International Business Machines Corp. is negotiating with several companies to buy satellite dishes in what would be a new effort by the computer giant to create satellite networks for the distribution of computer data.
This potential thrust in the telecommunications market comes barely four months after IBM sold its interest in Satellite Business Systems in exchange for a 30 percent equity position in MCI Communications Corp. SBS, which was losing money, also provides satellite networks.
Acquiring the right satellite dishes could give the company a specialized network capability that it could market to banks, retailers and other large national organizations. Providing that additional service also gives the $50 billion-a-year company an additional selling point for computer terminals that function as cash registers and IBM's popular line of personal computers.
"IBM is very close to signing a deal," said a source at M/A-Com Inc., a Massachusetts-based manufacturer of satellite dishes that is one of the companies in negotiations with IBM. M/A-Com has an extensive satellite electronics facility in Germantown, Md. M/A-Com currently derives nearly one-third of its estimated $870 million in projected revenue from its satellite dish product line.
Officially, company officials declined to confirm that negotiations were in progress.
"We are currently in negotiations with a number of companies," said Hugh Bradshaw, M/A-Com's vice president and general counsel. "We are not at the stage of negotiations where we are compelled to make an announcement."
Similarly, IBM declined to comment. However, other sources within both companies confirm that discussions have gone on for several weeks and that they may be nearing a conclusion.
"My guess is that IBM is talking with a number of satellite dish companies," said Dean T. Mack, president of Equatorial Communications Co., a Mountain View, Calif.-based company that provides the kind of satellite data networks that IBM is interested in creating. "IBM equipment all over the country is attached to leased telephone lines, and small satellite dishes are a viable alternative to that."
While it currently lacks the satellite dishes, IBM does have the satellites. When IBM sold SBS to MCI, it retained the SBS IV satellite and the to-be-launched SBS V and SBS VI satellites. The company has been looking to exploit the capacity of those satellites.
IBM is most interested in marketing a service based on small satellite dishes that can both send and receive satellite transmissions.
These dishes -- which cost roughly $6,000 apiece -- could be attached to point-of-sales equipment (computerized cash registers) or personal computers that could, for example, track the daily sales of merchandise at retail chain stores across the country and beam the information back to a central computer for tabulation and analysis.
Similarly, banking groups could use this kind of system for their automatic teller machine networks.
Conversely, central dishes could be used to distribute data from one point to multiple points. For example, a news wire service could distribute up-to-the minute information to clients whose personal computers were linked to the receive-only satellite dishes.