Beyond mobile: Telcos hook up hospitals, cars and coffeemakers

BARCELONA (Reuters) – In Barcelona’s Hospital Del Mar, Telefonica is doing more than connecting phone lines – it is also developing a lucrative new business keeping patients’ hearts in good shape.

A heart-monitoring program put in place by Telefonica is just one kind of machine-to-machine (M2M) technology that telecom operators are racing to develop for sectors including healthcare, automotive, transportation and energy.

Carriers such as Vodafone, Deutsche Telekom, AT&T, Verizon, China Mobile, and France Telecom are betting that M2M will be a significant source of growth as the number of connected devices climbs to 12 billion or more by 2020.

In cars, for example, mobile technology can be used to automatically call emergency services after a road accident. In offices, France Telecom uses it to tell companies when their coffee machines need re-stocking, while energy companies are equipping homes with ‘smart meters’ to track consumption and permit differential pricing.

The potential prize is billions of dollars in new business for telecom groups, many of which are otherwise faced with declining sales, and the promise of big cost savings for their customers.

Yet turning the ‘Internet of Things’ into a real business will not be easy for big telcos, since the market is far more complicated than their traditional sales of mobile and Internet contracts to consumers and companies.

To succeed, they have to develop an understanding of a range of industries, their specific needs and regulatory constraints. They also have to outfox a phalanx of new competitors such as start-ups in Silicon Valley, app developers, and corporate giants like IBM, General Electric and Philips.

Analysts’ forecasts vary widely on the size of the M2M market and how much of it telcos can win, since the biggest opportunity comes not from putting a mobile SIM card in devices but from providing the software and services to make them work.

Machina Research predicts revenue of 714 billion euros ($ 933 billion) by 2020 for M2M overall. Informa Telecoms & Media’s Jamie Moss says the market is growing slowly and will reach 217 million connections and $ 9.3 billion for telcos by end 2014. They earned $ 5.7 billion from M2M this year, dwarfed by the roughly $ 1.14 trillion from mobile services in the same period.

“I am very convinced that M2M will be a profit driver,” said Matthew Key, who heads Telefonica’s digital unit, which aims to earn 500-800 million euros in annual M2M revenue by 2015.

“But we need to sell more than just basic connectivity by adding know-how and a complete service, and build the business locally step by step.”

NEW TERRITORY

The opportunity and the challenges for telcos in M2M are on display at the Hospital Del March

Every morning, patients recovering from heart attacks use equipment installed in their homes by Telefonica to weigh themselves, take their blood pressure and answer a few questions on their symptoms via a touch screen. The information is transmitted to nurses at the seaside hospital’s cardiac unit who follow up by phone if they have any concerns.

The program has had a positive effect on mortality rates, reduced hospital visits and saved 9,000 euros per cardiac patient since it began two years ago, according to doctors.

Nurse Ana Linas said the system was so simple to use that an illiterate elderly woman was among the patients able to use it.

Yet the hospital, which experienced some video connectivity problems that were quickly resolved by Telefonica, has no plans to expand the project because of the costs involved.

“You have to hire trained people so that it all works. Although costs fall a lot later on, the initial investment is high in staff and equipment,” said doctor Cristina Enjuanes.

With budgets under pressure and doctors often reluctant, getting the investment needed to roll out telehealth schemes can be an uphill struggle.

Telefonica wants to roll out the heart-monitoring program elsewhere in Spain and is also investing heavily in projects in Britain with the National Health Service.

“I cannot tell you when it will ramp up. What I can feel is that we are getting closer to it … We will know soon the speed at which demand will move, and whether there is finally an opportunity to create a totally new (business) category,” said Jose Perdomo, head of Telefonica’s e-Health division.

Telefonica has had more success rolling out e-health in Latin American markets such as Brazil and Chile, where more medical care is provided via the private sector than in Europe.

CARS AND HOMES

The M2M gold rush has sent some telcos on the acquisition trail to get technology and expertise. AT&T bought U.S. start-up Xanboo and has used its technology to develop security services for the home, as well as tools for homeowners to control their heating, lighting and appliances from a mobile phone.

Verizon paid $ 612 million in June for Hughes Telematics and plans to build on the company’s expertise in M2M software for tracking truck fleets, as well as crash detection, emergency calling, and maintenance needs for cars. Hughes has a worldwide contract with Volkswagen and a U.S. contract with Mercedes.

