AOL to Swallow CompuServe

America Online will cement its dominance of the online world today as it acquires, via a complex transaction, CompuServe. The breaking development this morning will add another 2.6 million subscribers to AOL’s current 9.0 million customers. The complex transaction involves the acquisition of CompuServe by WorldCom and then the sale of CompuServe to AOL. AOL will sell its ANS Communication subsidiary to WorldCom in exchange for CompuServe and $175 million in cash. CompuServe’s primary owner, H&R Block, says it will use the proceeds to introduce new financial products and services.

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New Asian Smart Card Plant

Schlumberger opened a smart card manufacturing facility in Hong Kong. Schlumberger’s new venture – the Hong Kong Cards Industrial Centre is the only complete smart cards manufacturing facility in Asia. At the moment, chip modules or finished cards must be made in Europe or the USA and imported – often adding weeks to projects. Schlumberger’s new factory is located in the Aberdeen district of Hong Kong, with plant and staff capable of manufacturing up to half a million cards per month, initially, and substantial room for expansion.

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First SET 1.0 Payment Products

GlobeSet announced Friday, the industry’s first SET application products incorporating the SET 1.0 specification. Available through Tandem Computers, the iTP SET 1.0 product suite supports secure payment card transactions over the Internet. Tandem is the leader in online transaction processing providing solutions that process 90 percent of the world’s securities transactions, 80 percent of the world’s ATM transactions, 66 percent of all 911 emergency called and 66 percent of all credit card transactions. General availability for the iTP SET 1.0 product suite will be early 1998.

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ULTRADATA Signs Another

ULTRADATA Corp. (NASDAQ:ULTD) has been selected by CP Federal Credit Union in Jackson, Michigan as their new technology partner.

With $151 million in assets and over 28,000 members, CP serves over 35 Select Employer Groups. Its primary field of membership is Consumer Energy in Jackson.

ULTRADATA continues to expand its market presence with the addition of CP Federal Credit Union. “Choosing a new service provider is not an easy decision,” said Jerry King, CEO of CP Federal Credit Union. “However, the decision was made simpler by the quality of ULTRADATA’s systems, the advanced technology, and the personal interest they showed in the mission of our credit union.”

“We are delighted with the addition of CP to our client-base,” stated Robert J. Majteles, President and CEO of ULTRADATA. “CP’s business philosophy fits in with our mission; they put their relationship with their members before anything, and that makes them exactly the type of institution our products and services are designed for.”

With ULTRADATA’s core system, ULTRAFIS(TM), CP has purchased ALPS-Automated Loan Processing System, online ATMs, online Debit Cards, UDC-Front Office, IPS Bondsmart, the Optical Management System, PC Browser Banking, Voice Response, and Shared Branch.

ULTRADATA provides online information management solutions for financial institutions. The company develops, markets and supports: ULTRAFIS(TM), an advanced information management engine; the Ultra-Access(TM) suite of remote banking products; and ULTRADATA Select, client/server-based software applications.

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Bigger & Smarter

BankBoston, Bank of Montreal/Harris Bank and consulting firm First Annapolis opened the curtain yesterday on a new joint venture that will combine the existing U.S. card portfolios of BankBoston and Harris Bank with the management and marketing savvy of First Annapolis. The firms expect to close the deal by Nov. 30 and they project the newly formed entity will be among the fifteen largest U.S. card portfolios by the year 2000. Under terms of the agreement: BankBoston will contribute most of its $1.4 billion portfolio in exchange for $5 million in cash, $50 million in preferred shares and 19% of the common shares of the new entity (BankBoston will retain its regional portfolio cardholders); Bank of Montreal/Harris Bank will contribute most of Harris Bank’s $782 million portfolio and $115 million in cash in exchange for a 69% ownership; and First Annapolis will contribute its subsidiary First Annapolis Marketing Information Services, Inc. in exchange for a 12% share of the new company. The yet to be named company has also designated First Data Resources as its provider of data processing, customer service, credit and collections support. In making the announcement Thursday the three firms indicated they see the current shakeout in the market as an opportunistic time for alliances and acquisitions. They also believe the key to future profitability in the card business is data mining and economies of scale. First Annapolis approached between eight and ten issuers with the concept, landed two, and expects to announce a third partner next year. Bank of Montreal says they would like to eventually reduce their ownership to about 35%. The new company expects to go public in 2 years.

PARTNER’S MID-YEAR PORTFOLIO SNAPSHOT
ISSUER RECV YTD VOL ACCTS ACTIVES CARDS
BankBoston $1.4b $2.8b 1.2m 725k 1.2
Harris Bank $782m $672m 1.2m 474k 710k
Source: CardData/Bankcard Update

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AirTouch Cellular Calling Card

Following one of the hottest communications trends in Europe, AirTouch Cellular has introduced Prepaid Cellular Service, offering consumers new options and control over their wireless spending.

AirTouch Cellular offers the only prepaid cellular calling card that provides service throughout Southern California at a flat price per minute, with no roaming or long distance charges for calls made from the region to anywhere in the United States.

AirTouch Prepaid Cellular Calling Cards are easy to buy, easy to use and easy to understand with no credit check, contract, monthly charges or cellular bills. As simple as the name implies, consumers pre-pay for cellular service by purchasing cards in $30 increments. There is also a one-time initiation fee, which may vary by retailer, but is typically $30.

“The use of cellular calling cards is booming in our international markets. In Portugal, for example, 40 to 50% of all new wireless business is being generated from prepaid cellular,” said Nancy Hobbs, executive vice president and general manager, AirTouch Cellular, Southern California.

“Prepaid service is the ideal solution for consumers who want more control over their wireless spending, and students, members of the military, or anyone else living in Southern California on a temporary basis.”

The Prepaid Cellular program continually keeps callers updated on their spending through an announcement at the beginning of each call indicating the minutes left on their current account, and an announcement at the end of each call indicating the remaining dollar amount. Consumers can easily add money to the account at any time by dialing “Star 611,” which is free of airtime charges, or stopping by a retail location.

“AirTouch Prepaid Cellular Calling Cards make cellular affordable because it’s easy to manage my bill,” said Don Mason, owner of Rhythm Television Entertainment, a production company in San Diego.

“Now I can use cellular service to enhance my business — but I control the costs. I simply use it until the money is gone.”

Airtime charges for the Prepaid Cellular Calling Card are seventy-five cents per minute including long distance charges for calls from the home calling area of San Diego, Orange, Los Angeles, Riverside, San Bernardino and Ventura counties. Roaming (use of the service outside of the home calling area) is available in hundreds of cities throughout the United States for $1.75 per minute.

AirTouch Communications is a global wireless communications company, with interests in cellular, paging, and personal communications services in the United States, Belgium, Germany, India, Italy, Japan, Poland, Portugal, Romania, South Korea, Spain and Sweden, as well as an interest in the Globalstar satellite system. The company, based in San Francisco, serves over 9 million proportionate customers worldwide. AirTouch’s cellular division serves more than 3.7 million customers in the United States, including the nation’s largest cellular market in Los Angeles.

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