Jul. TELECOMMUNICATIONS Mergers & AcquisitionsNorwegian telecommunications giant Telenor said that it has signed an agreement for acquiring communications firm Datametrix AS from technology

Mergers & Acquisitions

IGI Telecom Investment ResearchTELECOMMUNICATIONS

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In This Issue

Jul.Jul.Jul.Jul.Jul.20082008200820082008

TOP NEWS

China Telecom talking with foreign companies to fund itsacquisition of China Unicom’s CDMA operations

China Telecom said that it is holding talks with foreigninvestors for funding its plan of acquiring China Unicom’s CDMAbusiness, according to an AFP report. China Telecom’schairman, Wang Xiaochu, said that around four or five firmshave shown some interest in the offer. The report added thatthe potential partners include South Korea-based SK Telecom,Singapore Telecom, and CDMA technology pioneer Qualcomm.China Telecom had recently announced its decision to acquirethe CDMA assets of China Unicom. But the company apparentlyhas to pay nearly $16 billion for the acquisition.

Brazil approves Oi’s acquisition of BrTBrazilian telecommunications regulator Anatel has agreed

to change the country’s telecom norms by permitting a singletelecom group to own two operating licenses. This developmenthas cleared the way for Oi Participacoes’ (previously known asTelemar) planned purchase of its rival Brasil Telecom for $3.58billion. This acquisition needs approval from the Braziliangovernment. The regulator has declared that firms that ownlicenses in more than one area would need to provide nationwidetelecom services. It said that this move would force companiesto provide services in densely populated regions as well as theoft-neglected rural areas.

Brocade to buy FoundryBrocade announced a definitive agreement to purchase

Foundry Networks Inc., a performance and total solutionsprovider for network switching and routing. Brocade believesthat the acquisition will position the company as a leadingprovider of enterprise and service-provider networking solutions,with innovative technology and product leadership from theInternet to the heart of datacenters.

Belgacom offersEUR420 millionfor Interkabel .... 2

Belgacom eyesacquisitions worth$15.6 billion ...... 3

UTStarcomplans to sell itsMSBU ............... 4

Enablenceacquires DuPontPhotonics’ PLC-based assets .... 5

Opnext to acquireStrataLightCommunications6

Comstar buysUral Telephone..7

J:COM combinescable systems .. 8

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The acquisition will bring together twofinancially strong companies incomplementary technology sectors andallow the combined entity to better addresstoday’s customer needs, as well as theevolution toward converged networks.Brocade also believes that the combinedcompany will be well positioned to createunique synergies and to take advantage ofthe respective technologies, customersegments, and distribution channels of thetwo companies to accelerate growth andinnovation in key markets.

“Through this deal, Brocade has nowuniquely positioned itself in the networkingindustry to deliver a leading, alternativesolutions portfolio spanning local, metro,wide and storage area networks,” said ZeusKerravala, senior vice president of GlobalEnterprise Research at the Yankee Group.“The breadth and depth of this portfolio makeBrocade a viable option for customerslooking for complete networking solutionscapable of addressing their constantlyevolving and increasingly complex ITchallenges.”

CARRIERS

Belgacom offers EUR420 million forInterkabel

Belgacom has offered around$650.81 million for acquiring cable networkgroup Interkabel. This offer is nearly $108.47million more than what was offered by itsrival Telenet to the owners of Interkabel. Thisalso includes 40 percent more than whatTelenet agreed to shell out as the initialpayment $263.26 million. Interkabel coversthe cable services Inter-media, Integan,PBE, and WVEM, with about 800,000 users,in addition to a joint digital television platformnamed iNDI. Belgacom is currently biddingfor the analog as well as digital TV activitiesof the four cable television operators. It is

also seeking nonexclusive rights to provideTV services on their networks.

Belgacom contemplating acquiring Tele2Luxembourg

According to Belgian newspaper deTjid, Belgacom is contemplating acquiringTele2 Luxembourg. The daily added thatvarious other parties are also in the hunt foracquiring the second-biggest mobile serviceprovider in Luxembourg, including KPN.Tele2 Luxembourg, which has 238,000customers, provides fixed Internet andtelephony services in the city. In 2007,Belgaocm had submitted its bid to acquireLuxembourg operator Voxmobile, but it wasbeaten by Mobistar.

Taiwan cancels its plan of reducing itsstake in Chunghwa Telecom

According to a Dow Jones report,Taiwan’s Ministry of Finance has abandonedits plan of selling its stake in the country’sbiggest phone operator, Chunghwa Telecom,to raise $1.74 billion, and is nowcontemplating selling bonds to raise aportion of the funds. Earlier, the Taiwanesegovernment was planning to reduce its stakein the telecom operator to 30 percent from35.65 percent to raise $1.74 billion in orderto finance the $3.95 billion expenditureprogram to support domestic demand.However, certain lawmakers advised thegovernment against selling its stake inChunghwa Telecom, which creates gooddividend income.

Japan’s DoCoMo acquires 30 percent ofAktel for $50 million

Japanese mobile service providerNTT DoCoMo announced that it has decidedto acquire a 30 percent holding in TMInternational Bangladesh, which providestelecom services under the brand “Aktel.”The Japan-based mobile operator will buy

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all shares of the Bangladeshi companyowned by A.K. Khan for around $350 million.DoCoMo had recently made investments inMalaysia-based U-Mobile, also expressinginterest for the Philippines-based PLDT. Thisdeal is likely to be closed by this year’s end.

