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PSINet, Ericsson Canada Sign Development Deal

Toronto-based PSINet Ltd. and Ericsson Communications Inc. in Mississauga, Ontario today entered into an alliance under which the companies will collaborate on the development of Internet Protocol (IP) services for electronic commerce, communications, and business solutions.

Under the agreement, PSINet Ltd. said it will combine its Internet communications, Web hosting, and applications services with Ericsson's IP-based business solutions expertise to deliver rapid deployment platforms for new services and IP telephony solutions.

In addition, PSINet Ltd. said it expects to deploy Ericsson's Phone Doubler technology later this year, a solution that enables residential Internet users to place and receive phone calls while on the Net through a single phone line.

PSINet Ltd. is a subsidiary of PSINet Inc., and Ericsson Communications is a subsidiary of LM Ericsson of Sweden. The companies will remain independent operators.

PSINet is rumored to be a potential takeover target, with AT&T heading the list of suitors. Takeover speculation drove PSINet's stock up 22% yesterday, with a 40% surge in the last two days.