23rd > February > 2004 Archive

Voda explains AT&T Wireless defeat

Cingular paid $1.5bn more than it needed for AT&T Wireless, The Sunday Times claims. Vodafone CEO Arun Sarin says he receive a phone call from John Ziegler, his AT&TW counterpart, at 2am on Tuesday - five hours after the final deadline for offers. "We were advised of some numbers that were weaker, and we frankly needed time to consider them," he told The Sunday Times. "It was very unusual. We were quite surprised. We knew that the business was weak, but we didn't know how weak." Sarin spent the next two hours examining the deal for financial logic, but says that there was no prospect of increasing the offer. Now it gets really interesting: according to the heavily-briefed ST, Cingular had already submitted a higher offer than Vodafone. But it got twitchy following several hours of silence from its bid target. "In the minds of Cingular's advisers there could be only one explanation for the prolonged silence: Sarin needed the approval of his board to make an increased offer," the paper reports. Cingular believed that Vodafone had submitted a bid for $14.50 a share - around $39bn. It got the go ahead from its two shareholders, SBC and Bell South, at 1.30am New York time to increase its all-cash offer to $15 a share, or $41 bn. Cingular is sticking to its guns that it snatched AT&TW from under the noses of sleepy Vodafone execs. Literally: the spin from the Cingular camp on Tuesday, the day it won, was that Vodafone executives were asleep in their New York hotel, while the boards of its shareholders, SBC and Bell South were sitting in all-night sessions. The American Dream Vodafone's PR offensive in the weekend papers may contain for-the-record point-scoring, but the main thrust is to mollify big shareholders. The company has to assure the institutions that it won't go mad again in America. No, it won't put in a bid for T-Mobile America, the smallest and weakest mobile network operator, and no it won't go for Nextel either. Right now and perhaps for a very long time, indeed, Verizon Wireless is out of the question, too. Because that would mean making a full-blown hostile bid for parent company Verizon Communications. Often it is more important not to lose than to actually win. Judging from the reaction of the stock market which marked up Vodafone's shares sharply last week, 'defeat' was seen as a victory for shareholders. According to many analysts who ran the slide rule through AT&TW, Vodafone's existing shareholders could have lost out big time if it had won. AT&TW runs Verizon Wireless and Cingular a very poor third in market share and requires huge investment. A realistic enterprise valuation for the business may be as little as $11bn-$12bn.< Vodafone is of course a mostly passive investor in Verizon Wireless in which it holds a 45 per cent stake. It has a put option to sell up to $10bn shares to Verizon Communications by the end of the summer. Some institutions are, the Sundays tell us, pressing for Vodafone to sell its entire stake in Verizon Wireless, freeing up perhaps $30bn to return to investors. Vodafone says it is not wedded to the concept of America. Does anyone believe this? Vive le Difference Vodafone likes consolidation. Last year it mopped up minorities in several country subs. But it will have to play the long game in America. It will probably be a different story in France. Institutions are concerned that Vodafone doesn't go mad and launch a hostile bid for Vivendi, controlling owner in SFR, the French operation in which Vodafone is also a major shareholder. It wants to own SFR and could succeed with a friendly offer. Vivendi is understood to want $18bn for its stake in SFR - at least $4bn more than Vodafone is currently prepared to pay. Vivendi would lose a big cash cow, but will emerge debt-free and shorn of a potential predator. It is only a matter of time before Vodafone carries the day with SFR. ® Related stories Verizon, Vodafone stake out in the US AT&T Wireless awaits prom call from Vodafone Vodafone's AT&T interest confirmed< Vodafone loses AT&T Wireless battle
Drew Cullen, 23 Feb 2004

Mobile operators face EC action over roaming

The European Commission is still considering formally charging mobile phone operators with breaches of competition law. The Commission raided phone company offices in July 2001 but never laid formal charges. According to the Financial Times this could happen as soon as this summer. mmO2, Orange, T-Mobile and Vodafone are all under scrutiny. Competition commissioner Mario Monti believes the cost of calls is too high, and too similar, for all the major networks. The investigation is believed to centre on roaming charges - the price you pay for making and receiving calls outside your home country. The EC is making internal changes to reduce the time such investigations take - Coca-Cola has been under investigation in Germany since 1999. ® Related Products Check out all the latest phones at The Reg mobile store
John Oates, 23 Feb 2004

Email billing saves trees

Electronic billing was supposed to be the big cost saver for utilities companies - and now it's starting to happen. Gas and electricity supplier Centrica is already billing 150,000 customers by email, according to the FT. Customers signing up for emails instead of bills also get a discount. Centrica hopes to get a million customers signed up to the service by 2005. Centrica sends out 70 million gas bills and 30 million electricity bills so savings could be significant. The project has been running for a year but following a recent advertising campaign up to 15,000 customers a week are signing up to ebilling. Powergen has 100,000 customers who run their accounts through the energyonline website. ®
John Oates, 23 Feb 2004

Egg blames France for big losses

Online bank Egg more than doubled its losses compared to last year and blamed poor business in France. Good profits for the UK business - £72.8m in the UK, were eaten up by losses of £89.1m in France. Overall, the bank lost £34.4m compared to a loss of £16.6m in 2002. It now hopes to break even by 2005. Egg added 635,000 new customers last year and now has three million customers in total. Paul Gratton, CEO at Egg, said: "In the UK Egg has had a phenomenal year....However, in France the underlying business performance has been very disappointing." Prudential Insurance, which owns 79 per cent of the online bank, is keen to sell the business. MBNA and Alliance & Leicester are the favourites to buy Egg - worth up to £1.6bn - according to the FT. RBS, an early front runner, is understood to have lost interest, following a disagreement with Egg over price. ® Related story Pru in talks to sell Egg
John Oates, 23 Feb 2004

KPN offer stokes mmO2 bid excitement

Speculation over the future of mobile operator mmO2 was rampant on Monday after Dutch telecoms company KPN made an offer for the firm. The friendly offer, which was rebuffed on Friday when O2 said it had ceased talks with an unnamed operator, has prompted conjecture over whether the mobile arm of Royal KPN NV will now launch a hostile takeover. Numerous reports note that KPN has refused to rule out such a move, although the Financial Times cites a person close to KPN who said there was "zero chance" of a hostile bid. KPN offered about £9.5bn, or £1.10 per share, for mmO2 in a stock and cash deal, according to The Guardian. Based on Friday's closing price in London, mmO2 has a market capitalisation of about £8bn. KPN, meanwhile, has recently received a fresh influx of cash after an unexpected tax settlement with Dutch authorities helped bring in €1.08bn in 2003 net profits as well as other benefits. If combined, KPN Mobile and mmO2, the former wireless arm of British Telecom, would create a company with some 35 million subscribers in Europe, with operations in Germany, Belgium, the Netherlands, Ireland and the UK. Currently, KPN Mobile has around 15 million customers after adding 500,000 in 2003, while mmO2 has just over 20 million. The greatest cost-savings and synergies would likely come in Germany, where KPN-controlled E-Plus and O2 Germany are the number four and number three operators respectively. There has been widespread speculation for years that KPN Mobile and mmO2 would merge, as both are now deemed too small to survive in a market dominated by the likes of Vodafone, Orange and T-Mobile, all industry giants. Amidst the guesswork, the names of other operators - Telefonica Moviles and Telecom Italia - have also been dropped several times over the years as possible suitors to mmO2, and these names have arisen again. Analysts, though positive on the possible outcome of a deal at the right price, have not been overly optimistic that such a thing will happen. The value of mmO2, particularly O2 Germany, has long been a sticking point in earlier negotiations, and it has been suggested that the impasse will be no easier to resolve now than in years gone by. In related news on Monday, KPN, the telecoms company that owns 98 per cent of KPN Mobile (with NTT DoCoMo owning two per cent), posted its sixth straight quarterly profit thanks to tax gains and cost cuts. The company said that net income in the last three months of 2003 rose to €1.639bn, well ahead of most estimates and up from €7m in the same period a year earlier. Fourth quarter operating revenue was €3.088bn compared with €3.136 bn in the same period a year earlier. For the full 2003 year, KPN reported a profit after taxes of €2.731bn compared to a loss after taxes of €9.542m in 2002. Operating revenues for the full year rose to €12.209bn compared with €12.170 bn a year earlier. "We have achieved most of the ambitious goals that we had set ourselves for 2003. Despite the competitive market environment, we have managed to deliver cash flow ahead of market expectations and we are now in a position to reward our shareholders by resuming dividend payments," said CEO Ad Scheepbouwer. © ENN Related stories Mobile operators face EC action over roaming O2 opens text services to the US 02 notches up 20m punters
ElectricNews.net, 23 Feb 2004