Belgacom eyes acquisitions worth $15.6billion

According to Didier Bellens, the chiefexecutive of telecoms group Belgacom SA,the group plans to make acquisitions valuedat EUR10 billion euros in the high-speedfixed-line Internet or convergence segments.He also said that the company did not ruleout the possibility of acquiring a mobileoperator. Mr. Bellens pointed out that thegroup is not a suitable acquisition target ofits contemporary, France Telecom SA,adding that he is keen to extend his contractwith Bellens for an additional five years.

Freenet invites declarations of interestsfor its broadband division

The board of Germany-basedtelecom Freenet has invited expressions ofinterest (EoIs) for its broadband division frominterested buyers. Freenet is being assistedby M&A consultants Arma Partners LLP inits endeavor. The first phase is likely towitness an initially nonbinding business sale.Freenet’s decision to sell its broadbanddivision is in line with its plan to become thebiggest mobile operator of Germany byacquiring Garman cellular operator Debitel.The total mobile user base of the two firmsis 19 million. Freenet had 1.19 million DSLusers by the end of March 2008, in additionto 2.56 million narrowband users.

Norwegian telecom group Telenor toacquire Datametrix for $44 million

Norwegian telecommunications giantTelenor said that it has signed an agreementfor acquiring communications firm

Datametrix AS from technology companyIgnis ASA group for around 26 million crowns($43.65 million). Datametrix is a provider ofIP (Internet Protocol)-based networks,communication, and datacenter systems, inaddition to IP technology. The company’sturnover reached $77.53 million last year.Telenor said that the acquisition wouldenable it to improve its position in theadvanced IP communications solutionssegment. The transaction will needclearance from the Norwegian CompetitionAuthority.

Qtel acquires ICLS and ICLM; gets 40.8percent stake in PT Indosat

Qatar Telecom (Qtel) said that it hasacquired Indonesia Communications Pte.Ltd. (ICLS) and Indonesia CommunicationsLimited (ICLM), which own a combined 40.8percent stake in PT Indosat Tbk (Indosat).Following the earlier share-acquisition dealwith STT Communications Ltd, the shareownership of ICLS and ICLM has beentransferred to Qtel from Asia Mobile HoldingsPte. Qtel believes that it will be required toprepare a tender offer to buy the outstandingstake of Indosat in order to comply withIndonesia’s mandatory tender offer norms.The Qatar-based company is in talks withthe Indonesian Capital Market and FinancialInstitution Supervisory Board (Bapepam-LK)over this issue. It will announce its futureplans only after concluding its talks withBapepam-LK.

Cable company UPC Austria acquired 15smaller networks

According to Broadband TV News,cable company UPC Austria has acquired15 small cable networks in the Upper Austria(Oberosterreich) region. The new networkswould be integrated into the UIPC networkto deliver triple-play services in the Europeancountry. These networks would provide UPC


Austria with around 27,000 new users, whichtake the total number of households servedto 741,000.

Belgacom buys Tele2 Luxembourg andLiechtenstein for $325.24 million

Belgium-based Belgacomannounced that it has bought Tele2Luxembourg, which operates as Tango.Tele2 Luxembourg currently provides fixed-voice, cellular, and DSL services inLuxembourg. It has 26,000 landline users,238,000 mobile customers, and 10,000broadband subscribers. Its EBITDA hadreached $48.71 million in 2007. Under theagreement, Belgacom would also take overTele2’s Liechtenstein mobile and landlineoperations. The firm has decided to buy 100percent shares of Tele2 Luxembourg foraround $325.24 million. Owing to its strongpresence in Luxembourg, Belgacom expectsto get synergies of close to $39.28 million.The deal awaits clearance from appropriateantitrust authorities.

WIRELESS

UTStarcom plans to sell its MSBUUTStarcom Inc. is contemplating

selling its Mobile Solutions Business Unit(MSBU) while retaining its Little Smartbusiness. Industry experts said that thereorganization in the telecom industry islikely to revive the struggling Little Smartbusiness since China Telecom will completean upgrade of the national-roaming LittleSmart network. UTStarcom’s mobilebusiness comprises IPCDMA (InternetProtocol code division multiple access) andwill be taken over by private equity companyOpenGate Capital. UTStarcom said that theMSBU will be known as Star Solutions.According to Peter Blackmore, UTStarcom’sCEO, this sale forms part of the company’sstrategy to capitalize on exciting

opportunities in IP technologies likebroadband and next-generation broadband.Meanwhile, UTStarcom China is maintainingits vigilance on the demand of its Little Smartbusiness.

Ericsson to enjoy capital gains of EUR75million by selling its stake in Symbian toNokia

Telecommunications equipmentvendor Ericsson has stated that it wouldenjoy capital gains of around $116.70 millionthrough the sale of its holding in softwarecompany Symbian to Nokia, the biggesthandset maker in the world. According toEricsson spokesman Tobias Gyhlenius, thecompany would get $205.40 million forselling its 15.6 percent holding in Symbian,adding that Ericsson would book the capitalgain in the third or fourth quarter of 2008.The deal awaits approval from relevantcompetition authorities.

FIBER OPTICS

TranSwitch to acquire CentilliumCommunications

TranSwitch Corp. has entered into adefinitive agreement to acquire CentilliumCommunications Inc. TranSwitch, providerof carrier-class semiconductor equipment forEthernet-over-SONET/SDH, broadbandaccess, and Carrier Ethernet applications,says the acquisition will further diversify itsproduct portfolio to include rapidly growingfiber-to-the-home and VoIP offerings.

