siliconvalley.internet.com February 5, 2003 By Michael Singer

The game of world domination for wireless standards continued this week with news of a new deal brewing in Latin America.

Portugal Telecom and Telefonica Moviles Tuesday said they are launching commercial wireless application services powered by QUALCOMM's (Quote, Company Info) Binary Runtime Environment for Wireless (BREW) (define) platform. The joint venture between the three companies is expected to impact more than 16.8 million subscribers in Brazil.

Already, a battle over mobile phone standards is emerging in Central and South America -- one that pits CDMA2000 (define) against GSM (define).

Together Portugal Telecom and Telefonica Moviles have a long history of firsts in Latin America; first to commercially launch data services with WAP (define), first to launch a CDMA2000 1X network, first to conduct a trial of BREW wireless data services, and now, first to launch BREW-enabled commercial services.

"Based on the overwhelmingly positive feedback from our initial market trial, we are confident in the growth potential of our BREW-enabled service," said spokesman for the joint venture Luis Avelar. "The services will build stronger competitive advantages of our operations over our TDMA and GSM competitors."

Avelar said the joint venture's BREW services will take advantage of a next-generation CDMA2000 1X network, nearly doubling voice capacity and capable of supporting data transfer speeds up to 144 kbps. Customers will initially be able to select from two BREW-enabled handsets, the Motorola T720 and Audiovox/Toshiba CDM9500 with models from Samsung, LG, Kyocera and others offered at a later date. QUALCOMM said there would also be a wide array of game, entertainment, communications, productivity and business applications available to download. Some of potential applications being discussed for the joint project include WIZ Mail, Photo Album, Ringtones, Wall Paper, Via Rio, Sensual Club and games such as Navy Battle and Arkanoid.

The two wireless platforms have historically been broken down along geographic lines. Europe remains a GSM stronghold, while the United States is firmly rooted in CDMA and TDMA (define) technology. Asia has gotten a blitz of CDMA technology courtesy of QUALCOMM, but has been wavering between that and GSM.

Several more companies such as Ericsson (Quote, Company Info), Nortel (Quote, Company Info) and AT&T Wireless (Quote, Company Info) have made their presence known in countries like Mexico, Brazil, Argentina and Nicaragua hoping to dominate the region and become the king of mobile telephony - commonly known as 3G.

Already AT&T Wireless, Telecom Personal (Argentina) and Telcel (Mexico) have begun working together to launch GSM networks that will work alongside their TDMA networks.

The adoption rate to launch BREW services around the globe has been a little slower. The joint venture between Portugal Telecom and Telefonica Moviles along with Verizon Wireless and ALLTEL in the United States, KTF in South Korea and KDDI in Japan have all launched commercial BREW-based services. U.S. Cellular has launched a BREW user trial and China Unicom announced its plans to launch BREW-based services in China in the first half of 2003.

In all, San Diego-based QUALCOMM reports 32 BREW- enabled handset models available to consumers. An additional 33 device manufacturers have also indicated their interest in the BREW platform.

"The success of the BREW trial in the Brazilian market demonstrates that BREW-enabled services continue to be a leading catalyst for consumer adoption of wireless applications," said QUALCOMM Wireless & Internet Group president Dr. Paul E. Jacobs. "With BREW as the foundation, the joint venture will give the Brazilian mobile community a powerful and personalized wireless experience that is unrivaled in Latin America."

According to a study by The Strategis Group, wireless Internet services are expected to grow from 1.4 million subscribers in 2000 to more than 47 million in 2007. The study, "Latin America Wireless Internet Markets," analyzes the region's six largest marketsArgentina, Brazil, Chile, Colombia, Mexico, and Venezuela for many of the most common wireless Internet technologies.

Research group also IDC predicts the number of cellular subscribers in Latin America will grow to 143 million by 2004, while the number of mobile data subscribers will jump to more than 71 million users at the same time.

reuters.com Wed February 5, 2003 09:35 AM ET By Barbara Lewis

LONDON (Reuters) - World oil prices climbed on Wednesday ahead of a key speech by Secretary of State Colin Powell aimed at convincing skeptics on the U.N. Security Council that crude producer Iraq is hiding weapons of mass destruction.

In London, benchmark Brent crude for March LCOc1 delivery rose 57 cents to $31.66 a barrel, while U.S. light crude CLc1 rose 52 cents to $34.10 a barrel.