Judge bans DVD X Copy software

DVD duplication software maker 321 Studios has been given seven days to stop selling its controversial DVD X Copy family of utilities, a US federal judge has ruled. The ruling follows legal action brought against the developer by MGM Studios, Tristar Pictures, Columbia Pictures, Time Warner Entertainment, Disney, Universal City Studios and The Saul Zaentz Company last May. The movie companies alleged 321's product violated the Digital Millennium Copyright Act (DMCA). US District Judge Susan Illston, delivering her verdict on Friday, agreed - and formally banned 321 form manufacturing, distributing or otherwise trafficking in the DVD X Copy series. Shortly after the judge's decision was announced, 321 stated its intention to appeal against the ruling and to request that the ruling be suspended until the appeal has been judged. 321 offers a number of version of DVD X Copy, all based on DeCSS, the open source DVD content descrambler written to allow Linux users to watch DVDs on their computers and already the focus of considerable legal activity. If it loses its appeal, the company will strip out DeCSS from DVD X Copy, but since it's widely available on the Internet, such a move shouldn't hinder matters much. The movie studios action against 321 follows action it took against them to force a legal ruling on the validity of the DMCA, specifically with regards to its limitations of fair use. 321 claims its software allows users to make back-up copies of DVDs they have purchased. By enabling such a 'fair use' under pre-DMCA US copyright law, its software should not fall foul of the DMCA. That the wording of the DMCA suggests it does is a confusion that the courts must clarify, the company says. Meanwhile, 321 is the subject of legal action launched by Warner Home Video in the UK, alleging infringement of the European Union Copyright Directive - Europe's answer to the DMCA - and of the UK Copyright, Designs and Patents Act of 1988. ® Related story UK movie biz strikes again at DVD copying software maker
Tony Smith, 23 Feb 2004

Kazaa trial judge delays hearing

Kazaa owner Sharman Networks will have to wait until next week to hear if the Australian federal court will suspend legal action brought against it by the Aussie music industry. Judge Murray Rutledge Wilcox adjourned a hearing due to take place this past Friday in order to allow the parties to make further submissions this week, the peer-to-peer software company said. Music Industry Piracy Investigations (MIPI), an organisation sponsored by the Australian Recording Industry Association (ARIA), opened proceedings against Kazaa on 10 February. It claims the company is guilty of aiding and abetting copyright infringement. At the earlier hearing, Kazaa's lawyers asked Judge Wilcox to suspend the case pending the outcome of a similar hearing being held in the US Court of Appeals. The latter case pitches the US movie and music industries against P2P services Grokster and Morpheus. The content companies want the appeals tribunal to reverse an earlier judgement, that the P2P providers can't be held liable for illegal copyright violations performed by their users. The lower court's verdict was based on precedent that no longer apply, the appellants claim. Kazaa's Australian legal team maintains that the outcome of the US case has a direct bearing on MIPI's lawsuit. They also say that MIPI did not present the all the information it should have when applying for the Anton Pillar orders that permitted a series of raids to be made against Sharman Networks and others earlier this month. The lawyers allege that MIPI did not tell Judge Wilcox, that Sharman had already agreed to submit to depositions and co-operate fully with the US Court of Appeal proceedings. The Anton Pillar orders have also been challenged by the three universities raided: the University of Queensland, the University of New South Wales and Monash University. On 6 February, the day of the raids, MIPI agreed to keep aside information acquired during these three particular raids until a further court order has been obtained. Sharman's Australian lawyers are being advised by David Casselman, the company's legal representative in the US Appeal Court hearing. He believes that the appeals tribunal will reaffirm the original verdict. ® Related stories Kazaa demands Oz trial delay Music industry raids Kazaa's Australia HQ Grokster, Morpheus face MPAA in appeals court
Tony Smith, 23 Feb 2004

Symbian minorities to block Nokia sale

Nokia's bid to own 63 per cent of Symbian could be in doubt. Earlier this month Psion announced its intention to sell its 31.7 per cent stake in Symbian to Nokia for up to £135.5m handing the Finnish company control of the company. But unnamed sources have told Reuters that other shareholders, including Ericsson, could use their own rights to buy Symbian shares to block the move. If successful, Nokia could be left with just 46 per cent of Symbian, Reuters says. The Symbian operating system shipped in 2.76 million handsets in the fourth quarter of 2003. This was up from 0.98 million for the fourth quarter of 2002. In December the smart phone OS designer exceeded the million phones a month mark for the first time. Some 6.67 million Symbian phones in total shipped during 2003 - More than ten million phones now use the software. Eighteen Symbian OS phones from five licensees were available in the period. At the end of the fourth quarter nine licensees were preparing 26 phones for market. Two licensees shipped four 3G handsets to NTT DoCoMo in Japan and three in Europe. Symbian receives $7.25 per unit for the first two million units, and $5 thereafter. ® Related stories Nokia bags Psion's Symbian stake Nokia - dooming Psion's legacy to obscurity? Related Products Find your next PDA at The Reg Mobile Store
John Oates, 23 Feb 2004

Group Sense updates Palm OS smart phone

PalmSource smart phone licensee Group Sense PDA's latest handset will not be using the mobile operating system supplier's phone-oriented Garnet OS - at least, not yet. Instead, the upcoming G88 device will run Palm OS 4.1.2, the company announced today. Hong Kong-based GSPDA already offers the Palm-based Xplore G18 dual-band (900/1800) GSM/GPRS handset, which it launched last July. Group Sense became a Palm OS licensee in December 2002. The G88 sports a 2.2in 16-bit colour screen and a 320 x 240 digicam. Memory-wise, it contains 16MB of ROM, 16MB of RAM and 22MB of Flash storage on an internal memory card. It supports text and multimedia messaging, WAP, email and Java applications. The phone's case slides open to reveal a numeric keypad, and there's a five-way navigation control "to fit the natural habits of mobile phone users", as GSPDA puts it. GSPDA didn't reveal any other specs., but the use of Palm OS 4 means it has to be based on a Motorola Dragonball processor, most likely the 33MHz VZ used in the G18. Indeed, the two handsets' published specifications are remarkably similar, suggesting the only big difference is the G88's integrated keypad. The company said it was currently in negotiations with "several" mobile networks, though no indication was given as to which territories they operate in. The G18 is currently available through TA Orange, a joint venture between Orange and Telecom Asia. ® Related Products Find your next PDA at The Reg Mobile Store
Tony Smith, 23 Feb 2004