The combination strengthensTranSwitch’s position in the next-generationcommunications semiconductor market, saycompany representatives. They claim thecombined companies will have greater scale,a significantly improved expense structure,and a truly global reach. Management ofTranSwitch has identified approximately$10.5 million of annual expense savings and


expects the transaction to be accretive toearnings in the first full quarter after closingand significantly accretive in 2009.

Per the agreement, TranSwitch willissue an aggregate of 25 million shares ofcommon stock and $15 million, which willbe allocated pro rata among holders ofCentillium common stock and vested, in-the-money, stock options outstanding at theclosing of the merger. Based on Centillium’scapitalization as of July 9, 2009, Centilliumshareholders would receive 0.5958 sharesof TranSwitch common stock and $0.36 incash for each share of Centillium commonstock. Based on TranSwitch’s closing shareprice on July 9, 2008, the total considerationvalues Centillium at $42.8 million, orapproximately $1.02 per share on a fullydiluted basis. Centillium shareholders willown approximately 16 percent of thecombined company.

“We are delighted to welcomeCentillium’s customers, employees, andshareholders to join the TranSwitch team,”contended Dr. Santanu Das, CEO ofTranSwitch. “Centillium has a large numberof important customers, including Alcatel-Lucent, OKI, Samsung, ZTE, and Tellabs.Their products have won significant industryrecognition, and their Mustang chip iscurrently being used in OKI’s ONU platform,which is part of NTT’s EPON-based FTTHdeployment. We are particularly excitedabout Centillium’s second recent design winin the FTTH platform of a second prominentsupplier for this deployment,” he noted. “Thisplatform is currently being qualified, and weanticipate a ramp in early 2009. TheJapanese government has made a majorcommitment to rolling out FTTH, and NTT’sgoal is to reach 20 million homes by 2010.This represents a major revenue opportunityfor the company.

“This combination further strengthensTranSwitch’s position in the platforms of Tier-

1 equipment suppliers with contracts atcarriers that have made significant financialcommitments to upgrade their currentinfrastructures,” Das continued. “Thesecontracts include carriers in the UK, Korea,China, India, and now Japan. We believethat as these deployments begin to ramp involume, the combined company has thepotential to significantly increase its revenuein 2009. As a larger company, we will enjoya significantly better expense structure aswell as stronger relationships with bothcustomers and suppliers.”

“We are very pleased to be joining theTranSwitch team,” added Faraj Aalaei, co-founder and CEO of Centillium, who will alsoserve on TranSwitch’s board upon closingof the transaction. “Consolidation in thecommunications industry is both good andnecessary, and the combined company willbe significantly stronger and more profitablethan either one by itself.”

The boards of directors of bothcompanies have unanimously approved thetransaction, which is subject to customaryclosing conditions, including the approval ofCentillium’s shareholders. The transactionis expected to close in the fourth quarter of2008. Upon completion of the transaction,TranSwitch will have approximately 158million fully diluted shares outstanding, withcurrent TranSwitch shareholders owningapproximately 84 percent and currentCentillium shareholders owningapproximately 16 percent of the combinedcompany’s shares.

Enablence acquires DuPont Photonics’PLC-based assets

Enablence Technologies, a supplierof fiber-to-the-home (FTTH) equipment fortriple-play residential and business servicesand optical components and subsystems foraccess, metro, and long-haul markets,announced that it has signed a definitive


Asset Purchase Agreement with DuPontPhotonics Technologies LLC, a whollyowned subsidiary of DuPont, to acquirecertain assets of DuPont Photonics basedin the Boston suburb of Wilimington,Massachusetts, subject to certain approvals,conditions, and consents. Concurrent withthe agreement, DuPont will make a cashinvestment in Enablence.

Per the agreement, Enablence willissue common shares equivalent to $9.5million based on a 30-day average shareprice prior to the closing of the transactionfor the assets and the investment. All sharesissued will be subject to the statutory 120days hold period. The conditions areexpected to be satisfied on or before July24, 2008.

DuPont Photonics has developed aswitching fabric using planar lightwavecircuits (PLCs) that enable such devices asintegrated reconfigurable optical add/dropmultiplexers (ROADMs); 1xN, MxN, and NxNswitches; and variable optical attenuators.All the intellectual property and associatedknow-how will be transferred to Enablenceunder the terms of the agreement.

“DuPont Photonics’ product portfoliois complementary to our current componentand subsystems offerings and is consistentwith our vertical integration strategy thatallows us to build on our core technologystrength with higher value added products,”explained Arvind Chhatbar, CEO ofEnablence.

“Our acquisitions allow us to focuson capturing innovative products andtechnologies that will help us solidify ourPlanar Lightwave Circuit (PLC) leadershipposition in the access, metro, and long haulmarkets. We are also pleased with theinvestment DuPont is making in Enablence,which will permit us to continue to build onthe product portfolio we are acquiring fromDuPont,” he added.

Enablence also announced that it hasmade changes to its corporate structure andmanagement team to expedite theintegration of DuPont Photonics and otherrecent acquisitions. DuPont Photonics, AlbisOptoelectronics, and ANDevices will nowform the Optical Components andSubsystems Division of the corporation andbe headed by Dr. Jacob Sun, who waspreviously the CEO of ANDevices. He willcontinue in his role as chief operating officerof Enablence and serve as president ofEnablence’s new Optical Components andSubsystems Division. Peter Cairoli, thepresident of Enablence’s AlbisOptoelectronics, will now head Enablence’sEuropean operations to assist in streamliningthe corporation’s operations in that region.

