Ameritech Awards Contracts Worth Up to $475 Million for Video Communications Network

Strategic Insights -

Ameritech has taken another step towards offering Midwestern consumers an alternative to cable TV by announcing the awarding of contracts worth up to $475 million for components in its new two-way video communications network. The companies selected by Ameritech for these contracts are Scientific-Atlanta, Digital Equipment Corp., and ADC Telecommunications Inc. Ameritech's goal is to provide consumers with more choices, more programming variety, and more reliable service than what they currently receive from cable companies.

Key Takeaways:

  • Ameritech has awarded contracts worth up to $475 million for components in its new two-way video communications network.
  • The selected companies are Scientific-Atlanta, Digital Equipment Corp., and ADC Telecommunications Inc.
  • Ameritech's goal is to provide consumers with more choices, more programming variety, and more reliable service than what they currently receive from cable companies.
  • Ameritech has signed a five-year agreement with Scientific-Atlanta worth up to $400 million for analog and digital set-top terminals and remote controls.
  • Digital Equipment Corp. will provide video servers worth as much as $40 million for interactive services such as movies on demand, home shopping, and games.
  • ADC Telecommunications Inc. will provide cabinets that will house equipment linking the fiber-optic network with coaxial cables running to consumers' homes.
  • Ameritech expects to reach about one million new customers a year and six million customers in five Midwestern states by the year 2001.
  • The Federal Communications Commission approved Ameritech's requests to build a new network in December.
  • Ameritech, one of the world's largest communications companies, helps more than 13 million customers keep in touch.

Statistics:

  • $475 million: The total value of contracts awarded to Scientific-Atlanta, Digital Equipment Corp., and ADC Telecommunications Inc.
  • 5 years: The duration of the contract with Science-Atlanta worth up to $400 million.
  • $40 million: The value of the contract with Digital Equipment Corp. for video servers.
  • 6 years: The duration of the contract with ADC Telecommunications Inc. worth as much as $35 million.
  • 1 million: The expected number of new customers that Ameritech will reach per year.
  • 6 million: The expected number of customers that Ameritech will have in five Midwestern states by the year 2001.

Sources:

  • Press Release, Ameritech, "Ameritech Awards Contracts Worth Up to $475 Million for Video Communications Network" (February 21, 1995)
  • Ameritech's website, [www.ameritech.com]
  • Scientific-Atlanta's website, [www.scientific-atlanta.com]
  • Digital Equipment Corp.'s website, [www.dec.com]
  • ADC Telecommunications Inc.'s website, [www.adc.com]