"War is something that's very much inevitable," said Paul Bednarczyk, analyst at economic consultancy 4cast. "The market keeps trying to price that in and I think prices must be fairly near the top."

Prices had already climbed sharply on Wednesday as dealers began to anticipate that Powell's U.N. address would increase momentum for a U.S.-led war on Iraq, which traders fear could disrupt supplies not only from Iraq but from elsewhere in the oil-rich Middle East.

In a briefing, scheduled to start at 1530 GMT, Powell has pledged to provide "sober and compelling proof" that Iraq is concealing weapons of mass destruction.

FIVE TO MIDNIGHT

Many Security Council members want to give weapons inspectors more time to carry out their work in Iraq, but the United States has said Baghdad has weeks, not months, to give up suspected arms or face a U.S.-led military campaign.

Chief U.N. inspector Hans Blix has also said that time was running out. On Tuesday, he warned Iraq that it was "five minutes to midnight" and that Baghdad urgently needed to show it was cooperating with inspectors.

Blix, along with his colleague Mohamed ElBaradei, in charge of nuclear arms teams, will go to Baghdad on Saturday and Sunday at Iraq's invitation.

He will report back to the U.N. Security Council on February 14, possibly for the last time before a U.S. invasion.

Iraqi President Saddam Hussein, in a rare television interview broadcast on Tuesday, denied Baghdad had weapons of mass destruction or links to the al Qaeda network blamed for the September 11, 2001 attacks.

"There is only one truth, and therefore I tell you as I have said on many occasions before, that Iraq has no weapons of mass destruction," he said.

U.S. PRODUCTS STOCKS FALL

Analysts and dealers said that the market was also driven higher by data on Wednesday showing a steep drop in stocks of U.S. oil products as seasonal maintenance reduced output from U.S. refineries.

Overall crude stocks fell slightly, according to industry figures, but rose slightly, according to government statistics as a two-month-old strike in Venezuela, the world's fifth largest oil exporter, relinquished its stranglehold.

Venezuela's striking oil workers said on Tuesday crude output was 1.2 million barrels per day (bpd), although President Hugo Chavez, whom the strikers are trying to force to resign, said output was approaching two million bpd.

In January, the Organization of the Petroleum Exporting Countries (OPEC) agreed to increase output to help compensate for the effects of the Venezuelan strike.

But last weekend, OPEC ministers warned that as Venezuelan crude was coming back onstream, there could be a supply glut by the second quarter when demand traditionally drops off with the end of cold weather in the Northern Hemisphere.

Analysts also predict that the war premium built into prices will quickly melt away provided that any war against Iraq is short-lived.

A Reuters survey found on Wednesday that OPEC's January production rose 380,000 bpd from December to 25.65 million bpd, but remained 1.67 million below volumes in November, before the Venezuelan strike.

www.seacoastonline.com By Associated Press

BOSTON - Attorney General Thomas Reilly is urging managers of New England’s power grid to postpone a plan to create a new method of operating the wholesale electric market.

Reilly, in a letter to Independent System Operator-New England, said the new plan could cause power rates to jump - as much as 14.2 percent in greater Boston.

ISO-New England is scheduled to vote on the plan Thursday.

"Now is clearly not the time to burden consumers with more costs that are beyond their control," Reilly wrote. "Fuel prices, both natural gas and oil, are at very high levels, and may rise even more with the threat of war in the Middle East."

The new plan will set fairer prices for electricity throughout New England, according to Ellen Foley, a spokeswoman for ISO-New England.

Under the current system, all of New England is treated as one wholesale power market, with the costs of "electrical congestion" in areas like greater Boston and southwestern Connecticut, spread to electric ratepayers across the region. The new plan would break New England into eight regional markets, each with its own wholesale price.

Home heating oil prices rise 5 cents a gallon

AUGUSTA, Maine (AP) - Home heating oil prices across Maine rose an additional five cents per gallon over the past week as the average price statewide reached $1.45, the State Planning Office reported Tuesday.

The price is 34 cents higher than at the same time last year.

Kerosene prices also went up a nickel a gallon, to an average of $1.68.

Cold weather, labor strife in Venezuela and the prospect of war in Iraq have combined to push prices to near-record levels, the planning office said. Falling inventories of heating oil, gasoline and other refined products could mean more increases in the near future, it added.

www.canada.com Silas Polkinghorne The StarPhoenix Wednesday, February 05, 2003 CREDIT: Gord Waldner   Marlene Kreller pulled in at the Esso at 33rd Street and Avenue P just as prices jumped

Motorists didn't like what they saw as they pulled up to the gas pumps Tuesday.

