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Headlines in this issue:

1. Deutsche Telekom to acquire Orange Netherlands... maybe
2. Tele2 partners with Nokia Siemens Networks to enhance European fibre-optic backbone
3. Ericsson acquires service delivery platforms provider Drutt Corporation
4. Telecom New Zealand selects Alcatel-Lucent as technology partner for W-CDMA upgrade
5. Ericsson to deliver 3G/HSPA network to Personal in Argentina
6. Telefónica del Perú and Alcatel-Lucent announce partnership
7. France Telecom announces acquisition of Ya.com in Spain
8. IXI Mobile and ITAC complete merger
9. Alcatel-Lucent to supply equipment for Nextgen broadband network in Australia
10. Nokia Siemens Networks to expand BSNL network in India
11. QUALCOMM and Sagem sign WCDMA subscriber unit license agreement
12. Nortel expands Baikalwestcom's GSM/GPRS/EDGE network in eastern Siberia
13. Huawei and Algeria Telecom launch CDMA 2000 1xEV-DO network
14. Avaya enters merger agreement with Silver Lake and TPG Capital
15. Ericsson announces cash offer to acquire LHS
16. COMSTAR UTS acquires 25% stake in Comstar-Ukraine
17. KPN selects Alcatel-Lucent as lead network integrator for IP Centrex/VoIP services for business markets
18. Ericsson chosen by KPN to manage access networks in the Netherlands

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8th June 2007

Deutsche Telekom to acquire Orange Netherlands... maybe

Europe's press are reporting that Deutsche Telekom is negotiating to acquire Orange Netherlands from France Telecom-owned Orange SA for approximately €1,300 million (US$1,760 million). Although none of the companies involved has yet issued a formal statement regarding the status of the negotiations, France Telecom has admitted that Orange Netherlands has asked its workers council to assess the possibility that the company will be sold in the near future. Due to regulatory and employment laws, Orange Netherlands cannot formally comment on the news until it has sought the opinion of workers' councils.

At present, Orange Netherlands is the smallest of the country's four cellular/3G operators, with 2.047 million subscribers at the end of 2006. It competes with the enlarged KPN Mobile Netherlands (which acquired Telfort in 2006), with Vodafone Netherlands, and with Deutsche Telekom-controlled T-Mobile Netherlands BV. Combining the Dutch operations of T-Mobile and Orange would put the amalgamated entity on at least a par with the country's second-largest operator, Vodafone, as it would have had 4.599 million subscribers at the end of 2006 and a market share of around 25%. However, KPN Mobile Netherlands will remain the largest player by a considerable margin, with a market share of just under 50%.

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8th June 2007

Tele2 partners with Nokia Siemens Networks to enhance European fibre-optic backbone

Nokia Siemens Networks has agreed to work with Tele2 AB to build a new pan-European dense wavelength division multiplexing (DWDM) network that can support 40Gbit/s and wavelength on every link. The new network will bolster Tele2’s IP backbone network, and link major European telecommunications nodes. The new core transport network will enable Tele2 to cost-efficiently offer its customers new IP services and enhance its transmission capacity.

The Tele2 project relies on the SURPASS hiT 7300, an optical platform that allows the realisation of metropolitan to ultra-long haul transport applications on a flexible DWDM network architecture. The main advantages of this new technology for Tele2 are increased service quality and flexibility, as well as reduced costs. The automation features of the platform enable hands-off provisioning of new services, resulting in Tele2 being able to adjust its bandwidth as needed. The SURPASS hiT 7300 platform integrates technology from Stratalight Communications into its platform technology to support the 40Gbit/s transmission rates per wavelength.

Tele2’s new optical backbone will cover central Europe. The deployment started in the second quarter of 2007.

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8th June 2007

Ericsson acquires service delivery platforms provider Drutt Corporation

Ericsson AB has signed an agreement to acquire 100% of the shares of Drutt Corporation, a provider of service delivery platform (SDP) solutions. This deal represents yet another step in Ericsson's ambition to become the leader in multimedia.
 
Jan Wäreby, Senior Vice President Multimedia, Ericsson, said: "Being such an innovative and focused company, with close to 70 percent of its workforce dedicated to R&D and service delivery, Drutt adds an important piece to the Ericsson SDP strategy."
 