Linux Bash Shell Scripting at 30 per cent off

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Team Register, 23 Feb 2004

Nokia and IBM update the Communicator with Wi-Fi

3GSM3GSM Nokia has buffed up its venerable 9000 series Communicator with tri-band GSM, GPRS EDGE and Wi-Fi support, in partnership with IBM. But this isn't the long-awaited version based on the Hildon user interface. It uses Series 80, which made its debut three years ago but which has been de-emphasized in favor of the new Series 90 platform. Series 90 differs by adding pen-input and sleeker menus. The phone is pitched firmly at enterprises. IBM has added security and management features, and prodded Siebel and SAP to release client versions of the software for the phone; a price tag of €800 ($1000) should keep it out of reach of the consumer market. Sources told The Register that the first keyboard-based device to sport the Hildon user interface was late because of an internal decision to use backport the UI to Series 80. Series 90 was delivered in November, with the as-yet unreleased 7700 media phone. The 9500 is pretty significant in at least one respect: it's Nokia's first Wi-Fi phone, and shows that Nokia carrier customers have nothing to fear from supporting devices with both cellular and 802.11b technologies. ® Related Products Find your next PDA at The Reg Mobile Store The Register 3GSM coverage in full
Andrew Orlowski, 23 Feb 2004

UK passes 2m-line ADSL milestone

There are now more than two million ADSL connections in the UK, according to figures revealed by dominant telco BT. Chuffed to bits that it's taken just eight months to notch up its "second million", BT's chief exec, Ben Verwaayen, said: "The phenomenal growth we are now seeing in the broadband market is excellent news for the whole economy, and for the UK broadband industry in general. Over the next few years we will all have to continue to work hard to maintain this momentum, but I have no doubt that this is absolutely achievable." BT is keen to make it known that it's really put its weight behind broadband over the last couple of years. For example, nine out of ten homes and businesses are expected to be connected to a broadband-enabled exchange by the summer. While as of today, some 2350 telephone exchanges are broadband-enabled with more than 800 in the pipeline ready to be wired up for ADSL. As far as BT is concerned, the UK is the "most competitive broadband market in the world" with more than 150 customer-facing ADSL providers and cable companies accounting for about 40 per cent market share. Snag is, not everyone sees it like that. Only last week, AOL UK called for greater wholesale ADSL competition in a bid to stimulate the market and drive growth and innovation. And earlier this month an influential group of MPs found that the UK lacks effective wholesale broadband competition and needs regulatory intervention to restore confidence to the industry. ® Related Stories AOL calls for UK broadband competition UK held back by 'lack of broadband competition'
Tim Richardson, 23 Feb 2004

Isoft – Torex marriage postponed

A new ruling by the UK Court of Appeal means that the proposed $1.2 billion merger between healthcare services providers Isoft Group and Torex is no closer to being given the green light. This setback may reduce their chances of winning lucrative NHS services contracts. The UK Court of Appeal has ruled that the Competition Appeals Tribunal "adopted a wrong test" in assessing and judging that the planned merger would be anti-competitive. The Office of Fair Trading says that the ruling is good news since it means that the OFT now has more control over the merger process, and is able to establish what tests need to be applied to mergers and acquisitions. The Isoft and Torex merger case is the first test of the new Enterprise Act of 2003, that involved the proposed deal being cast into doubt last December after the CAT reacted to concerns from Australian rival firm IBA Health that it could be anti-competitive. However, the OFT believed that there would not be any lessening of competition in the UK marketplace despite both Isoft and Torex having strong positions in the UK healthcare software services market. The OFT then launched its appeal with the Court of Appeal to confirm whether CAT had employed the wrong tests to come up with its judgment. The ruling by the Court of Appeal means that the merger is going to be passed back to the OFT for consideration once again. The whole process could be drawn out even further and it is likely to be sent again to the Competition Commission for assessment. Any further delay to the judgment on whether the merger will go ahead is likely to cause a serious headache for Torex and Isoft, which have both bid to secure a larger share of the multiple-billion dollars' worth of NHS services contracts recently handed out to Accenture, CSC, Fujitsu and BT. The companies claim that the merged group would be better placed to service the requirements of the National Application Service Providers and the LSPsin the five geographic regions in England. Isoft has already lost out on a £896 million piece of the final NHS IT services contract, which was awarded to a consortium led by Fujitsu Services in January. Source: ComputerWire/Datamonitor Related research: Datamonitor, 'Strategic Enterprise Networking Opportunities", (DMTC0849).
Datamonitor, 23 Feb 2004

Ericsson: from A to B and back again

Ericsson plans to reform its controversial voting structure to allow foreign shareholders a greater say in the company. However, the plan will do little to alter the current balance of power since the two existing controlling shareholders will remain in charge. Under LM Ericsson Telefon's current dual-class shares system, the "A shares" carry 1,000 times the voting rights of "B shares". Many Nordic companies have A shares with 10 times the votes of B shares, according to the Financial Times. Currently, both types of shares entitle their owners to the same share of Ericsson's earnings, but the greater voting rights associated with the A shares means that those groups with a majority of A shares have been able to control the company, despite holding just a tiny share of the company's capital. This arrangement has antagonized foreign shareholders and indeed, the company's own management. Ericsson itself has 15.3 billion B shares, but only 650 million A shares. Under the agreed plan, A shareholders will have the right to convert one B share to one A share, for every A share they already hold. Those not wishing to exercise the right are being offered SEK1.1 ($0.15) per share by a group of Swedish institutions. The plan will be presented to Ericsson's annual meeting on 6 April. The two power blocs that currently control Ericsson are Investor, the holding company of the powerful Wallenberg family, and Industrievaerden, which is owned by the banking giant Handelsbanken. At the moment, these two control 80 per cent of the votes with less than 10 per cent of the capital. After the reform however, they will still remain in control, with 40 per cent of the votes. That said, Swedish institutions and foreign shareholders will gain greater influence, with the combined voting power of foreign shareholders rising from 2 per cent to approximately 20 per cent. According to the Financial Times, both the Wallenberg and Handelsbanken power houses are expected to convert their B shares to A shares, demonstrating their determination to retain control of Ericsson. This could anger foreign shareholders and also does very little to alter the balance the power with the company. However, for Ericsson's management, it should help them raise capital in the future. Source: ComputerWire/Datamonitor
Datamonitor, 23 Feb 2004

WH Smith bins CD singles

UK retailer WH Smith has blamed falling sales for the decision to pull CD singles from its shelves. The company will use the free shelf space to sell other entertainment products. The decision followed a review of trading by Boston Consulting Group and Cap Gemini Ernst&Young, according to the Guardian. It will continue to retail CD albums. The British Phonograhic Institute (BPI) estimates CD album sales rose 5.6 per cent in the UK last year. But sales of singles crashed more than 30 per cent. The BPI is currently piloting a project to count songs downloaded from legitimate websites. This information will initially be used to help promote legal download sites and will then be incorporated into the existing charts.® Related stories Copy-crippled CDs launch in UK, baffling Auntie Beeb BPI forces CD Wow to drop price surcharge claims cd-wow fights BPI over imported CDs
John Oates, 23 Feb 2004

