development in Northern and Burin Peninsulas. Hilton’s photos urge BlackBerry security improvementsThe Canadian military and U.S. security agencies have joined forces to make BlackBerry portable communications devices more secure during a year-long trial. The security of BlackBerry came under scrutiny last month when hackers accessed embarrassing topless photos in Paris Hilton’s private files from her Sidekick II, which is a similar device. Canadian defence project director Matthew Kellet said, "In a crisis situation, you really don’t want to have the movements of your emergency people known." The outcome could ultimately be that the product becomes commercially available. Fido brings hiptop2 to CanadaFido’s hiptop2 from Danger Inc. is now available on the Canadian market. Hiptop2 provides quicker access to ringtones and game downloads. Users can choose a TV theme, clip from their favourite hit song taken, selection of famous quotes, and animal sounds. Fido’s VP marketing René Bousquet said that with much "media coverage the U.S. version Sidekick II has received and the buzz it’s generated with celebrities and athletes in the U.S., our customers have been eagerly awaiting the Canadian launch of the device." Brickhouse Mobile to distribute TEN worldwideBrickhouse Mobile has a five-year agreement with New Frontier Media Inc. to develop, distribute and sell TEN mobile phone content worldwide. Consumers will be offered the choice of a monthly subscription or purchasing celebrity voice tones, sexy wallpapers, adult videos, and games, via web sites, WAP sites, JAVA applications, and BREW applications in U.S. and international markets. Males 18-35 are the initial target audience. Brickhouse Mobile president L.R. Clinton Fayling said that with "combined distribution channels" New Frontier will be able to "further profit from existing customers via brand-centric mobile products, promotions, and cross marketing." Navision releases RADIO BEACON/ Navision version 4.0RADIO BEACON/ Navision version 4.0 interface by Radio Beacon Inc. is now available on the market. The product interface enables customers using Microsoft Business Solutions-Navision to integrate RADIO BEACON WMS into their ERP systems for users of Microsoft Navision, Great Plains, Axapa and Solomon Enterprise Resource planning suites. The integrated interface brings Navision’s ERP functionality onto the warehouse floor, and uses radio-frequency (RF) technology to streamline receiving, picking, packing and shipping. With real-time validation at every step, companies can lower costs, realize increased inventory accuracy, and provide better service to customers. Radio Beacon president Dale Jeffries said, "RADIO BEACON’s integration provides an advanced warehouse management solution that also protects one’s investment in Navision." Psion Teklogix releases new RFID reader to NAPsion Teklogix released to the North American market its EPC-compliant 900 MHz RFID reader designed to operate with Psion Teklogix’ 7535 hand-held computer. It is expected to be available for sale in April 2005. The new Psion Teklogix Integrated UHF RFID Reader provides customers with a RFID option that compatible with EPC Class 0, 0+, and 1 standards, as well as ISO 18000-6B protocols. The Integrated UHF RFID Reader represents a key element in expanding Psion Teklogix’ portfolio, said Psion Teklogix senior product marketing manager Todd Boone. Tira Wireless introduces new product for developersTira Developer Network by Tira Wireless will be available the end of March. The product is an online community resource designed to help developers create portable mobile Java games and applications, and provides access to Tira’s mobile device database and use of its automated verification server (AVS) for debugging content. David Adams, president of Texas-based Klear Games said Tira Developer Network is "an invaluable source of tools and information for developers that want to get their mobile content accepted by leading publishers and into global distribution." WebTech increases sales and net incomeWebTech Wireless reported results for the second quarter ended Jan. 31, 2005 of $2.79 million in total revenue, an increase of 59% from $1.75 million in the second quarter of fiscal 2004 and an increase of 108% from the first quarter of this fiscal year. Company president and CEO Anwar Sukkarie, attributes 38% of revenue growth in the last six months to sales in Europe, while 36% is attributable to sales outside of Europe and North America, "a particularly notable period of achievement." WebTech continues to expand services and support, with the addition of six new sales centers across North America, as well as increased head office space. WebTech’s presence in Europe also increased, resulting in additional offices in Milan and the UK. SAMSys. and Bradshaw make new RFID for Wal-MartSAMSys Technologies Inc. is working with kitchenware supplier Bradshaw International to develop an enhanced warehouse location tracking system designed to comply with Wal-Mart’s RFID mandate. SAMSys’ MP9320 UHF long range reader is being used to perform verification functions ensuring the readability of RFID tags applied to Bradshaw pallets and cased for Wal-Mart’s pilot RFID distribution centres in Texas. The SAMSys hardware was selected because of an open architecture that provides a wide choice of tags as well as the ability to change tag protocols now or in the future without the need to change readers. This approach to meeting RFID requirements is enabling Bradshaw to eliminate the cost of a standalone "slap and ship" or middleware solution. Alberta’s wireless industry to grow despite downsizingA KPMG and WiTec Alberta report suggests 43% of Alberta’s wireless and telecom companies agree that challenges surrounding venture capital firms is the single greatest financial barrier they face. Only 2% of the Alberta wireless and telecom sector said they intend to downsize, while 84% of companies surveyed indicated they intend to increase their workforce over the next two years. The survey also revealed that 70% of respondents indicated they use their company’s own cash flow to finance their day to day business operations, while an additional 42%indicated they will continue to use their company’s cash flow over the next five years. A further 67% also indicated that they had a positive cash flow in their respective organizations. The Ipsos Reid.on-line survey, which polled senior executives from Alberta’s wireless and telecom sector in November and December 2004, also found that 97% of executives intend to either further invest or maintain their current levels of research and development spending. An additional 66% are looking to new products or technology to propel their business and 36% of respondents are looking to new markets for growth. "Clearly, the survey results demonstrate a high degree of optimism in the wireless and telecom industry here in Alberta," said Mike Pratt, executive director, WiTec Alberta. "It is no surprise that, much like the province itself, this industry is young, growing and becoming increasingly profitable." R&D declining in Canada: Impact GroupA new report from the Impact Group in Toronto suggests that research in development in Canada is eroding. The Deomgraphics of Industrial Research in Canada 1994-2000 shows that over this seven year period industrial R&D performance is in decline. While the amount of money devoted to R&D activities has nearly doubled over this seven-year period, the total number of companies doing research remained essentially the same. The raw number of companies conducting R&D has increased slightly from 11,132 in 1994 to 11,437 in 2000. "During a period of unprecedented economic growth, nine out of 10 provinces show a decline in the number of industrial R&D performers," reads a March 17 news release.

ROW Short Takes

News | March 23, 2005

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