"Ericsson is already the leader in the fast growing SDP market. By acquiring Drutt, we will be even better positioned to support our customers to offer a better consumer experience by adapting content for the individual, and making it attractive to use," he added. "Our combination will provide operators with integration-ready platforms, thus reducing system integration complexity."
 
Drutt's flagship solution - Mobile Service Delivery Platform (MSDP) offers an end-to-end multi-channel solution for establishing a profitable mobile service delivery business helping operators mobilise and charge for any content to any kind of mobile device, over any mobile network and delivery channel.
 
Currently, Drutt's MSDP is commercially deployed in more than 60 telecommunications operators in 35 countries.
 
Drutt Corporation has subsidiaries in Sweden, China, Canada and Mexico and is owned by Provider Venture Partners Funds, TeliaSonera AB and certain employees. The company employs about 85 people and more than 90% of the employees reside in Sweden, where the global operations are located.
 
The transaction is conditioned upon approval by the relevant competition authorities and upon board approval by TeliaSonera. The transaction will be closed through a direct purchase of 100% of Drutt's shares.

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8th June 2007

Telecom New Zealand selects Alcatel-Lucent as technology partner for W-CDMA upgrade

Alcatel-Lucent has been selected by Telecom Corporation of New Zealand (TCNZ, or Telecom) as its technology partner for the deployment of a new 3G Wideband-CDMA (W-CDMA)/High Speed Packet Access (HSPA) network deployment.

Subject to a suitable commercial arrangement being reached, Alcatel-Lucent will work with Telecom as part of a €168 million (approximately NZ$300 million) mobile network investment plan that will position Telecom to meet New Zealand's future mobile needs.

Telecom's plans include the development of a new W-CDMA/HSPA network that will complement existing CDMA network capabilities and allow Telecom to provide unparalleled mobile services.

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7th June 2007

Ericsson to deliver 3G/HSPA network to Personal in Argentina

Ericsson AB is building an HSPA-enabled 3G network for Argentinean operator, Telecom Personal, a subsidiary of Telecom Argentina. Ericsson will also expand and modernise Personal's existing network with its Mobile Softswitch solution.
 
Under the agreement, Ericsson will provide new 3G/HSPA core and radio networks, including the Mobile Softswitch. Ericsson will also be the prime-integrator for the network and will provide business consulting services.
 
Ericsson's HSPA technology solution will enable Personal to break through with a new generation of mobile broadband services, delivering true broadband speed. Personal subscribers will also enjoy a richer communication experience.
 
Ericsson's Mobile Softswitch solution will help Personal to minimise its operating expenses through evolution towards an all-IP core network.

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7th June 2007

Telefónica del Perú and Alcatel-Lucent announce partnership

Ericsson AB is building an HSPA-enabled 3G network for Argentinean operator, Telecom Personal, a subsidiary of Telecom Argentina. Ericsson will also expand and modernise Personal's existing network with its Mobile Softswitch solution.
 
Under the agreement, Ericsson will provide new 3G/HSPA core and radio networks, including the Mobile Softswitch. Ericsson will also be the prime-integrator for the network and will provide business consulting services.
 
Ericsson's HSPA technology solution will enable Personal to break through with a new generation of mobile broadband services, delivering true broadband speed. Personal subscribers will also enjoy a richer communication experience.
 
Ericsson's Mobile Softswitch solution will help Personal to minimise its operating expenses through evolution towards an all-IP core network.

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7th June 2007

France Telecom announces acquisition of Ya.com in Spain

France Telecom SA has announced the acquisition of a 100% stake in the Spanish company, Ya.com, for an enterprise value of €320 million, consolidating Orange SA’s position as number two on the Spanish ADSL market with more than one million subscribers, offering Spanish consumers a genuine alternative to the historical operator.

This acquisition represents a further step forwards with the deployment of the strategy to make the Group one of the world's leading integrated operators. On the Spanish broadband market, which is growing rapidly and offers major potential for development, Orange now has a critical mass with an 18% share of the ADSL market. This operation will also make it possible to optimise network infrastructure investments, as well as the deployment of fully unbundled services before the year is out. In this way, new clients will be able to access the mobile and Internet content and services developed by Orange.

