Excite@Home strikes a deal down under

Excite@Home, the largest domestic cable modem service, will announce tomorrow a joint venture to offer cable-based data services in Australia. The move is the latest overseas push for the company and the first major announcement since its recent merger with Net directory Excite.

International expansion is key since Excite@Home wants to have as many as 8 million subscribers by 2002, but claims fewer than 500,000 in the United States today.

The company also is racing to beat other ISPs, such as America Online, which also are looking to increase their subscriber bases abroad. AOL already offers service in Australia.

Excite@Home will team with Australian cable operator Cable & Wireless Optus to use the company's state-of-the-art cable network to deliver broadband services to as many as 2.2 million Australian homes.

Many analysts view Europe and Asia as areas with huge growth potential for Internet companies.

The new Australian joint venture, to be called @Home Network Australia, puts Excite@Home squarely on the map on four continents. The company already has partnerships with some of the largest cable companies in the United States, as well as a strong presence in Canada.

@Home Nederland, the company's Dutch subsidiary, began offering service last month and its Japanese joint venture is expected to begin trials in November with commercial service starting in late December, according to executives.

Excite, the company's Web portal site, also has an Australian site, but that site and the new venture will operate as separate entities.

The company hopes to continue its aggressive expansion into foreign markets. John O'Farrell, senior vice president of international for Excite@Home, said the company continues to hold talks with potential partners in Europe and Asia.

Excite also has international sites in China, France, Germany, Italy, Sweden, and the United Kingdom, but O'Farrell would not comment on whether the company will seek high-speed Net-over-cable deals in those countries.

High-speed Internet
Australia presents a unique market opportunity for Excite@Home, executives said.

An English-speaking nation with about 16 million residents, Australia boasts a high percentage of tech-savvy users. More than 40 percent of Australian households have a personal computer and about 20 percent of homes have Internet access.

In addition, nearly all of Optus' networks have been upgraded to two-way cable, a prerequisite for interactive data services. Unlike in the United States, where many of Excite@Home's cable partners are in the process of upgrading their networks, the company will not have to wait for Optus to upgrade its wires to launch the service nationwide.

The service will primarily be available in the cities of Sydney--where Optus is headquartered--Melbourne, and Brisbane.

The service will be branded as Optus@Home and is expected to roll out later this year, sometime during the fourth quarter, O'Farrell said. No pricing details have been set, he added.

Optus, like its larger Australian competitor Telstra, offers a package of communications services, including local and long distance telephone service, cable TV, and dial-up Internet access.

More than 200,000 customers subscribe to Optus, which is controlled by British telecommunications giant Cable & Wireless, for pay TV service.

O'Farrell said Excite@Home already is considering ways to expand its new relationship with Optus, but declined to be more specific.

An influential Excite@Home board member recently suggested the company should consider offering a dial-up service, in addition to its broadband offering. Optus currently claims about 100,000 dial-up users.