Prices at Saskatoon service stations had shot up six cents -- from 75.9 cents per litre to 81.9 cents. The price hike took place in the late morning and early afternoon.

The increase made many consumers simply stay away. Business was down at several gas stations.

"It's slowed down quite a bit," said Megan Schnitzler, who works at Central Avenue Co-op Gas Bar.

Catherine Hay of M.J. Ervin and Associates Ltd. in Calgary, a gasoline price watchdog, said most Canadian cities have seen price increases of four to five cents per litre recently.

"Generally speaking, most markets are up."

She said the rising price is a delayed response to increases in United States oil prices.

"I think this is a bit of a catch-up," she said. "I think it was bound to come."

Hay said now that oil production has been restored in Venezuela, after a prolonged strike, prices may soon begin to fall.

She would not speculate on the impact of a possible United States invasion of Iraq on oil prices.

reuters.com Wed February 5, 2003 09:25 AM ET By Justine Trueman

LONDON, Feb 5 (Reuters) - Gold prices rocketing to six-year highs have left shares in mining companies gasping to catch up and some hopelessly undervalued, JPMorgan Fleming Asset Management's veteran commodity fund manager said on Wednesday.

"It's only over the past few weeks that people have begun to pay attention to the fact that this area is doing very well," Ian Henderson, manager of the 34.1 million pounds ($56.4 million) JPMF Natural Resources Fund, told Reuters.

"We're so far away from (the end of the run in gold prices). I can find companies on PEs (price to earnings multiples) of four times in the mining sector. As long as I can find these companies hopelessly undervalued, (prices) will keep going up," he said.

The price of gold has leapt 37.5 percent since the end of 2001. Spot gold was quoted at around $380.50 per ounce at 1420 GMT and is up some ten percent since the start of this year, fuelled by fears of an impending U.S.-led war with Iraq and dollar and equity market weakness.

Henderson, who has been investing in commodities for JPMF -- which has about $500 billion of assets under management worldwide -- for the past 10 years, believes gold has broken firmly out of a bear market range and could rise further.

"People had become very set in their opinions and it takes a long time for them to change their minds. That is the plus as far as I'm concerned, that people haven't recognised that this has been a bull market and therein lies the opportunity," he said.

POTENTIAL GAINER

When gold was last around $375 an ounce in 1996, gold stocks were about double their current price on average, he added.

Henderson picked out Cananda's Barrick Gold Corp , the world's number two gold producer, as a potential gainer, given its share price fell 4.3 percent during 2002.

The stock is up about five percent in 2003, well ahead of the S&P/Toronto Stock Exchange Canadian gold index which is flat, up just 0.2 percent over the same period.

So far, Henderson's bullish views on commodity prices have paid off. According to figures from fund tracking firm Lipper, a Reuters company, his JPMF Natural Resources fund is up 18 percent in the last year and 44 percent over three years.

The fund has a 50.5 percent weighting in gold stocks such as Harmony Gold Mining Ltd , Gold Fields Ltd and Randgold Resources Ltd .

It also has 23.5 percent of the fund's holdings in energy companies and said commodity stocks had plenty of room to run.

Henderson said a fall in gold jewellery sales in the last year would not dampen gold prices because of pent-up demand from Asian central banks, particularly China's, and because gold mining companies continue to unwind their hedging positions.

"Eighty percent of gold is used for jewellery and there has been a decline in demand, but it has been more than made up for by the industry buying back gold," he said.

He also thinks investors are underestimating the influence of China on the world economy.

He said China was becoming a significant influence on demand for all commodities from gold for its central bank reserves to oil and base metals. In December China bought five percent of one year's gold production, worth about one billion dollars.

Henderson said both gold and oil reserves were benefiting from increased demand and restricted supply.

Demand for oil is strong from countries like China, which is becoming increasingly motorised, while oil reserves have been affected by strikes in Venezuela.

In January the Venezuela strikes cut oil exports to a fifth of November volumes. Meanwhile there are concerns supplies could be further affected by a war with Iraq.

"I am optimistic about energy especially as we enter this period of uncertainty about Iraq, because non-strategic stockpiles of oil and oil products are below the bottom of their five year band," said Henderson.

"In addition energy sector companies involved in production have seen share prices fall when the oil price has been going up," he added.