Completion of the transaction is subject to approval by the competition authorities, which should be received in the coming weeks.

Ya.com, created in 1999, is now the third biggest ADSL player in Spain, with more than 400,000 subscribers. In addition to Internet access, Ya.com offers a range of services on the Spanish market (ADSL TV, VoD and unlimited telephony).

Spain represents one of the Group's strategic markets. All of the activities offered to clients as an integrated operator in Spain – fixed, mobile, Internet, ADSL TV – have been grouped together under the Orange brand since October 2006. At March 31, 2007, the Group had around 12 million clients in Spain, including 11 million for mobile.

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7th June 2007

IXI Mobile and ITAC complete merger

IXI Mobile Inc has announced the closing of the merger between Israel Technology Acquisition Corporation (ITAC), a specified purpose acquisition corporation, and IXI Mobile, the maker of the Ogo family of devices and services.

Under the terms of the agreement, ITAC acquired all outstanding shares of IXI Mobile, and has changed its name to IXI Mobile Inc. The newly formed company will operate through its subsidiary, IXI Mobile (USA). ITAC will continue trading on the Over-The-Counter Bulletin Board, and has applied for a listing on the Nasdaq Stock market.

Headquartered in Redwood City, California, IXI Mobile Inc offers solutions that bring data-centric mobile devices and services to the mass market.

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6th June 2007

Alcatel-Lucent to supply equipment for Nextgen broadband network in Australia

Alcatel-Lucent has signed contracts with a value of approximately €25 million with Nextgen Networks Pty Ltd, a provider of data services in Australia, to supply WDM, SDH and Ethernet/MPLS equipment and provide Network Operation Centre (NOC) services for its optical network. Nextgen Networks will be able to offer optical access to new areas and to offer new services to Australian businesses, all with improved efficiency and cost-effectiveness. To support Nextgen Networks’ plans, Alcatel-Lucent will deploy its optical networking solution, including a suite of network operations services.

Alcatel-Lucent will also provide network management for the optical domain from its Global Network Operations Centre (GNOC) in Sydney, providing round-the-clock support and service provisioning for best-in-class network operations.

Nextgen Networks owns and operates Australia’s third-longest optical fibre network, which spans some 8,500 km linking major and regional cities, as well as a national data network. With Alcatel-Lucent’s optical solution, Nextgen Network will offer its customers the benefits of Ethernet-based applications for voice, video and data services. All these services will leverage the optical and Ethernet/MPLS-based infrastructures previously deployed by Alcatel-Lucent, thus minimising total cost of network ownership.

“This upgrade and extension project provides a strong foundation for our growth in the Australian market as next-generation multimedia service delivery is creating a demand for greater and greater capacity on our transport network,” stated Peter Harrison, General Manager of Nextgen Networks. “The Alcatel-Lucent solution will further enhance the flexibility and reliability to efficiently address this demand, while speeding return on investment.”

Alcatel-Lucent’s optical solution will be based on SDH and WDM technologies. Alcatel-Lucent will supply its Metropolis AMS, AMU and ADM MultiService Mux-Universal SDH multiplexers, and its LambdaUnite optical multi-service switch, enabling traffic switching from 10Gbit/s to 2Mbit/s. To transport the traffic over long-distance, Alcatel-Lucent will continue to deploy its WaveStar OLS 800G and Metropolis Wavelength Services Manager (WSM) WDM systems.

These new contracts follow the launch by Nextgen Networks, in June 2006, of Australia’s first national Ethernet VPLS (Virtual Private LAN Service) network based on the Alcatel-Lucent 7750 Service Router. This VPLS network offers Australian businesses the benefits of advanced VPN technology, enabling them to operate quality-controlled voice, video and data services.

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6th June 2007

Nokia Siemens Networks to expand BSNL network in India

Nokia Siemens Networks has won a contract to modernise the network of Bharat Sanchar Nigam Ltd (BSNL), India’s largest carrier. The new access network’s high bandwidth will ensure that BSNL’s customers can use data-intensive applications with the highest quality and without long waiting times. In a first step, BSNL will supply 283 cities in 17 Indian states with 800,000 new high-speed connections based on Carrier Ethernet technology from Nokia Siemens Networks. BSNL will roll out six million connections with the option of an additional three million in the next three years.