One billion people use GSM phones

More than one billion people worldwide now enjoy the benefits of GSM, the GSM Association says. This helped generate global GSM revenues of $277bn in 2003 - a figure expected to rise to over $500bn in 2005, according to a white paper from Deutsche Bank. The study claims that GSM is closing the digital divide because mobile comms can go where no fixed line dares to tread: Gareth Jenkins, telecoms analyst at Deutsche Bank, said that GSM has made a real impact on people's lives by bringing modern telecommunications services to "chronically under-served communities in Africa, Asia and Latin America". The one billion punters comprise one sixth of the global population - equal to the number of people who have no access to safe drinking water. According to Rob Conway, CEO of the GSM Association, the record figure was reached last month, a little earlier than expected. The association claims up to 80 per cent of new phones are GSM phones, and says that uptake of wireless technology means that mobiles now outnumber fixed landlines. More handsets are in daily use than the total number of personal computers and televisions combined, according to this study. The huge popularity of mobile phones in poor countries is unsurprising. They are a great way of getting communications to places where alternative technologies would be astronomically expensive. But it is a moot point if mobiles are simply closing the telephonic - as opposed to the digital - divide. In the last twelve months, GSM added nearly 198 million new users - more than CDMA, the second-placed mobile technology, had in its global customer base at the end of 2003. According to the Deutsche Bank study, at least 85 per cent of the world's next-generation wireless customers will use the GSM family of technologies - GSM/GPRS, EDGE and 3GSM - for both voice and data services. ® Related stories 2003 was record year for mobile phone shipments Vodafone tops 130m customers Global mobile data users to exceed 115m
Lucy Sherriff, 23 Feb 2004

France Telecom bids for outstanding Wanadoo shares

France Telecom (FT) wants to acquire the outstanding shares in its ISP division, Wanadoo, in a bid to cash in on future revenues from the growth in broadband. Like other incumbent telcos, FT's traditional voice revenue streams are being squeezed and it reckons that broadband is one area where it can generate new revenue growth. Announcing its intention to purchase the minority interests in Wanadoo (29.4 per cent) FT said it was prepared to offer €8.86 per Wanadoo share, a premium of 17.2 per cent on the closing share price on Friday. The closing date for the public offer is April 13. As part of the strategy it wants to re-integrate the Wanadoo ISP (which has operations in a number of European countries including the UK) within the FT business with an eye to develop "targeted offerings" with integrated voice/data/image services. Its view is that broadband is moving beyond plain old Internet access and could end up generating revenues from combining voice, TV, video, videophony and games. In a statement FT chairman and CEO Thierry Breton, said: “This transaction constitutes a major step in the implementation of our vision of the client at the centre of his communication universe and is a step further in our development as an integrated operator and in line with our ambition to become the best European operator. "The development of broadband is in the process of profoundly changing the usages of our customers. Broadband is thus at the heart of our strategy." Another telco with broadband at its heart is BT. Publishing its latest set of figures earlier this month the UK's dominant fixed line telco said that the increasingly rapid uptake of broadband and other "new wave" technologies had helped it increase pre-tax profit. While the telco's traditional business is still in decline, courtesy of increased competition and regulatory intervention, BT's "new wave" business continued to thrive. New wave turnover - which includes revenues from Information and Communications Technology (ICT), broadband, mobile and managed services - jumped 31 per cent to £838 million, compared to a 25 per cent increase in the second quarter. Broadband revenues increased 129 per cent to £128 million. Last week we reported that the European Commission is to keep a close eye on Wanadoo's accounts until the end of 2006 following allegations of predatory pricing against the French ISP. According to reports the Commission has ordered Wanadoo to hand over accounts for surveillance in order to prevent any further abuse of its dominant position. ® Related Stories EC to crunch Wanadoo's numbers Broadband helps lift BT
Tim Richardson, 23 Feb 2004

419 haiku results delayed

The results of our 419 haiku competition have been postponed after hundreds of wannabe poet laureates jammed El Reg inboxes with 17-syllable masterpieces. Accordingly, the results - which will announce who has won one of our magnificent Strategy Boutique t-shirts - will be announced later in the week. Suffice it to say for now that the standard has been almost uniformly high: we say almost because, sadly, there have been a number of entries establishing a new benchmark of lyrical ineptitude. Still, it's all a bit of fun, and you will soon be able to see just how talented - or otherewise - our readers really are. Watch this space. ® Bootnote Thanks very much to David Shepherd, who has just composed this haiku on the subject of this tragic delay in the competition results: Results are delayed "A Poetic Tsunami" Vulture Central Swamp'd Right - that's enough haikus.
Lester Haines, 23 Feb 2004

PS2 dominates January UK hardware sales

Post-Christmas sales helped demand for the main three consoles jump by over nine per cent, according to the latest figures released by ChartTrack, but sale pricing meant that the value of the market was down. An estimated total of 18,000 more consoles sold in the five weeks to 31 January, compared to the same period last year, but with price reductions taken into account, the true value of the market fell by around 18 per cent, based on the recommended retail price. During January, the PS2 continued to rule the roost, outselling its nearest competitor - the Xbox - by almost 2.4 to one, while also managing to outsell the GameCube by 5.4 to one. Even against both its rivals, the PS2 outsold them on its own by 1.66 to one, demonstrating that the yawning gulf is showing no sign of closing. Dominant In terms of unit sales, the PS2 actually sold three per cent less than in the same period last year, while the value of PS2 sales was down by around 25 per cent, making it the only console to not show any growth during the post Christmas sales. But this is hardly surprising when you consider the machine is fast closing in on the six million installed base mark - an incredible feat after just three years and three months on sale. The fact that the PS2 generated roughly nine times the revenue of the average Cube for the average store during the five weeks after Christmas demonstrates the dominance of the format in the UK currently. The PS2's nearest rival, the Xbox, enjoyed unit sales growth of 25 per cent on the five weeks to 31 January, although the price cuts over the course of the year ensured the Microsoft machine only pulled in just over one per cent more through the tills than the same period last year. Although the machine is still being walloped by the PS2, the gap between it and the Cube is an almost identical 2.3 to one. But from a retailer's perspective, the Xbox brought in almost 3.7 times the revenue of selling a Cube, based on their respective standard retail prices. Grim Although the Cube picture looks grim for Nintendo, the news isn't all bad. Unit sales for the five weeks to the end of January were actually up an impressive 78 per cent on the same period in 2003, making it - on the surface at least - by far the fastest growing console in the UK, but perhaps more a demonstration of how badly the format was doing back then than a cause for celebration back in Kyoto. In terms of the value of those sales, though, the £50 price cut since then means that the value hasn't changed a great deal - up an estimated nine per cent on the period, but when the value of those sales is almost nine times less than that of the PS2, then it's fair to say the console is in a distant third place. Taking handheld consoles out of the equation, Nintendo has 11.4 per cent of the market, well up on the 6.9 per cent it held at this point last year. Sony has seen its market share eroded from 70 per cent in the first five weeks of 2003 to 62.4 per cent. Xbox, meanwhile, now holds 26.1 per cent of the market, up on the 22.8 per cent it held this time last year. Having had four Christmases in the market, you'd expect the PS2 to have received a sterner challenge from its younger and more powerful rivals. To still account for almost two thirds of all the sales against rivals offering cheaper or better value deals is an achievement in itself. Choppy waters It's getting into choppy waters to argue the relative merits of each machine's software line-up, but the commercial facts speak for themselves: the Xbox's set of exclusives (Halo aside) hasn't performed to the levels required in the UK to tempt people away from buying a PS2, while the Cube first party line-up has relied almost exclusively on rehashes of old kid-friendly brands, with precious few all-new titles emerging to make the machine an essential purchase. And the tardiness of converting titles for a PAL release in the format's early days (Metroid Prime, notably) hardly helped it - a lesson apparently unlearned given the ridiculous delay to this year's Mario Golf title. Nintendo of America updated its release schedule for the year, but it's hard to see where the commercial triple-A titles are going to emerge from to keep the format on retail shelves all the way up to Christmas. As for Sony, it's been plain sailing ever since GTA3 entered the stores. Call it a lucky break, good timing, or whatever, but it had the foresight to keep this generation's best-selling game exclusive for long enough for win the console war hands down, and as a result it's tough for most developers to consider not making a version of their game on the platform. With a further price cut of the PS2 likely to arrive well before the autumn, is there any stopping Sony's machine? Copyright © 2004, GamesIndustry.biz
gamesindustry.biz, 23 Feb 2004