John Stratton, Verizon’s vice-president for enterprise, said the Hughes deal would allow it to gain know-how in the software needed to boost the profitability of M2M contracts beyond the few dollars earned from the connection itself.

“If we only transport the bits of data in M2M projects, that has relatively modest value, less than 10 percent of the market opportunity overall,” he said in an interview.

“The next big piece is the solutions on top, which is what motivated us to buy Hughes.”

Korea Telecom’s experience launching a taxi fleet management service powered by M2M technology demonstrates the point. Initially it earned about $ 5 a month per taxi for tracking taxi locations with mobile technology. It boosted that to $ 50 per month and signed five-year instead of two-year contracts by selling a software platform and call center as a package with the taxi tracking.

Telefonica invested 2 million euros in a Spanish start-up called addFleet that makes a free taxi-calling app for consumers, and a paid version for taxi owners to track cars.

“There is no global market for taxi cabs, so you need to go local first,” said Telefonica Digital chief Key.

Martin Garner, an analyst at consultancy CCS Insight, said telecom operators would have to adapt if they are to succeed in making M2M a mass technology, adding that for now the market was growing slower than they would have hoped.

“We do think there is a big world in M2M for the telcos,” said Garner. “But they have to go and take it: it will not come to them.”

($ 1 = 0.7652 euros)

(Additional reporting by Harro Ten Wolde, Robert-Jan Bartunek and Roberta Cowan; Editing by Will Waterman)

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Both sides hint at renewed 'fiscal cliff' talks

WASHINGTON (Reuters) - With little to show after a month of posturing, the White House and Republicans in Congress dropped hints on Thursday that they had resumed low-level private talks on breaking the stalemate over the "fiscal cliff" but refused to divulge details.

A day after a phone conversation between President Barack Obama and John Boehner, the Republican speaker of the House of Representatives, appeared to kick-start communications, both sides used similar language to describe the state of negotiations but imposed a media blackout on developments.

"Lines of communication remain open," White House spokesman Jay Carney told reporters when pressed on whether staff talks were taking place to avoid the steep tax hikes and budget cuts set for the first of next year unless the parties agree on a way to stop them.

Asked the same question, Boehner spokesman Michael Steel also said "lines of communication are open."

The acknowledgement, even without signs of anything approaching a breakthrough, passed for encouraging news after a week of public maneuvering on the fiscal cliff by both sides to gain the maximum political and public relations advantage.

Republicans have worried publicly and privately that they are losing the war of appearances in the battle over the cliff.

On Thursday, another poll showed Republicans may have reason to worry about public perception. A Quinnipiac University survey found respondents trust Obama and Democrats more than Republicans on the cliff talks by a wide margin - 53 percent to 36 percent.

In both public statements and private encounters, Obama has tried to encourage Republicans wavering from the position of the party leadership.

Republican Representative Tom Cole, who last week broke ranks with his party and agreed to accept higher tax rates on the richest Americans, said Obama took him aside at a White House Christmas party on Monday and joked about the criticism Cole had received from Republicans.

"The president pulled me over and he said, 'Cole, come closer, I want to see the bruises,'" Cole told Reuters. "He said, 'Seriously, I will go further on this thing than you guys think. I know we can get something done.'"

While other Republicans have questioned Obama's commitment, Cole said, "I take him at his word," adding: "The best is to get to that discussion as quickly as we can."

'SOLVABLE PROBLEM'

Obama, meanwhile, played to his strengths with the latest in a series of the sort of public events he has used against Republicans in the fiscal cliff fight: a visit with a family in the Virginia suburbs of Washington to illustrate how Republican tax proposals would hurt the middle class.

"The message that I think we all want to send to members of Congress is: this is a solvable problem," Obama said while visiting the home of a couple in Falls Church, Virginia. "We are in the midst of the Christmas season and I think the American people are counting on this getting solved."

Neither side in the showdown would characterize Wednesday's conversation between Boehner and Obama or suggest it opened up new area of compromise.

Obama and Democrats in Congress want the tax cuts set to expire at the end of the year to be extended for taxpayers with incomes below $250,000 a year but not for the wealthiest 2 percent of Americans.

In exchange, the president has said he is willing to consider significant spending cuts wanted by Republicans to "entitlement" programs such as Medicare, the government health insurance plan for seniors.