Dan Hilton, the current vice presidentof finance and administration, has beengiven additional new responsibilities assenior vice president for corporatedevelopment and administration and willlead Enablence’s integration efforts relatedto recent mergers and acquisitions. RonaldI. Benn, a Chartered Accountant with severalyears experience as CFO in several publiclytraded and private companies, has beenappointed as vice president of finance, takingover the finance function.

Tom Tighe, the former CEO of Wave7 Optics, will lead Enablence’s efforts inbuilding our FTTx global deployments in hiscapacity as president of Enablence’s newFTTx Networks Division.

Opnext to acquire StrataLightCommunications

Opnext Inc. announced that it hasreached a definitive agreement to acquireprivately held StrataLight CommunicationsInc.

StrataLight Communications designs,develops, and manufactures 40Gbps line-side optical subsystems and advanced


dispersion compensation modules for thecommunications industry. The companysays it has shipped more than 2,500 unitsto its customers, which include many of theworld’s largest communications equipmentmanufacturers.

StrataLight’s subsystems, togetherwith the optical systems of its customers, arewidely deployed in several of the world’slargest Tier 1 service provider networks,claim company representatives.

“Through this acquisition, Opnext willprovide a complete 40G solution, which webelieve will make us the market leader in40G,” contended Harry Bosco, president andCEO of Opnext. “Opnext is known for oneof the most comprehensive and bestperforming product portfolios in themarketplace and now, by incorporatingStrataLight’s leading 40G line-side productsinto our portfolio, we will be able to addressboth the line- and client-sides, significantlyexpanding our addressable market,” hereports.

“The combined expertise andtechnologies of Opnext’s client-side andStrataLight’s line-side products will positionOpnext to address current and future 40Gapplications as well as the emerging 100Gapplications.”

“With its industry-leading technologyand solid customer base, StrataLight is wellpositioned as the leader in commercialdeployment of 40G optical transmissionsubsystems,” added Shri Dodani, presidentand CEO of StrataLight Communications.“Together with Opnext, we will be positionedto lead in high-growth and strategicsegments of the market, leveraging Opnext’sstrength in module development,complementary product portfolio, and proventrack record of delivering qualitycomponents.”

As per the agreement, which hasbeen approved by the boards of directors of

both companies, Opnext will acquireStrataLight Communications for a totalconsideration of approximately 26.55 millioncommon shares and $30 million in cash.Based on Opnext’s closing share price of$5.35 on July 8, 2008, this represents a valueof approximately $172 million.

Upon completion of the acquisition,StrataLight Communications’ shareholderswill own approximately 29 percent of thecombined company.

The completion of the proposedmerger is subject to the satisfaction ofcustomary closing conditions, including theapproval of the stockholders of Opnext andStrataLight and the receipt of requiredregulatory approval.

Under separate agreements, thesignificant stockholders of Opnext andStrataLight holding a sufficient number ofshares to approve the transaction haveagreed to vote in favor of the transaction.The combination is expected to close in thefourth calendar quarter of 2008.

Comstar buys Ural Telephone“Comstar — United TeleSystems JSC, an

integrated telecommunications operator inRussia and the CIS, announced theacquisition of a 100 percent stake in LLCStrategy, the owner of 100 percent of theshare capital of CJSC Ural TelephoneCompany (UTC), the No. 1 alternativetelecommunications operator inEkaterinburg and the Sverdlovsk region, fora total cash consideration of RUB 1.015billion (approximately US$43.4 million). Thecompany was acquired from individuals.

UTC is the leading player in thealternative fixed-line communications marketin Ekaterinburg and the Sverdlovsk region.The operator provides local and zonalconnection services, as well as broadbandInternet access based on ADSL and Ethernettechnologies, for residential and corporate


subscribers. The services are supported bythe fully digital connection network.

UTC owns 800 kilometers of its ownfiber-optic connection network, whichcurrently covers most of the territory ofEkaterinburg as well as the largest towns ofthe Sverdlovsk region. The company hasover 4,000 points of presence in theSverdlovsk region. UTC has a numberingcapacity of 150,000 telephone numbers inEkaterinburg, of which 61,000 are installednumbers.

The company also has 13,000telephone numbers in the other towns of theSverdlovsk region, of which 5,500 areinstalled numbers.

The company has a modern technicalinfrastructure and allows for expanding theoperations without significant additionalinvestments.

UTC services more than 50,000telephone numbers, with about half of thesenumbers being provided to corporatesubscribers.

The company reported revenues ofUS$20.7 million, up by 43 percent year-on-year, with EBITDA of US$4.73 million andan EBITDA margin of 23 percent, as ofDecember 31, 2007. The company’s net debtamounted to US$5.1 million at the time ofsigning the contract.

Sergey Pridantsev, president andchief executive officer of Comstar UTS,commented,

“We have acquired one of the leadingalternative operators in Russia in line withthe Group’s regional development strategy.The acquisition of UTC allowed us tosignificantly expand our presence in thetelecommunications market of the UralFederal District, where we are alreadyoperating in the Tyumen region, the Khanty-Mansi and the Yamalo-Nenets AutonomousAreas. Ekaterinburg is one of the largest andmost economically developed cities in

Russia, and we are entering this market asa leading player among alternativetelecommunications operators.”

J:COM combines cable systemsJupiter Telecommunications Co. Ltd.,

the largest multiple system operator (MSO)in Japan based on the number of customersserved, has announced that the FukuokaCable Network Co. Ltd., one of the Groupcompanies of J:COM, will merge with CableVision 21 Inc., a subsidiary company ofJ:COM as of September 1, 2008.