IBM ThinkPad X31

ReviewReview It was only a couple of weeks ago that I reviewed the IBM ThinkPad T41p and proclaimed it the best notebook that I've ever used. This week that statement still stands although the ThinkPad X31 is still a fine mobile companion, writes Riyad Emeran. The ThinkPad X31 is part of IBM's ultra portable range and it's certainly slim and light. With dimensions of 27.3 x 22.3 x 3cm and a weight of only 1.6kg the X31 will be an unobtrusive companion. Being an ultra-portable notebook there's no integrated optical drive, so you're going to have to be sure that you won't need one when you're on the move. That said, this type of notebook is aimed at the user who is most concerned with a small and light mobile computer and will forego some of the features that other notebook users insist on. Despite the X31's undeniably small dimensions, IBM has still managed to squeeze in a superb keyboard. Just like the T41p, the X31's keyboard has a fantastic action that makes typing long documents a breeze. Obviously the size of the keys are slightly smaller and the Return and Backspace keys aren't as large as some may like, but this is still a superior keyboard to those seen on most other notebooks. Due to space constraints you only get a Trackpoint so if you prefer using a touchpad you're out of luck. Personally I prefer a good Trackpoint and the space saved is paramount in an ultra-portable notebook. As always seems to be the case with ThinkPads, the Trackpoint is superb and pointer manipulation is simple and efficient. Another neat feature that's evident on ThinkPads is the keyboard light. This is a little light embedded in the lid above the screen that illuminates the keyboard when you're working in dark conditions. The screen is a 12.1in TFT model with a resolution of 1024 x 768. Although that's pretty conservative by modern notebook standards, it's still acceptable on a slimline model like this. The screen itself is excellent with a bright, vibrant image and even backlighting across the whole surface. The viewing angle is wide enough for the odd huddle around a desk and there is no sign of any dead pixels. Amazingly IBM has still managed to squeeze a decent amount of ports into the X31's diminutive chassis. On the left hand side you'll find a single PC Card slot, a CompactFlash slot, a USB 2.0 port and a FireWire port. There are also headphone, mic and line-out ports. At the rear is a D-SUB connector to link the X31 up to an external monitor and a parallel port. Connectivity is also catered for at the rear with a 56Kbps modem socket and an Ethernet port for the 10/100Mbps network adapter. Inside the chassis you'll find a 1.4GHz Pentium M CPU backed up by 256MB of RAM. Personally I think that 256MB of RAM is not sufficient these days, but of course memory capacity can be augmented at purchase. There's a 40GB hard disk which is pretty generous in a device this small, but the somewhat dated 16MB ATI Mobility Radeon graphics chipset won't satisfy any potential mobile gamers. That said, this notebook is most definitely not aimed at the mobile gaming market. Since the X31 is based on Intel's Centrino standard there's an 802.11b Wi-Fi adapter inside. In use the Wi-Fi worked flawlessly in all environments, although I found signal strength to be a bit of an issue in my home. This, however, isn't really a criticism of IBM as I live in a very old house with thick walls, and the X31 didn't drop the signal once even under this 'hostile' wireless environment. Unlike the T41 and T41p ThinkPads that I reviewed recently there's no integrated Bluetooth which is a shame in a machine that's likely to be with the user all the time. Bluetooth gives you the advantage of being able to get online via your mobile phone when you can't find a Wi-Fi hotspot. The X31 is a reasonable performer considering it's size and configuration, as you can see from the performance stats. The overall SYSmark 2002 result of 138 isn't the fastest score we've seen from a Centrino-based notebook, but it's more than acceptable and will provide enough power for any applications that you're likely to want to run on a machine like this. Battery life was three hours and 38 minutes, which again isn't amazing for a Centrino machine, but considering the size and light weight of the X31 it's understandable if not completely acceptable. Obviously IBM is aware of the limited life of the standard battery and offers several options to enhance the power on the move. The most obvious option is the X30 series Extended Life Battery which will add around 0.5kg to the overall weight and some bulk to the underside of the chassis. The result is a pleasantly angled typing environment and obviously much longer battery life on the move. At a price of £165 the Extended Life Battery isn't cheap, but if you need to use the X31 for extended periods on the move it might be worth investing in. Talking of optional extras, you're going to need to invest in the X3 Ultrabase. The Ultrabase is a port replicator that also features space for another battery. The most important aspect of the Ultrabase is the media bay where you can mount an optical drive, but this has to be purchased separately. So, if you want to use a DVD-ROM/CD-RW combo drive with your X31 you're going to have to purchase the Ultrabase at £175 and then buy the drive for an additional £234. You can get around this by just investing in an external USB optical drive, the cost of which will be much easier to swallow. Ultimately this is where the X31 stumbles. With a street price of £1213 the additional cost of the Ultrabase and optical drive will push the overall price up so much that I'd be tempted to go for a T41 (although unfortunately not a T41p) instead. Given, the X31 is slimmer than the T41 and if you don't need to have an optical drive with you very often it will be a joy to carry around, but for me I'd suffer the slightly heavier and bulkier chassis of the T41 considering the cost differential would be negligible. All that said, if you want a very small and slim notebook that you can carry around with you everywhere the X31 makes a good case for itself. Verdict There's a lot that I like about the X31 and given that I rarely use an optical drive on the move I'd love to have one in my bag everyday, although given the choice I'd probably still go for a T41. But if you're set on an ultra-portable you'd be hard pushed to find a better model than this. IBM ThinkPad X31 Rating 80% Price £1213 More info The IBM web site Related Reviews IBM ThinkPad T41p Evesham Voyager 64 Athlon 64 notebook Acer TravelMate 661LMi laptop Sony Vaio PCG-Z1RMP Visit The Reg's Review Channel for more hardware coverage Related Products Visit The Reg Mobile Store
Trusted Reviews, 23 Feb 2004

Court rules for IBM pensioners

IBM underpaid pension benefits for 140,000 employees and ex-employees, according to a US court ruling. The computer giant changed its pension scheme in 1999 but the court in East St Louis ruled the changes illegal late last week. The decision opens the door for higher payments for people who lost out as a result of the move from a traditional to "cash-balance" scheme. The case was brought by IBM employee Kathi Cooper. IBM is meeting plaintiffs this week, but insists it will appeal the ruling, Reuters reports. The decision is important for several big companies which switched their pension schemes including Eastman Kodak and EDS. ® Related stories IBM teaches sales force to go vertical IT giants criticised for running third world 'sweatshops' IBM to outsource thousands of euphemisms
John Oates, 23 Feb 2004

