PictureTel buying MultiLink

Electronic News, April 21, 1997 by Sarah Cohen

In related news, PictureTel and Nippon Telegraph and Telephone Corp. (NTT) of Japan have furthered their 1995 desktop videoconferencing partnership by establishing NTT Phoenix Communications Network, Inc. (PCN), a joint-venture company specializing in providing multipoint videoconferencing services in Japan. This joint venture is intended to provide multipoint videoconferencing services using the NTT PCN multipoint videoconferencing network center. Dollar figures of the NTT PCN investment by either company were not disclosed, but a spokesman for PictureTel said that NTT, having a larger stake in the company, will choose NTT PCN's head staff member.

Under terms of the PictureTel/Multilink merger agreement, each share of MultiLink common stock will be exchanged for 0.56 of a share of PictureTel common stock. MultiLink shareholders will own approximately 10 percent and PictureTel shareholders will own approximately 90 percent of the combined company's shares. The future for MultiLink employees, including Bruce Bowers, MultiLink's CEO, has not yet been decided, said the PictureTel spokesman; MultiLink will be absorbed into PictureTel's Network Systems division, currently headed by PictureTel VP Bill Avery.

NTT PCN's headquarters will be in Tokyo, Japan. Board members and the management team will include representatives from both PictureTel and NTT. NTT will own approximately 44 percent of the company, while PictureTel will own approximately 20 percent.

The center is equipped with PictureTel's Montage multipoint conferencing servers, and will be linked with PictureTel network operations centers in the U.S., U.K. and Singapore in the near future, said PictureTel. NTT PCN will provide multipoint videoconferencing services for customers who use the global H.320 standard for ISDN-based calls. There are plans in the works for the new enterprise to expand its network support to include H.323 (local area network) and H.324 (analog or POTS) conferences, as well, said PictureTel.

"Videoconferencing is exploding in Japan," stated the PictureTel spokesman. "The Japanese use videoconferencing in creative ways--not just for traditional business uses, but for foreign language training, social services, health care. Often times, this requires videoconferencing at more than two sites. Combine that with the proliferation of ISDN lines in Japan, and Japan becomes very fertile ground for videoconferencing products."