NEC, Sumitomo Electric to acquiresubmarine cable manufacturer

NEC Corp. and Sumitomo ElectricIndustries, Ltd have announced theacquisition of OCC Holdings and itssubsidiary OCC Corp., which manufacturesfiber-optic submarine cables.

NEC and Sumitomo Electric willacquire 100 percent ownership of OCCHoldings from an investment fund managedby the Longreach Group. NEC will holdapproximately 75 percent and SumitomoElectric will hold approximately 25 percentof OCC Holdings. The acquisition isscheduled to be completed in July 2008.

“The need for broadband capacity israpidly expanding on a global scale. In orderto accommodate the growing worldwidedemand, a broad range of new submarinecable systems are being planned and built.This acquisition represents a strategicadvancement for NEC, one of the leadingsuppliers of submarine cable systems, andSumitomo Electric, a leading supplier ofoptical products, that secures stable accessto a rich source of high quality; highly reliableoptical submarine cables. NEC is pleasedto announce the acquisition of OCC, whichassures the company of maintaining adynamic leading presence in underseaindustries, and promises to solidify each


company’s market position,” said MasamichiImai, executive general manager of theBroadband Networks Operations Unit ofNEC.

“With the acquisition of OCC todayby NEC and Sumitomo Electric, we aim tofirmly establish our presence in the marketof optical components and materials for thesubmarine fiber-optic network constructionindustry that is forecast to grow,” said Dr.Shigeru Tanaka, managing director ofSumitomo Electric Industries, Ltd.

AFL Network Services announces NorthStar acquisition

AFL Network Services Inc. isexpanding its telecommunications servicesbusiness with the acquisition of the assetsand related business of North StarCommunications Group Inc., currentlyheadquartered in Birmingham, Alabama.The acquisition not only develops AFL’sfootprint into Alabama, Mississippi,California, and Nevada, but also enhancesits service offering with North Star’s expertisein outside plant engineering, say AFLrepresentatives.

“North Star complements our existingbusiness very well,” noted Mike Booth,executive vice president of AFL NetworkServices.

“Their skills in outside plantengineering and wireless services, togetherwith the enhanced footprint, provide thecapability for us to continue growing.Furthermore, we both share a strongcommitment to quality and service.”

With the addition of North Star’s fullscope of capabilities, including engineering,network operations and maintenance,construction management, cable broadbandand wireless, and expertise in outside plantdistribution design and route feasibilitystudies, AFL Network Services says it has acomplete array of experienced professionals

along with products and services designedto meet unique networking needs.

Finisar/Optium approvedFinisar Corporation and Optium

Corporation announced that the USDepartment of Justice and Federal TradeCommission have granted Finisar earlytermination of the Hart-Scott-Rodino (HSR)waiting period in conjunction with theproposed combination of the two companies.The merger remains subject to satisfactionof other conditions, including approval of thestockholders of both Finisar and Optium.

On May 16, 2008, Finisar and Optiumjointly announced that they had entered intoa definitive agreement under which the twocompanies will be combined through an all-stock merger, creating the world’s largestsupplier of optical components, modules,and subsystems for the communicationsindustry. The combined company will takeadvantage of Finisar’s leadership position inthe storage and data networking industriesand Optium’s leadership position in thetelecommunications and CATV industries.

On June 30, 2008, Finisar filed withthe Securities and Exchange Commissionits annual report on Form 10-K for its fiscalyear ended April 30, 2008. Finisar expectsto file with the SEC a registration statementon Form S-4 containing a Joint ProxyStatement/Prospectus relating to theproposed combination within approximatelythe next two weeks, and Optium plans tosimultaneously file with the SEC the sameJoint Proxy Statement/Prospectus.

Avanex approves reverse splitAvanex Corporation, a provider of

telecommunication components that enablenext-generation optical networks,announced that its board of directors,pursuant to previously obtained stockholderauthorization, approved a reverse split of its


common stock at a ratio of 15-for-1, with aplanned effective date of August 12, 2008.Accordingly, as of the effective date, each15 shares of issued and outstandingcommon stock and equivalents will beconverted into one share of common stock.The reverse stock split will be effected bythe filing of a Certificate of Amendment tothe company’s Certificate of Incorporationwith the Secretary of State of the State ofDelaware.

“Avanex is taking this action toencourage interest in our stock on the partof certain brokerage houses and institutionalinvestors and to be in a better position tocontinue to meet the listing criteria for tradingon the Nasdaq Stock Market,” said GiovanniBarbarossa, the company’s interim CEO.“Following the reverse split, our stock willlikely trade at a higher nominal price level,”said Barbarossa.

CommScope consolidatesCommScope Inc., a provider of

infrastructure solutions for communicationsnetworks, has initiated plans to furtheroptimize its global manufacturing network aspart of the company’s goal to take betteradvantage of facilities, reduce costs, andenhance its long-term competitive positionin markets around the world.

In separate actions, CommScopeexpects to consolidate certain antenna andcable production within its Antenna, Cableand Cabinet Group and Enterprise segmentsinto other existing facilities.

The changes as proposed, some ofwhich are subject to employee consultationprocesses, would affect the followingfacilities:

- England: Microwave antennaoperations at three locations in the Stratfordarea would be shifted to existing Andrewantenna manufacturing facilities oroutsourced. This would result in closure of

the Stratford, Bidford, and Long Marstonlocations.

- Czech Republic: Base stationantenna production in Brno would bediscontinued and moved to existing Andrewantenna plants or outsourced. In addition,the connector, cable, and accessoryassembly operations in Brno are underconsideration for relocation to other Andrewlocations or outsourcing. Other operationsin Brno would not be affected.