US woman in 419 kidnap terror ordeal

Let's face it - it's not every day that you get an email from one of President Kennedy's former squeezes who finds herself rather inconveniently imprisoned in a hole in the ground with only a computer for company and $10m dollars to give away to worthy causes. This latest 419 variant marks an interesting departure for the lads from Lagos. Connoiseurs of the genre will enjoy its sheer audacity, even if its delivery in old-fashioned 419 CAPITALS makes it hard work on the eyes: -----Original Message----- From: amanda clinton [mailto:amanda_clinton@luxmail.com] Sent: Friday, February 20, 2004 1:55 PM To: amanda_clinton@luxmail.com Subject: "IT IS TIME TO ACT NOW"!!! FROM MISS AMANDA CLINTON. HI THERE, MY NAME IS AMANDA CLINTON A WOMAN FROM "IN GOD WE TRUST "!!! COUNTRY CALLED UNITED STATE OF AMERICA (U.S.A), A WOMAN FROM NEW YORK. I AM SEVENTHY YEARS OF AGE (70YRS), ONE OF THE FIRST THREE GIRL FRIEND OF JOHN KENNEDY. BUT AFTER ALL MY RELATIONSHIP IN MY EARLIEST 20TH AND LATE 30TH,I DID NOT SETTLE FOR ANY MAN. I HAVE NO FAMILY LOSE THEM FROM MY TEENAGER AGE BUT RIGHT NOW I AM ONE OF THE UNKNOWN MULTI MILLIONAIRE SUCCESSFUL WOMAN IN U.S.A. WHEN I WAS KIDNAPPED BY UNKNOWN GUN MEN TO AN UNKNOWN COUNTRY WHICH I DON'T HAVE IDEAL OF WERE I AM , BECAUSE I WAS PLACE IN AN UNDER GROUND IN A RURAL AREA WERE I ONLY HAVE ACCESS TO COMPUTER ONLY, WHICH THEY DIDN'T KNOW THAT I CAN OPERATE COMPUTER. RIGHT NOW I HAVE BEEN GIVEN A MONTH TO LIVE BY THI GUN MEN BECAUSE I REFUSED TO SIGN AND TRANSFER MY MILLION TO THIER ACCOUNT. BUT BEFORE I WAS KIDNAPPED BY THIS GUN MEN SOME BODY WROTE ME A MAIL JUST LIKE AM WRITING YOU NOW TELLING ME ABOUT THE KIDNAPPED PLAN BUT I DID NOT BELIEVE THE MAIL, THE ONLY SUCCESSFUL THING THAT I DID WAS TO TRANSFER ALL MY MILLION TO THIS SECURITY COMPANY IN EUROPE BECAUSE I HAVE AN INTENTION TO RELOCATE TO THE COUNTRY IN EUROPE. RIGHT NOW DUE TO MY UNLIMITED DAYS ON EARTH I HAVE SET OUT PLANS, ALSO EMAIL MY SECURITY COMPANY TO ALLOCATE (SHARE) THIS MILLION OF DOLLARS TO $10MILLION, TO EACH "GOD MINDED PEOPLE" FROM MY APPROVAL THAT CAN CARRY OUT GOD WORK IN A LITTLE WAY THEY CAN. SO IF YOU ARE THAT PERSON THAT AM LOOKING FOR, WHY DON'T YOU VIA ME WITH YOUR PERSONAL PARTICULAR: 1: FULL NAME. 2: PERSONAL PHONE NUMBER AND FAX NUMBER. 3: HOME AND OFFICE ADDRESS. PLEASE TAKE NOTE THAT AFTER ALL THIS INFORMATION HAVE BEEN TRANSFER TO ME, WILL BE AUTHOMATICALLY APPROVED BY ME AND FORWARDED TO MY SECURITY COMPANY IN EUROPE FOR EASY RELEASED OF THE SAID FUND. I THANK GOD ALMIGHTY THAT I HAVE PLAY MY OWN ROLE ON EARTH AM LOOKING FORWARD TO HEAVEN. REMAIN BLESS IN THE LORD AMANDA CLINTON. It's certainly to be applauded that the ongoing closure of the digital divide allows even septuagenarian hole-bound kidnappees to access the Internet, no matter how rural the area in which they find themselves incarcerated. GSM and satellite broadband? Bring it on. We're also impressed that Ms Clinton has the presence of mind to ask for her solicitee's phone/fax/address details - presumably in case she finds herself in the future incarcerated in a telephone kiosk/fax bureau/Post Office by her unwitting gaolers. Sadly, this seems unlikely as time is running out for Amanda. We can only hope that she is sucessful in distributing her $10m before her prison becomes her permanent resting place. ® Bootnote The usual thanks to Kimberly Renee Burgess for alerting us as to Amanda Clinton's plight.
Lester Haines, 23 Feb 2004

Motorola chip launch paves way for 1.5GHz PowerBook G4

Motorola's chip division - soon to be spun off as Freescale Semiconductor - today updated its G4-class PowerPC processor, the MPC7447, taking the part to 1.5GHz and paving the way for one more PowerBook G4 update the line before its upgraded to IBM's 90nm G5 chip, the 970FX. The new Motorola part is dubbed the 7447A and adds on-the-fly clock frequency adjustment, allowing system makers to run at reduced frequencies according to workload. The upshot is longer battery life. And there's now a temperature-sensing diode included to monitor die temperature, Motorola says. At 1.42GHz, the chip consumes 20W of power, Motorola claims, which compares well to the 7447's 21.3W at 1.33GHz. The company also mentions a lower power version of the 7447A that consumes less than 9.3W at 1.167GHz, which seems no better than the old 7447's claimed 7.5W at 1GHz. The low-power 7447A has a core voltage of 1.1V; the regular 7447A runs at 1.3V. Essentially, the 7447A is a revised 7447, itself a low-power version of the 7457. The 130nm 7447 is currently used by Apple in its PowerBook G4. The iBook is based on the older 7455. The 7447 is a trimmed down version of the 7457, losing the latter's support for external L3 cache. The 7457 and both versions of the 7447 contain 512KB of on-die L2 cache. All three are fabbed using silicon on insulator technology. According to Motorola, the 1.42GHz 7447A is shipping in sample quantities to "selected customers" for $245 a go, in batches of 10,000 CPUs. Volume production was not confirmed, but is likely to be reached during Q2 or Q3, we'd say. That gives Apple time to beef up its existing PowerBook G4 line one last time before switching to the G5 - a distinct possibility now that IBM has got the 90nm version out the door. If Apple chooses to go straight to the G5 with the next PowerBook update, the 7447A can always be used to give the iBook a performance boost. ® Related Stories Motorola renames chip division Freescale IBM fabs 90nm G5 using strained silicon IBM 90nm G5 chip to 'outrun' Prescott, Athlon 64 IBM claims massive power cut for 90nm G5
Tony Smith, 23 Feb 2004

Hampshire police deploy e-warranting

Unilink has won a contract with the Police and Magistrates' Courts in Hampshire and the Isle of Wight to integrate the handling of Court warrants. The aim of the project is to improve the percentage of fines that are paid. When an arrest is made, the system will cross-reference the name of the suspect with the database of outstanding warrants, and will flag them to the arresting officer. Peter Downton, operations director at Hampshire and Isle of Wight Magistrates and County Courts, said that both the institutions will benefit from sharing information. He said that a person with outstanding warrents is more likely to abscond from bail, wasting more police and court time. "Police arrest people every day for whom there may be Court warrants outstanding. For the Courts this makes enforcement that much easier," he said. If all goes according to plan, the system will be implemented in April 2004. ®
Lucy Sherriff, 23 Feb 2004

Boingo roams onto All Telecom hotspot network

Wi-Fi hotspot aggregator Boingo has added All Telecom's network of 150 sites in France and Belgium to its worldwide total of over 6000. More than half of these are in Western Europe. The deal with All Telecom is expected to boost that figure significantly by the end of the year. All's expansion plan calls for roll outs in Italy and Spain, taking its own hotspot count to 1500 locations by 2005. All specialises in providing Internet access services to the European hospitality industry. In addition to wireless coverage, it also provides in-room wired connectivity. ® Related Stories Boingo expands hotel WLAN coverage Infonet picks Boingo to host corporate Wi-Fi services The Cloud drifts into Europe with Wi-Fi deals Related Products Visit the Wi-Fi Department of The Reg mobile store
Tony Smith, 23 Feb 2004