BSNL has concluded a turnkey agreement with Nokia Siemens Networks to modernise its access network in 17 Indian states. By the end of July 2007, Nokia Siemens Networks will integrate Gigabit Ethernet-capable IP DSLAMs in the carrier’s network and also supply the end-user devices required for subscribers.

Nokia Siemens Networks’ technical solution enables VDSL and ADSL2+ cards to be provided in a single chassis, enabling BSNL to respond flexibly and on demand. In addition, the high-density multi-service access solution supports up to 1,152 ports in a single chassis, thus providing cost savings for space and power.

BSNL will provide a total of six million new DSL connections (ADSL2+ and VDSL) with the possibility of three million more over the next three years and use them to offer its customers multimedia services such as high-speed Internet, IPTV, games and VoD.

The agreement will run for a term of three years and comprises installation and commissioning. Training for BSNL’s technicians and annual maintenance will be supported for five years.

BSNL, a Government of India-owned corporation, is the incumbent and largest telecommunications services provider in India with a pan-India footprint but for Delhi and Mumbai. It has a network of over 60 million subscribers covering 5,000 towns with over 35 million telephone connections. The corporation is an integrated telecommunications service provider with presence in the fixed-line, cellular mobile, long-distance and data segments with over 35 million fixed-line, 24 million cellular mobile and 3.9 million Internet subscribers, including 0.9 million broadband customers.

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6th June 2007

QUALCOMM and Sagem sign WCDMA subscriber unit license agreement

QUALCOMM Inc has entered into a WCDMA subscriber unit license agreement with Sagem. Under the terms of a royalty-bearing agreement, QUALCOMM has granted Sagem Communication a worldwide license under its patent portfolio to develop, manufacture and sell 3G WCDMA subscriber units at QUALCOMM's standard worldwide royalty rates.

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5th June 2007

Nortel expands Baikalwestcom's GSM/GPRS/EDGE network in eastern Siberia

Nortel Networks Corp has been contracted by Russian cellular operator Baikalwestcom to increase the network capacity and expand mobile services coverage to new areas of Siberia. According to Nortel, this expansion contract marks another milestone in a continuing three-year cooperation between Nortel and Baikalwestcom. The value of the contract has not been disclosed.

Under the terms of the new contract for GSM wireless equipment, Baikalwestcom will increase its core network capacity to better support subscribers in the densely-populated metropolitan areas of Irkutsk, Bratsk, and Angarsk and extend and improve its wireless network to deliver services across a wider area of eastern Siberia. Baikalwestcom also intends to extend GPRS data services such as the delivery of Internet access into more rural areas across the Irkutsk region.

The Baikalwestcom coverage area will also be expanded to provide updated communication services in the large East Siberian region with more than 50 rural towns and villages and the company also intends to deliver uninterrupted coverage along all the major highways within the Irkutsk region.

During 2006, Nortel and Baikalwestcom worked together to put into commercial operation the first stage of the Baikalwestcom network extension project, which consisted of a core systems upgrade and the deployment of more than 400 Nortel base stations and GPRS-subsystems, as well as launch of EDGE technology within the Baikalwestcom coverage area. This enabled Baikalwestcom to increase the volume of its commercial services, including SMS and mobile Internet services such as music and video downloads and multimedia services.

Baikalwestcom is deploying over 350 Nortel GSM base stations (BTS18000) across Siberia. The company will also use Nortel software upgrades to increase the capacity of its existing three DMS switches, located in Irkutsk, Bratsk, and Angarsk.

Baikalwestcom is the leading mobile service provider for the East Siberia, Irkutsk region of Russia. The company provides its subscribers with CDMA 2000 1x and GSM 900/1800 mobile communications services. Baikalwestcom is wholly owned by the largest telecommunications provider in Siberia, Sibirtelecom. Baikalwestcom provides its services to more than 1.5 million subscribers, which represents 57% of the total mobile services in the region.

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5th June 2007

Huawei and Algeria Telecom launch CDMA 2000 1xEV-DO network

Huawei Technologies and Algerie Telecom SPA, the largest provider of network services in Algeria, recently announced the official launch of a CDMA 2000 1xEV-DO network in Alger, the capital of Algeria.