- Australia: Enterprise cablingoperations in Brisbane will be discontinuedby early 2009, with production moved toother CommScope facilities.

- Scotland: Machine shopoperations in Lochgelly would beconsolidated into other Andrew facilities oroutsourced. Cable reroll processes andsome support functions also are beingreviewed. Other operations in Lochgellywould not be affected.

The proposed changes are expectedto result in a net reduction of at least 85employees across the company. In total,more than 700 existing jobs could be affectedby these planned actions, with the majorityof these positions potentially relocated toother existing company locations.

“We regret that many of our peoplemay be impacted. However, we can betterserve and secure the long-term interests ofour global employee population, as well asour customers and shareholders, byreducing costs whenever possible andimproving utilization of our extensivecapabilities in response to regional marketdemand,” said Brian Garrett, CommScopepresident and chief operating officer.“Combined with our previously announcedactions that affected manufacturing locationsin Belgium, Brazil and Italy, these proposedmoves are expected to enable CommScopeto have a much more highly efficient andproperly utilized manufacturing footprint


around the world. We remain committed toglobal competitiveness and excellence ineverything we do, especially servingcustomers.”

GIMV plans purchase of Nokia SiemensNetworks’ OTN (Open Transport Network)business

Nokia Siemens Networks, and GIMV,a Belgian investment company specializingin private equity and venture capital, areplanning to conclude an asset sale andtransfer agreement pertaining to NokiaSiemens Networks’ entire Open TransportNetwork (OTN) team during the secondquarter of 2008. The planned transfer issubject to an information and consultationprocess with the works council according tolocal legal practice and final agreement byboth companies. Upon the closing of thetransaction, expected to take place in thesecond quarter of 2008, Nokia SiemensNetworks and GIMV will transfer the OTNteam of approximately 80 people into a newlyformed company owned in majority by GIMV.OTN management and employees will begiven the opportunity to participate in the to-be-established company. The plannedtransfer will include key functions in R&D,manufacturing, sales, technical support,finance, and product and programmanagement.

INDIA

Etisalat pulls out of Tata Teleservicesstake talks

Emirates TelecommunicationsCorporation (Etisalat), which is one of thelargest telecom operators in West Asia, haswithdrawn from talks for acquiring a 9.7percent stake owned by business tycoon CSivasankaran in CDMA mobile operator TataTeleservices (TTSL). The UAE-basedtelecom player, which plans to venture into

the Indian telecom sector, has initiatedacquisition-related talks with various telecomplayers, including Essar-controlled LoopTelecom and Videocon Group-backedDatacom Solutions. Etisalat had eveninitiated talks with real-estate developerUnitech, which recently won a license toprovide GSM services in India. However, allits talks failed to develop. The firm’s decisionto pull out from the talks with TTSL comesafter the companies could not reach anagreement on the final price. Media reportssuggest that Sivasankaran was keen to get$1.87-$2.33 per share for his stake in thefirm, a price which was unacceptable toEtisalat.

Bharti says it is up to MTN to decideabout the resumption of merger talks

India’s largest private telecom serviceprovider, Bharti Airtel, has said that is up toSouth Africa-based telecom firm MTN todecide if it wishes to resume its merger-related talks with the Indian mobile player.Bharti Airtel joint MD Akhil Gupta stated thatthe company does not wish to comment onmere speculations, as any concretedevelopment has yet to take place. Lastweek, MTN and India’s second-biggesttelecom operator, RelianceCommunications, had called off their talksdue to the impending threat of regulatory andlegal hurdles. Prior to that, Bharti hadscrapped its talks with MTN owing todisagreements over issues includingownership control.

Telecom infrastructure services providerNu Tek India to launch an IPO on July 29

Indian telecommunicationsinfrastructure provider Nu Tek India, whichprovides infrastructure rollout solutions tofixed as well as mobile networks, is planningto launch an initial public offering (IPO) of4,500,000 equity shares on July 29. The IPO


consists of a new issue of 3.5 million equityshares in addition to a sale offer of 1 millionshares from a “strategic” investor. Thecompany has fixed the price band between$4.04 and $4.56 per share.

The issue, which would close onAugust 1, 2008, has been given an IPOgrade of 3/5 by CRISIL Ltd., a rating agency.Nu Tek India would use the yields from thisIPO to fund its capital expenditure andforeign buyout plans.

The proceeds would also be used toboost its long-term working capital needs.Nu Tek India provides a diverse range ofservices in the telecommunicationsinfrastructure domain. It provides its servicesto telecommunications operators,telecommunications equipment makers, andalso other third-party infrastructure-leasingfirms.

Government plans to review the normson telecom mergers and acquisitions

The Department of Telecom (DoT)plans to have another look at the newguidelines on the telecom sector that werenotified in April 2008.

The government is looking to comeup with norms that prevent startup firms frombeing sold out within a particular time framein order to deal with non-serious telecomplayers.

Unlike incumbent players, which haveto bear with a three-year lock-in period, newentrants can freely sell a dominant stake intheir firms at any point in time. In April 2008,the DoT had stated that an operator needsto complete at least three years in a servicearea before it can be acquired or can bemerged with another operator. But thesecurbs are not applicable on new players likeUnitech, Datacom, Swan, and LoopTelecom.

In this context, incumbent operatorshad argued that the norms would allow

startup firms to easily make a lot of moneyby selling a dominant stake. Furthermore,the DoT is planning to bring about a degreeof transparency on assessing spectrumenhancement and transfer chargers, whichwould be applied on new and currentoperators alike. DoT had preciously statedthat after a merger, the new entity wouldhave to surrender excess spectrum withinthree months’ time, following which the ratesfor excess radio frequencies would bedoubled after every three months.

