Liberty Media is dipping into the cable telephony market with two related deals.
It will form a joint venture with IDT Corp. to provide telephony services to its international cable affiliates, it reports. Under the agreement, both will have equal equity stakes in the venture, and IDT will control day-to-day operations and appoint most of the directors. IDT also will provide the telephony termination and infrastructure for the venture, for five years, and will undertake all of the funding obligations, Liberty reports.
As part of the project, Liberty set up a five-year licensing agreement with Net2Phone Inc., a former IDT subsidiary, allowing Liberty access to software used by Net2Phone to voice-enable and operate its IP network and to provide service to VoIP customers. It also allows access to Net2Phone's IP communications applications.
Liberty says it has agreed to assign the license to the joint venture, which is still subject to regulatory approval but is expected to occur by July 14.
For its part, IDT also reported a third-quarter net loss of $48.3 million, or 73 cents a share compared with a net income of $126 million, or $1.66 a share a year ago.
IDT says the loss includes about $23.5 million in after-tax investment and other losses related to Net2Phone losses and to Teligent Inc. IDT in April purchased Liberty's 34-percent interest in the financially teetering Teligent.
It did, however, report revenue of $335.7 million for the quarter, up 28percent from a year ago.