News

Putting the World in WorldGate

6/13/1999 8:00 PM Eastern

Buoyed by agreements from 19 international cable operators
to try or deploy its Internet-over-TV service, WorldGate Communications Inc. executives
are casting a bullish eye on future growth abroad.

WorldGate CEO Hal Krisbergh predicts international markets
could grow to represent as much as 50 percent of the company's sales.

And with the agreements, announced last month, the company
appears to be well on its way to achieving the domestic/international sales ratio. Joel
Achramowicz, an analyst with Preferred Capital Markets Inc., in San Francisco, said the 19
international cable operators have a total of 2 million subscribers, while WorldGate's
agreements with U.S. cable operators encompass about 5 million subscribers.

Krisbergh and David Wachob, the WorldGate vice president
and general manager who is spearheading the international sales effort, expect the service
will catch on in international markets, in part, because of its simplicity.

Most important, they say, WorldGate uses the existing cable
infrastructure. That will avoid sometimes-substandard fixed-line telephony networks, as
well as metered local-phone calls, which some analysts see as a hindrance to Internet use.

News agencies reported that Internet users in 16 European
countries boycotted the Web over the weekend of June 5 and 6 to protest metered
local-phone charges that force them to limit their time online.

WorldGate's low price could also help. It'll cost customers
$7 to $12 per month, with the charge added onto their cable bills almost as if it were a
premium-programming service, Krisbergh said.

Wachob said he expects the first international commercial
deployments to take place sometime over the next two months. Local operators will handle
ground-level partnerships in areas such as channel-hyperlinking (which enables users to
click on icons to visit expanded programming or advertising content) and e-commerce, he
added. WorldGate sees both as significant revenue streams in the U.S.

On the sales front, WorldGate will rely on the local
offices of set-top box manufacturers Scientific-Atlanta Inc. and General Instrument Corp.
-- both of which own stakes in WorldGate and have pacts to deploy its technology in their
gear -- to bring new operators into the fold. WorldGate will also piggyback on the pair's
major presence at international trade shows.

Wachob said the company will probably deploy its own
personnel into international markets once WorldGate is up and running, to serve mainly in
a customer-service and support function.

WorldGate will face some challenges. Interactive-TV
competitors such as Microsoft Corp.'s WebTV Networks, OpenTV Inc., and Network Computer
Inc. are already active abroad, one analyst said.

Canadian cable operator Shaw Cablesystems G.P., for one,
ran a lab trial of WorldGate, but is now eyeing other interactive TV technologies. Peter
Bissonnette, the company's senior vice president of operations, said the trial ended after
early General Instrument DCT-series set-top boxes were unable to run both WorldGate and an
electronic-program guide.

He said Shaw is now evaluating other platforms that would
enable it to better mesh its 110,000-strong Shaw@Home cable-modem subscriber base with
interactive television.

CHART:

WorldGate's International Deals

Country Operator(s)

Argentina CableVisión/TCI2

Bahamas Cable Bahamas

Brazil Image TV

Ecuador TV Cable

Mexico Cablevision

New Zealand Saturn Cable

Peru Telefónica Multimedia

Philippines Sky Cable

Poland Toya

Singapore Singapore CableVision

South Korea INC, DCS, NIC, YSC, BCN, DNC TV

Spain Retecal, TeleCable

Venezuela SuperCable

Source: WorldGate

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