Hutchison submits document to SEC toinform it about the possible tax liability

Hutchison TelecommunicationsInternational has submitted a document tothe US Securities and ExchangeCommission (SEC), admitting that it couldface a tax liability arising from the sale ofHutch-Essar to Vodafone in a deal worth $11billion. Hutchison has said that the taxpenalty would adversely affect its financialhealth while asserting that it is not obligatedto pay any tax in India.

Vodafone, which had acquired HutchEssar from HTIL, faces a tax liability to thetune of $2 billion in the country. The UK-based company has already filed a caseagainst the Income Tax departmentchallenging the latter’s notice sent to thetelecom giant.

The I-T Department believes thatVodafone is liable to pay capital gains tax inIndia, as the profit was generated in thecountry. Hutchison’s document filed with theSEC states that although the companybelieves it is not obligated to pay any taxesin India, it is fairly unsure about the eventualoutcome.

MTN says it is not holding talks withBharti

South Africa-based MTN Group hasasserted that it has not initiated any talks


with India’s largest mobile operator, BhartiAirtel, adding that its talks with RelianceCommunications (RCom) are very much on.MTN spokeswoman Nozipho January-Bardilldismissed media speculation that suggestedthat MTN had made new advances to Bharti.Richard Hurst, a telecommunications analystat IDC, believes that MTN is unlikely torestart its merger talks with Bharti. He addedthat MTN would do well to continue itscurrent talks with RCom.

MTN Group reportedly in talks with BhartiAccording to media reports, South

African telecom group MTN has restarted itsmerger-related talks with India’s largestmobile operator, Bharti Airtel, as its proposeddeal with Reliance Communications (RCom)was impeded by the ROFR (rights of firstrefusal) made by Reliance Industries.Although the development has not beenofficially confirmed, South African mediareports suggest that these rumors do holdmerit.

A South African newspaper, TheTimes, said that MTN could be interested inpursuing the less-controversial deal withBharti Airtel. Meanwhile, other newspapersaid that the South African firm is planningto explore business opportunities in othernations.

Maxis, Siva Ventures go for arbitrationover Maxis’s sale stake in Aircel to AT&T

According to media reports, MaxisCommunications and C Sivasankaran havedecided to adopt the arbitration route overMaxis’s stake sale in Indian telecom operatorAircel to US-based telecom giant AT&T.Maxis has denied such reports and said thatit has even given an undertaking to JusticeChitra Venkataraman (Madras High Court)that it would not sell the holding to any party.Earlier, Siva Ventures had accused Maxisof violating the shareholders agreement and

commencing stake sale discussions beforethe expiry of the stipulated period.

Idea buys 281.5 million shares of Spicefor Rs 77.3 per share

Aditya Birla group company IdeaCellular has bought around 281.5 millionshares of Spice Communications at $1.78each, which amounts to a total of $501.70million, in a block transaction on the BSE(Bombay Stock Exchange).

On June 25, Idea Cellular hadannounced its decision to acquire a 40.8percent stake in the Spice Group for$4626.26 million. India’s fifth-biggest mobileoperator has also launched an open offer toSpice’s stakeholders for buying another 20percent stale in the telecom company for$245.93 million.

This open offer would start on August22 and end on September 11. This deal withSpice will increase Idea’s market share to11.1 percent and would also get it spectrumon the 900MHz band.

Future of MTN’s deal with RCom remainsuncertain

All eyes are now on South Africantelecom major MTN as its 45-day exclusivityagreement with Indian telecommunicationsservice provider Reliance Communicationsexpired early this week.

The prevailing uncertainlysurrounding the proposed merger betweenthe two telecom companies has fuellednumerous speculations about the future ofthe deal. Some media reports suggest thatMTN is set to withdraw from this deal, whileothers believe that the company mayapproach other investors.

Unconfirmed reports stated thatReliance Industries (RIL) and Bharti Airtelestablished contact with MTN. RCom did notmake any official comment at the deadline,which is contradictory to its earlier statement


that it would keep its shareholders updatedabout the developments on this matter. MTNplanned to hold a board meeting onThursday.

BUSINESS

General Dynamics InformationTechnology to acquire ViPS Inc.

General Dynamics entered into adefinitive agreement to acquire ViPS Inc., awholly owned subsidiary of HLTHCorporation, for approximately $225 million.The transaction, which has been approvedby the boards of directors at GeneralDynamics and at HLTH, is subject to normalregulatory approvals and is expected toclose in 2008. ViPS will become part of theGeneral Dynamics Information Technologybusiness unit. Headquartered in Towson,Md., ViPS is a provider of high-endhealthcare technology solutions, includingdata management, analytics, decisionsupport, and process automation thatsupport both federal agencies andcommercial healthcare organizations. ViPSis a key services provider in supporting CMSand private payers’ efforts to reducehealthcare costs and claims fraud, increasecustomer satisfaction, and improve patientoutcomes. The company has extensivecredentials in application development andintegration, including information assuranceand security. ViPS has approximately 600employees.

Nokia receives EC merger controlapproval for the acquisition of Trolltech

The European Commissionannounced that it has unconditionallyapproved Nokia’s voluntary tender offer forall the shares in Trolltech ASA. Nokia willnow proceed with the consummation of theoffer. Settlement for the shares tendered inthe offer is expected to take place on June

6, 2008. In accordance with section 3.9 ofthe offer document, Nokia has determinedthat the tendered shares shall be acquiredby its wholly owned subsidiary, Nokia NorgeAS. Following the completion of the offer,Nokia owns 52,411,283 shares and votes inTrolltech, representing 99.4 percent of all theshares outstanding in Trolltech.