As part of its modernisation plans, Algeria Telecom is focusing on the development of its broadband access network. With Huawei's LiteFME solution, Algeria Telecom's PSTN, CDMA WLL network and ADSL network can be converged. The CDMA network upgrade from 1X to EV-DO will provide low-cost, wireless broadband access solution to Algeria Telecom's subscribers.

As the partner of choice for Algeria Telecom, Huawei is also working on a trial project of EV-DO Rev.A technology.

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5th June 2007

Avaya enters merger agreement with Silver Lake and TPG Capital

Avaya Inc has entered into a definitive merger agreement with Silver Lake, an investment firm focused on large-scale investments in technology-driven growth industries, and TPG Capital, a private investment partnership, for approximately US$8.2 billion or US$17.50 per common share.

Under the terms of the agreement, Avaya shareholders will receive US$17.50 in cash for each share of Avaya common stock they hold, representing a premium of approximately 28% over Avaya's closing share price of US$13.67 on May 25, 2007, the last trading day prior to published reports regarding a potential transaction, and a premium of approximately 33% over Avaya's average closing share price of US$13.17 during the 30 trading days ending May 25, 2007.

"After an extensive review of Avaya's strategic alternatives with Avaya management and our financial advisors, the board of directors of Avaya determined that this transaction with Silver Lake and TPG provides the best value for Avaya's shareholders," said Phil Odeen, non-executive chairman of Avaya's board of directors.

Avaya's board of directors has approved the merger agreement and resolved to recommend that Avaya shareholders adopt the agreement.

The transaction is expected to be completed in the autumn of 2007, subject to receipt of shareholder approval and customary regulatory approvals, as well as satisfaction of other customary closing conditions. There is no financing condition to the obligations of the private equity group to consummate the transaction, and equity and debt commitments for the merger consideration have been received.

The merger agreement provides for Avaya to solicit proposals from third parties during the next 50 days. In addition, the company may, at any time, subject to the terms of the agreement, respond to unsolicited proposals. There can be no assurance that this process will result in an alternative transaction. Avaya does not intend to disclose developments with respect to the solicitation process unless and until its board of directors has made a decision.

In connection with the proposed merger, Avaya will file a proxy statement with the US Securities and Exchange Commission (SEC).

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5th June 2007

Ericsson announces cash offer to acquire LHS

Ericsson AB, through a wholly-owned subsidiary, has announced a voluntary public cash offer to acquire LHS for €22.5 in cash per share, valuing the company at approximately €310 million. The cash offer represents a premium of 33% to the LHS one month average share price until June 4, 2007 of €16.9. With the acquisition, Ericsson strengthens its offering in revenue management with a fully integrated convergent charging and billing solution and expands its customer base.

Carl-Henric Svanberg, President and CEO of Ericsson, said: "Operators are quickly moving towards convergent charging and billing solutions to enhance their relationship with consumers, improve cost efficiency and limit financial risk. Ericsson and LHS form a strong constellation of prepaid and postpaid solutions ready to immediately capture this opportunity. Ericsson's leadership in real-time charging and mediation, together with the leading billing and customer care solutions of LHS, make the two companies a leading player in revenue management and strengthen our overall multimedia offering."
 
LHS is a leading billing and customer care software and services company. The company has more than 120 installations, complementing the strong Ericsson base of more than 150 customers in prepaid/real-time charging, and about 300 customers in mediation. The acquisition offers significant potential for revenue synergies from cross-selling and greenfield opportunities.
 
LHS was established as an Independent Software Vendor (ISV) in 2004. The company employs about 550 people and has its headquarters in Frankfurt, with regional offices in seven countries. LHS sales in 2006 amounted to €71.6 million (54% increase YoY) and the adjusted EBITDA margin was 17%.
 
The transaction is expected to be accretive from 2008 onwards, excluding possible depreciation of acquired intangibles.
 
The acquisition will be conducted by means of a public voluntary cash offer to the LHS shareholders, valuing the share capital at €316 million (excluding treasury shares). Enterprise value for LHS is €310 million after adjusting for options of €16.1 million and the net cash position of €22.2 million.
 
The cash offer is subject to the satisfaction of all necessary approvals and clearances from competition authorities have been obtained.
 