Republicans have held out for an extension of all the tax cuts, but they have become increasingly divided about whether they can prevail in the face of Obama's firm stance and Republican control of only the House but not the U.S. Senate.

TANGLING OVER DEBT LIMIT

The debt ceiling issue - the same one that provoked a showdown in 2011 that led to a downgrading of the U.S. credit rating - has become a centerpiece of the fiscal cliff debate, thanks in part to Obama's insistence that Congress give him enhanced power to increase the debt limit, which needs to be raised again in the next few months.

"It ought to be done without delay and without drama," Carney, the White House spokesman, said of raising the debt ceiling.

That issue produced a largely partisan procedural scuffle on Thursday in the Senate when Republicans tried to provoke a vote on giving Obama the power to raise the debt ceiling on his own.

Senate Republican leader Mitch McConnell, who had argued that not even Democrats would support giving Obama greater flexibility, tried to prove it by pushing for a vote.

When Senate Democratic leader Harry Reid went ahead and scheduled it, confident he had enough support to win on a straight majority vote, the Republicans backed down, with McConnell demanding that 60 votes be required for passage, more than the Democrats can muster.

No new vote was scheduled. While the measure could come up again, it was dead for the moment.

"Senator McConnell took obstruction to new heights by filibustering his own bill," Reid said in a statement.

Democratic Senator Charles Schumer of New York told reporters that Republicans were losing the argument on raising top tax rates and "are trying to pivot away to other parts of the fiscal cliff in a desperate attempt to assert leverage and change the subject."

The exchange may be a taste of things to come as Congress moves toward the fiscal cliff deadline.

Economists have warned a plunge over the cliff could drive the economy back into a recession. Mark Zandi, chief economist at Moody's Analytics, told the congressional Joint Economic Committee that failure to strike a deal could have serious economic consequences relatively quickly.

"By mid-February you would be doing a lot of damage," Zandi said.

(Additional reporting by Margaret Chadbourn, Rachelle Younglai, David Lawder, Jason Lange; Writing by John Whitesides; Editing by Fred Barbash and Eric Beech)

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Death toll from Philippine typhoon nears 300

NEW BATAAN, Philippines (AP) — Stunned parents searching for missing children examined a row of mud-stained bodies covered with banana leaves while survivors dried their soaked belongings on roadsides Wednesday, a day after a powerful typhoon killed nearly 300 people in the southern Philippines.

Officials fear more bodies may be found as rescuers reach hard-hit areas that were isolated by landslides, floods and downed communications.

At least 151 people died in the worst-hit province of Compostela Valley when Typhoon Bopha lashed the region Tuesday, including 78 villagers and soldiers who perished in a flash flood that swamped two emergency shelters and a military camp, provincial spokeswoman Fe Maestre said.

Disaster-response agencies reported 284 dead in the region and 14 fatalities elsewhere from the typhoon, one of the strongest to hit the country this year.

About 80 people survived the deluge in New Bataan with injuries, and Interior Secretary Mar Roxas, who visited the town, said 319 others remained missing.

“These were whole families among the registered missing,” Roxas told the ABS-CBN TV network. “Entire families may have been washed away.”

The farming town of 45,000 people was a muddy wasteland of collapsed houses and coconut and banana trees felled by Bopha’s ferocious winds.

Bodies of victims were laid on the ground for viewing by people searching for missing relatives. Some were badly mangled after being dragged by raging flood waters over rocks and other debris. A man sprayed insecticide on the remains to keep away swarms of flies.

A father wept when he found the body of his child after lifting a plastic cover. A mother, meanwhile, went away in tears, unable to find her missing children. “I have three children,” she said repeatedly, flashing three fingers before a TV cameraman.

Two men carried the mud-caked body of an unidentified girl that was covered with coconut leaves on a makeshift stretcher made from a blanket and wooden poles.

Dionisia Requinto, 43, felt lucky to have survived with her husband and their eight children after swirling flood waters surrounded their home. She said they escaped and made their way up a hill to safety, bracing themselves against boulders and fallen trees as they climbed.

“The water rose so fast,” she told AP. “It was horrible. I thought it was going to be our end.”

In nearby Davao Oriental, the coastal province first struck by the typhoon as it blew from the Pacific Ocean, at least 115 people perished, mostly in three towns that were so battered that it was hard to find any buildings with roofs remaining, provincial officer Freddie Bendulo and other officials said.