Nokia to acquire social-activity serviceprovider Plazes

Nokia and Plazes announced anagreement for Nokia to acquire substantiallyall assets of Plazes, a privately ownedstartup company of 13 people with itsprincipal operations in Berlin. Plazesprovides a context-aware social-activityservice that people can use to plan, record,and share their social activities, includingwhy they are at a given location at a giventime, whether in the past, present, or future.“This acquisition helps Nokia to accelerateits vision of bringing people and places closertogether, in line with our broader servicesstrategy,” said Niklas Savander, head ofNokia Services & Software. “In addition tothe key assets, through this acquisition Nokiawill bring on a visionary team with anadvanced understanding of social-activityservices, as well as the technical ability tofurther develop this area.”

Digiweb eyeing some more acquisitionsto expand locally and internationally

According to siliconrepublic.com,Ireland-based broadband/telecom operatorDigiweb said that it is eyeing additionalstrategic acquisitions to expand its businessdomestically as well as internationally.Digiweb CEO Colm Piercy stated that thecompany, which had acquired hostingcompany Vovara in April 2008, is planningto acquire some more companies in thevoice, hosting, and broadband segments. Hesaid that Digiweb’s broadband wireless


network, which currently covers 65 percentof Ireland, is being expanded steadily. Thecompany’s mobile network is also expectedto cover 83 percent of the union by the endof 2009. Digiweb owns licenses top providewireless services in Finland, Iceland, the UK,and Norway.

MARKET INTELLIGENCE

America’s Growth Capital PublishesSummer 2008 Capital MarketsPerspective

The Boston-based investmentbanking firm America’s Growth Capital hasjust published its Summer 2008 M&A andequity capital markets review, includingoverviews of the M&A, IPO, PIPE andPrivate Placement landscapes, with detailedanalyses of the technology sector.

OverviewThe U.S. equity markets continue to

gyrate around 12 month lows, with both theNASDAQ (14%) and Dow (19%) down in thelast twelve months. Lingering sub-primeinstability, a 55% increase in inflation, a 52%drop in consumer confidence, and the risingcost of energy have affected the corporatelandscape immensely.

Nowhere is this more evident than inthis year’s IPO market; with only 55 dealsexpected for 2008, IPO activity is projectedto drop 76% from 2007 (a 90% drop fortechnology IPOs). The M&A market has alsoexperienced a sharp decline with a 29% dropin the number of transactions (down 26%for technology transactions).

M&AAn estimated 1,304 M&A deals are

projected for 2008 – a 29% decrease fromthe 1,840 deals announced in 2007.Technology transactions have seen a similardecline, projecting a drop of 26% in 2008with an estimated 234 transactions (318completed in 2007).

One-day M&A premiums have risento 37% for all public technology-relatedtransactions in 2008 compared to 21% in2007. Furthermore, public technologycompanies are selling at significantly lowervalues (1.9x revenue) than privatecompanies (3.8x revenue). Large capstrategic buyers have started to becomemore acquisitive, but most of the activity thusfar in 2008 has been generated by small andmid-cap public and private companies andbuyout firms. The substantial amount ofprivate equity capital still to be put to work isexpected to continue to aid the M&A marketthrough 2H08.

IPOsFollowing a strong fourth quarter in

2007 (72 pricings), the IPO market hasevaporated in 2008. A mere 55 IPOs areexpected to price this year, compared to 233in 2007. YTD, the number of pricings is down76% from the same time last year. Visa isthe bright spot in the IPO market, postingaftermarket performance 64%. Overall,2008 IPOs are down 5%, which is animprovement from the negative 26%aftermarket performance of 2007 IPOs. Thetechnology industry is on pace for 6 IPOpricings, compared to 60 in 2007. Fifty-fivetechnology companies are in activeregistration awaiting market improvementsbefore pricing. Skittish investors, astruggling economy, election-year politicaluncertainty, and the credit crunch/mortgagecrisis are to blame for the market’s currentvolatility.

Private Placements/PIPEsDue to the longer term nature of the

venture capital market and the enormousamount of cash in venture funds across theglobe, venture capital investing has held upthe best and is down only 7.5% for U.S.technology companies. There have been1,363 information technology privateplacements in 2008 verses 1,473 in 2007.


While AGC’s private placement business isgoing strong, we see both the venture andprivate equity funds being more selective,more disciplined on pricing and relentless indue diligence.

The number of monthly PIPE dealshas fallen 33% from 2007. The 2008 PIPEmarket has averaged 134 deals a month,while 2007’s averaged 200 a month. Duringthe first two quarters of 2008, there has beena shift away from emerging and illiquidcompanies to more liquid and cash flowpositive companies, resulting in a plunge of39% in small PIPE deals. Statistics

demonstrate that many top investors havestopped investing in smaller more riskyPIPEs altogether. On a bright note, financialservices and telecommunicationscompanies lead the pack for PIPE deals,raising over $70 billion. In the US market,almost 80% of the total value of PIPE dealsare represented by financial services. Themedian market cap for technology PIPEs in2008 is projected to be $42 million, which isdown from $50 million in 2007. Incomparison, the healthcare sector has hada median deal size of $55 million. For moreinformation, visit www.americasgc.com.

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Jul. TELECOMMUNICATIONS Mergers & AcquisitionsNorwegian telecommunications giant Telenor said that it has signed an agreement for acquiring communications firm Datametrix AS from technology