An offer document regarding the cash offer will be published upon approval of the German Federal Financial Supervisory Authority (BaFin). The publication, at which time also the offer period begins, is expected to occur in one month's time. Completion of the cash offer is expected in the third quarter of 2007.
 
Ericsson has, through its wholly-owned subsidiary, signed an agreement to acquire 8.0 million shares representing 55.1% of all shares in LHS from its main owners, LHS Beteiligungs AG, the investment vehicle controlled by Mr Hartmut Lademacher (founder and Chairman of the Supervisory Board) and funds advised by General Atlantic. In addition, Ericsson, through its wholly-owned subsidiary, has also entered into irrevocable undertakings to secure 20.0% of the shares. In total, Ericsson has secured 75.1% of the registered share capital in LHS.
 
ABN AMRO acts as Ericsson's sole financial advisor in the transaction.

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4th June 2007

COMSTAR UTS acquires 25% stake in Comstar-Ukraine

COMSTAR United Telesystems (COMSTAR UTS) has announced that it has acquired the remaining 25% minority stake in Comstar-Ukraine, from Neotel, its Ukrainian partner, for a total cash consideration of US$900,000. Following the closing of this transaction, COMSTAR UTS will become the sole owner of Comstar-Ukraine.

In accordance with the local regulations, COMSTAR purchased a 24% stake in Comstar-Ukraine, while UTS MGTS, a 100% subsidiary of Moscow City Telephone Network (MGTS), acquired the remaining 1% stake.

Mladen Pejnovic, Vice President for International Business Development, commented: “This acquisition was done in accordance with the Company’s strategy of consolidating minority shareholdings in its subsidiaries to allow full control over the development and operations in these companies.”

COMSTAR UTS is a combined telecommunications operator in Moscow and the Moscow region. The company provides voice, data, Internet, pay-TV and other value-added services to residential and corporate subscribers and operators, using its backbone network and last mile access to 98% of Moscow households. The company also offers communications services in several Russian regions, and CIS and Eastern European countries. Comstar UTS had 3.6 million traditional fixed-line subscribers, over 500,000 alternative operator segment subscribers in Moscow, and almost 100,000 alternative segment subscribers in the Russian regions outside Moscow, as at December 31, 2006.

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4th June 2007

KPN selects Alcatel-Lucent as lead network integrator for IP Centrex/VoIP services for business markets

Royal KPN NV has selected Alcatel-Lucent as lead network integrator to design, deliver, install, integrate and maintain an end-to-end multi-vendor IP Centrex solution. The Advanced Hosted VoIP solution is part of KPN’s All-IP strategy, which aims at building a next-generation network based on IP technology. The network enables KPN to offer hosted communication services for the small and medium enterprise (SME) market and to deliver a variety of new communication services to both consumers and businesses.

The IP Centrex solution Alcatel-Lucent will deploy is a multi-vendor application and includes products from BroadSoft Inc, Atreus Systems and Comptel Corporation. Alcatel-Lucent will integrate these products on the IMS Core it is currently deploying at KPN. In addition, Alcatel-Lucent will provide design services, network integration, project management and installation and testing services. Alcatel-Lucent was selected after it and KPN concluded a successful pilot.

With the new solution KPN will be able to expand its business communications portfolio by introducing hosted VoIP and virtual PBX offerings to the SME and SOHO market. IP Centrex offers a low-cost solution to businesses that need to replace their end-of-life PBX systems. In addition, it offers IP-based applications to these customers and offers a long term alternative for customers wanting to migrate from their existing ISDN-based network to a fully IP-based environment.

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4th June 2007

Ericsson chosen by KPN to manage access networks in the Netherlands

Ericsson AB has signed a five-year managed services contract with Royal KPN NV for access network field maintenance. Under the contract, Ericsson will assume responsibility for all field maintenance activities and specific employees of KPN's multi-vendor mobile access, Traxys and Semafonie networks across the Netherlands. More than 40 KPN employees will be transferred to Ericsson.
 
The contract, effective June 1, 2007, will allow KPN to focus more strongly on the evolving telecommunications market. KPN has chosen Ericsson to manage its access network activities, including its GSM/DCS access, UMTS access, Traxys and Semafonie networks.
 
The contract will enable KPN to reduce operational expenses, improving its platform for growth, while Ericsson will provide network performance to KPN's customers.

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