Stob: Dylan Beard is not weird

StobStob There was a rare opportunity to meet Dylan Beard in person today when, flanked by a brace of spear-carriers, he brought his campaign to reimplement the 'Wron number to London.
Verity Stob, 23 Feb 2004
Cat 5 cable

Skype plays conference calling card

Skype, the upstart provider of peer-to-peer VoIP telephony services, has added conference calling to its portfolio. The new service lets up to five people to talk simultaneously using their broadband connections. As with its original product, Skype's Beta 0.97 is available to download for free, and has no time restrictions on calls. Following the launch of its P2P voice-over IP service in August 2003, Skype has been criticised for the quality of its calls. Analysts also question the strength of its business model, arguing that the main incentive to switch to VoIP - the price - is being undermined by cheaper and cheaper traditional telephony. Skype faces other challenges: traditional telco players are sniffing around the edges of the market - BT for instance is marketing its VoIP services to BT Yahoo! subscribers (although seems to be biding its time before going mainstream). Scepticism aside, Skype seems to be going down well with Net users. It is currently offered in 15 languages and has nearly three million users from more than 165 countries, and claims 15 new user registrations per minute. ® Related stories VoIP will be US broadband killer app Skype won’t make it, says WSJ columnist
Lucy Sherriff, 23 Feb 2004

Sony adds a trio of Vaios

Reg Kit WatchReg Kit Watch Sony UK introduced a trio of notebooks today: the Vaio TR2MP ultra-portable and a pair of Z1X-series machines, the Z1XMP and the Z1XSP. All three are based on Intel's Centrino platform and consequently offer 802.11b/g WLAN connectivity. The TR2MP sports a 1GHz Ultra-low Voltage Pentium Ms, while the other two are equipped with beefier 1.5GHz and 1.7GHz PMs, respectively. The TR2MP is a 27 x 18.8 x 3.5cm, 1.4kg (3.1lb) model built to hold a 10.6in, 1280 x 768 widescreen display, yet it manages to squeeze in an optical drive - a DVD-ROM/CD-RW unit - and a 40GB hard drive. It ships with 512MB of 266MHz DDR SDRAM, 64MB of which is used by the i855GM's integrated Intel Extreme Graphics engine. Built into the screen, above the display, is a movable 640 x 480 digicam. In addition to Wi-Fi, the TR2MP supports Bluetooth connectivity, along with 56Kbps modem and 100Mbps Ethernet wired links. Both radios can be turned off using a special switch in the case to boost battery life, which Sony reckons can reach four hours and 43 minutes of operation. An extended life battery pack option can take that to just shy of eight hours. The Z1XSP and Z1XMP offer comparable four-hour-plus battery lives, but weigh rather more: 2.1kg (4.6lb). Bigger, they measure 31.6 x 24.7 x 3.9cm. Both offer 14.1in 1400 x 1050 displays powered by the dated 16MB ATI Mobility Radeon graphics chip. Each machine ships with 512MB of DDR SDRAM, but while the MP has a 60GB hard drive, the SP has an 80GB unit. The SP also offers a DVD-RW/CD-RW optical drive, whereas the MP features just a DVD-ROM/CD-RW unit. Like the TR2MP, the Z1XSP and MP offer Bluetooth wireless, and 56Kbps and 100Mbps wired connectivity. All three machines feature a pair of USB 2.0 ports, 1394 and a PC Card slot. The TR2MP ships next month at £1534 (excluding VAT). The Z1XMP and the Z1XSP are available today at £1449 and £1704, respectively. ®
Tony Smith, 23 Feb 2004

Click on this, you muthas

If hundreds of thousands of people are still blindly clicking on attachments in their email, is there any hope of mitigating the threat of hundreds of thousands of compromised systems with open backdoors? There's a myth that should be dispelled in the computer security world, and that is the belief that the growing and pervasive use of computers in the past twenty years has enabled the average person to become functionally computer literate. While most people know how to open a Microsoft Word document, read email and use a browser, far fewer know (or care) about what it takes to secure their computer. That's a major reason why so many hundreds of thousands of drones and bots exist and are under control of black hat folks. Your parents' computer could quite likely be "owned" right now, a compromised bot that's available for misuse by a large group of miscreants - and maybe you won't find out about it until the next time Mom and Dad invite you over for turkey dinner. The latest big email virus, MyDoom.A, was designed to stop spreading on 12 February, but it has already been mutated to keep it spreading for years. It its short life thus far it has infected hundreds of thousands of machines, perhaps even millions. There are backdoors into those infected systems now, listening on ports between 3127 to 3198. The backdoors have turned these systems into bots available for misuse by any miscreant. MyDoom was not particularly innovative but it was still an impressive demonstration for three reasons: it proved that millions of users are still clicking on virus attachments, its small 22,528 byte footprint is an accolade to efficient code, and most importantly, the mere inclusion of the virus inside of a .zip file was clearly enough for it to bypass many organization's anti-virus scans. Some have heralded MyDoom as the fastest spreading email virus of all time, yet email-bourne viruses have been with us for more than 15 years and there is no end in sight. Having compromised bots available to anyone who wants to use them, as we commonly see today, is part of the reason why massive DDOS attacks, open SPAM relays and open proxies are available to any pimple-faced kid. Click on this If you think MyDoom was effective at building a network of compromised bots, click on this: try a port knocking backdoor on for size. There are multitudes of backdoors out there that are far more sophisticated and stealthy than MyDoom, and port knocking is just one way of several to add a layer of control and stealth. I could send you one of these in email, enclosed in a .zip file, with the subject "hi" and text that reads something along the lines of, "please take a look at this and let me know your thoughts." While the typical SecurityFocus reader, and also the typical power user, would never click on such an attachment, we saw from MyDoom.A that hundreds of thousands of others will. The great disadvantage to the security community from viruses like MyDoom, besides the obvious waste of massive amounts of bandwidth and the soft cost of lost productivity by millions of users, is that the backdoors are available for exploit by any miscreant with half an ounce of knowledge about malicious scripts. Anyone mildly interested in making use of these backdoors for their own malformed intent can do so with a minimal amount of research. It shouldn't be so easy. Port knocking What is a port knocking backdoor? The concept is actually rather simple: it's a typical backdoor into a user's system, of which there are many, but it's one that effectively lays dormant and does not appear to be functioning or listening on any ports until an attacker "knocks" on the door using a special series of events to wake it up. Typical port scans from the Internet reveal nothing. A legitimate port knocking application would often parse firewall logs, waiting for a sequence of logged errors and then spring to life, manipulating firewall rules to open a port. A backdoor generally operates in a similar fashion, but can listen real-time with the need for a firewall. Generally, the process or daemon quietly listens for a sequence of pings (such a hitting ports 100, 109, 101, 101 three times in that sequence, a code of 911 that could be used to bring the backdoor to life), or by using packet type, such as sending SYN requests in a similar predetermined sequence. When the right series of knocks are received, the backdoor opens a TCP port and starts listening. Voila. Port knocking backdoors allow the virus writer to retain more control. Perhaps this is a good thing, as this would keep control of compromised systems in the hands of very few, instead of being open to misuse by any script junkie on the Internet. Having compromised bots available to anyone who wants to use them, as we commonly see today, is part of the reason why massive DDOS attacks, open SPAM relays and open proxies are available to any pimple-faced kid. So who's responsible? There is an excellent article from the New York Times by Clive Thompson that profiles several virus writers and clearly makes the distinction between the people who write the malicious code and the individuals who release it into the wild - it's argued that these two are often not the same. Some virus writers claim to write proof-of-concept code for educational purposes only, and then make it available for peer review. In contract, it is said that those who release that code into the wild often find it on a hacker website, and release it with pure malicious intent. The proof-of-concept defense is an interesting one for a bright, teenaged coder sitting in a dark basement in Singapore, but I am appalled at the lack of responsibility by otherwise clever people. I take issue with the virus writers who write stealthy, tight pieces of virus code that leave backdoors open on thousands of naked systems, available for exploit by any miscreant script-abuser on the Internet. Perhaps if the author of such malicious code took more responsibility for his actions, by not leaving the door wide open, compromised machines wouldn't be so readily available for misuse by people who barely understand how the backdoor even works. Port knocking is a legitimate security concept that has been discussed on Slashdot recently, and some virus writers have started using it "secure" their own backdoors. Add port knocking capabilities to a backdoor and you get a port knocking backdoor. The power to control these things would be held in the hands of an elite few, instead of any miscreant with malformed intent, as it is today. The anti-virus panacea? Most userland backdoors are still be easily discovered by anti-virus software - or not, as we saw with MyDoom.A where once again, simply enclosing the virus in a .zip file was surprisingly effective to avert a scan. Anti-virus applications are still the crutch required to keep Windows running, and when configured properly they work pretty well. However there is another level possible with backdoors that avert even the best anti-virus software - rootkits and DLL-injection hooks - but we have not yet seen the merger of virulent viruses and this even stealthier type of code. It's coming. For now, backdoors installed in corporate and other managed environment are still difficult to reach and control, as they sit within the confines of strong borders. A simple hardware router for the average home user would also do wonders to make most backdoors virtually inaccessible. Summing it up Malicious code is getting more sophisticated, but I can't help wondering at times to what end. The average home user is still double-clicking the virus attachments in his email, and we end up with backdoors into thousands of fully compromised home systems with every major virus. For our plight against the spread of common viruses in the wild, there is still no end in sight. If we cannot prevent the average user from double-clicking the latest virus in his email, how will we ever stop the propagation of more advanced, stealthy code? Copyright © 2004, Kelly Martin is the content editor for SecurityFocus.
Kelly Martin, 23 Feb 2004

