CAIS Internet, Microsoft Form Service Pact
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CAIS (CAIS) and Microsoft (MSFT) are to develop a co-branded portal designed to distribute Web content through CAIS's broadband networks in the hospitality industry. Microsoft also has an option to participate with CAIS in multifamily dwelling unit operations.
As a part of the deal CAIS will put Microsoft's BackOffice operating platform to task on its network. Additionally, Microsoft has also agreed to make a $40 million equity investment in CAIS Internet in convertible preferred stock at a conversion price of $24 per share.
The investment aspect of the transaction, which is subject to certain regulatory approvals, is expected to close in the next six weeks.
Yusuf Mehdi, Microsoft consumer group vice president, said the CAIS deal is a tremendous benefit for its international travelers who want an easy way to stay connected when travelling.
"Today's announcement is yet another solid step in delivering the Everyday Web to consumers," Mehdi said. "Now consumers can access MSN from their desk via their PC, stay connected while traveling via MSN Mobile, and reconnect once they reach their destination through CAIS Internet services and the co-branded MSN portal."
CAIS Internet will work with Microsoft to accelerate adoption of key Microsoft technologies and software that support CAIS's broadband services.
CAIS Internet has signed agreements with top-notch hotel chains, collectively representing over 9,800 properties and 1.3 million hotel rooms. CAIS provides specialized Internet content and broadband Internet access to business and recreational travelers.
Ulysses G. Auger II, CAIS chief executive officer, said the Microsoft alliance leverages its grip on a major piece of the hospitality industry's market.
"This relationship takes advantage of our broad customer base and market position, and combines it with Microsoft's strong platforms and clear leadership in the Internet media business," Auger said. "We believe that this agreement will complete the CAIS broadband access customer's experience to provide the most convenient, high-speed and maximum utility of going online with CAIS Internet."
Charles Stevens, Microsoft enterprise and partner group vice president, said business travelers would enjoy faster dial-up connections when working from hotels nationwide as a result of the deal.
"By combining our technology strengths with CAIS Internet's broadband technology and industry expertise, we can ensure that the hospitality industry and businesses travelers receive all the benefits possible from Windows 2000, Microsoft's entire enterprise platform and MSN services," Stevens said.
Hotels that subscribe to the CAIS Internet service receive flat-rate Internet connectivity up to 50 times faster than dial-up modems. CAIS offers the hospitality industry the ability to install an unobtrusive broadband Internet solution to turn existing in-building wiring into voice and data path without an end-user modem.