Bradford IT strike off

A strike among IT workers in Bradford has been averted following the successful completion of "extensive negotiations" between the council and public sector union UNISON. Bradford Council's 100 or so IT staff were due to strike later this week over plans to privatise the authority's IT department. Workers were concerned that that any move to bring in private finance to run the IT department would put their jobs and terms of employment at risk. Now, though, workers have won assurances that staff will not be transferred to the eventual winner of the £100m, ten-year IT services contract to privatise the council's IT department. Instead, they will be seconded to whichever IT outfit wins the deal. A spokesman for UNISON said this was a "groundbreaking" deal that protects the rights and working condition of council staff. "This agreement has been secured at the eleventh hour after months of hard negotiation and removes the threat of privatisation. Had the strike gone ahead it would have left the council's services in turmoil," he said Confirming today's agreement, council leader Margaret Eaton, said: "We are very pleased that, following extensive negotiations between the council, trade unions and the bidders for the 'Bradford i' ICT contract, an agreement has been reached that has averted the threat of industrial action. "This agreement is not only good for staff but will also allow us to improve the service we provide to people across the Bradford district." ® Related Stories Bradford IT strike on hold Bradford IT staff vote to strike
Tim Richardson, 23 Feb 2004

Sun secures much-needed storage software help

Proving it has some measure of self-restraint, Sun Microsystems formed a partnership with AppIQ for storage management, declining to buy the company as it has with numerous small software makers. Sun is turning to AppIQ to help build out its N1 technology for managing software, servers and storage systems. The AppIQ software fits in the broad SRM (storage resource management) category and makes it easier for customers to manage hardware from various vendors via a single console. Sun will bundle the AppIQ software with its own storage management package by the second half of this year. This move deviates from the norm given Sun's penchant for acquiring start-ups of AppIQ's size. Over the past two years, Sun has purchased Terraspring, CenterRun, Pirus, Nauticus and Waveset to build out parts of its N1 "vision." Most of these buys, however, contributed to the server software side of the house. Sun maintains that it made more sense to partner for storage software because of costs and the nature of the market. AppIQ, like Veritas, is trying to act as the Switzerland of storage, supporting all vendors' hardware and software packages. Its software follows the SMI-S and CIM standards for storage management. AppIQ already has particularly strong ties to Hitachi, which is another benefit for Sun. The AppIQ StorageAuthority Suite plugs right into Hitachi's HighCommand software, and Sun resells Hitachi's high-end storage gear. Given this relationship and AppIQ's support for HP, IBM and EMC gear, it makes some sense for Sun to partner here. The company did, however, promise long ago that it would do its own work to create software for managing multivendor hardware, as part of N1. It seems that building out N1 has proved tougher than Sun first thought. In addition, many pundits doubted how open Sun could be in the storage realm. Partnering with AppIQ should help on both of these fronts, giving Sun product at quicker clip and proving Sun is taking the open route. ® Related Stories No storage vendor is braver than Sun Sun buys $200 million worth of an N1 vision Sun puts co-founder back to work
Ashlee Vance, 23 Feb 2004

SCO opens online IP store

The SCO Group has put up a convenient online shopping Web site where Linux users can scrub themselves clean in a jiffy. SCO last week covertly launched the IP Licenses store, allowing "customers" to purchase the right to use versions of Linux allegedly infected with Unix System V code. This site apparently caters to those Linux users who have not already been probed by SCO and who feel safer paying up now rather than waiting for the SCO/IBM case to go to court. At present, SCO still has the discounted $699 per processor rate going for a "Paid Up" IP license. Last year, SCO warned a single CPU license would end up costing users $1,399. A two CPU license costs $1,149, a four CPU license costs $2,499 and an eight CPU license costs $4,999. Any additional CPUs cost $749 each. Annual licenses are also available at discounted rates. What a bargain! Desktop users can also scrub their systems clean for $199 a pop. Given SCO's central concern with Unix SMP code put into Linux, this price seems a tad high. Visa, Mastercard, AmEx and even Discover cards are all accepted at the SCO IP Store. The company, however, is not offering refunds on purchases should the courts deny its claims. This begs the question: Why buy now? Away from its online IP shop, SCO is still busy mailing letters to large Linux users. One source at NASA sent us a letter detailing how the space monkeys plan to deal with SCO's demands. "Most of you have probably heard about the pending litigation between SCO and IBM. This was initiated by SCO alleging violation of intellectual property rights, one area of which is that certain versions of the Linux operating system violate SCO's rights in UNIX technology. SCO recently sent out a letter to approximately 3000 UNIX licensees, including our office, informing them of their claim. Code G is responding to SCO, simply acknowledging receipt of the letter. What we have been advised to do by Code G is identify any vendors from which we have purchased Linux licenses so that we can issue a letter to each vendor informing them of our receipt of the SCO letter. At this point we do NOT need numbers of licenses or any purchase costs. We are just looking to identify who we purchased Linux licenses from. If you've purchased through a third party, please identify them in addition to the OEM. Note: This action applies to licenses held by NASA. If your contractor has licenses in their name, then no need to report. However, if they are buying for NASA, and NASA holds the license, then they need to be reported." The NASA team could surely pull its attention away from Mars for a few minutes to fill their SCO shopping basket full of IP goodies. ® Related Stories Novell offers SCO last drink at System V saloon Worms pour through MyDoom back door US markets warm to Linux makers over SCO
Ashlee Vance, 23 Feb 2004