“We had a problem where to take the evacuees. All the evacuation centers have lost their roofs,” Davao Oriental Gov. Corazon Malanyaon said.

The International Federation of Red Cross and Red Crescent Societies issued an urgent appeal for $ 4.8 million to help people directly affected by the typhoon.

The sun was shining brightly for most of the day Wednesday, prompting residents to lay their soaked clothes, books and other belongings out on roadsides to dry and revealing the extent of the damage to farmland. Thousands of banana trees in one Compostela Valley plantation were toppled by the wind, the young bananas still wrapped in blue plastic covers.

But as night fell, however, rain started pouring again over New Bataan, triggering panic among some residents who feared a repeat of the previous day’s flash floods. Some carried whatever belongings they could as they hurried to nearby towns or higher ground.

After slamming into Davao Oriental and Compostela Valley, Bopha roared quickly across the southern Mindanao and central regions, knocking out power in two entire provinces, triggering landslides and leaving houses and plantations damaged. More than 170,000 fled to evacuation centers.

As of Wednesday evening, the typhoon was over the South China Sea west of Palawan province. It was blowing northwestward and could be headed to Vietnam or southern China, according to government forecasters.

The deaths came despite efforts by President Benigno Aquino III’s government to force residents out of high-risk communities as the typhoon approached.

Some 20 typhoons and storms lash the northern and central Philippines each year, but they rarely hit the vast southern Mindanao region where sprawling export banana plantations have been planted over the decades because it seldom experiences strong winds that could blow down the trees.

A rare storm in the south last December killed more than 1,200 people and left many more homeless.

The United States extended its condolences and offered to help its Asian ally deal with the typhoon’s devastation. It praised government efforts to minimize the deaths and damage.

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Associated Press writers Jim Gomez, Teresa Cerojano and Oliver Teves in Manila contributed to this report.

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Grammys spread the love with 6 top nominees

NASHVILLE, Tenn. (AP) — The Grammy Awards celebrated the diversity of music as six different artists tied for lead nominee — Kanye West, Jay-Z, Frank Ocean, Dan Auerbach of The Black Keys, Mumford & Sons and fun.

Auerbach received five nominations as a member of the Keys and also is up for producer of the year, earning a spot with the others at the top of the list as the Grammy’s primetime television special came to his hometown Wednesday night.

“We’re speechless,” Auerbach said in a statement to The Associated Press from Germany, where he’s on tour with drummer Patrick Carney.

The rockers little resemble any of the other acts at the top of the list. The nominations for Jay-Z and West, two of hip-hop’s most important figures, is a familiar refrain. Each has routinely been at or near the top of the nominations list for the last several years.

Indie pop band fun., a featured performer during the show, aired live from Nashville’s Bridgestone Arena on CBS, rode the success of its anthemic hit “We Are Young” featuring Janelle Monae to sweep of the major categories, earning nods for best new artist, song and record for “We Are Young” and album of the year for “Some Nights.” The band’s producer Jeff Bhasker is up for four nominations.

“When you call your band fun. with a period at the end of the sentence, you set a very high standard for yourself and for fun itself,” Taylor Swift, the concert’s co-host, said in introducing them. “Fortunately this band from New York has lived up to the name in the best possible way.”

R&B singer Ocean, whose mother was in attendance, made a bold social statement earlier this year when he noted he had a same-sex relationship in the liner notes of his new album “channel ORANGE,” and The Recording Academy rewarded him with the major nominations best new artist, record for “Thinkin Bout You” and album of the year.

And British folk-rock band Mumford & Sons, which made an auspicious debut in front of an international audience during the 2011 Grammys, is up for album of the year for “Babel,” one of 2012′s best-selling releases.

Miguel, who helped Ocean shake up the R&B world this year, and jazz great Chick Corea join the Keys with five nominations apiece. Nas and recording engineer Bob Ludwig join Bhasker at four apiece.

There were no major snubs. Most of 2012′s inescapable hits are represented in some way — Gotye’s “Somebody That I Used To Know” is up for record of the year and Carly Rae Jepsen’s “Call Me Maybe” garnered a song of the year nod. Drake, Rihanna and Nashville residents Swift, Kelly Clarkson, Jack White and best new artist nominee Hunter Hayes were among 16 nominees with three nods.

In many ways the nominations reflect a singles-driven year when no album rose to the level of acclaim as Adele’s “21″ or West’s “My Beautiful Dark Twisted Fantasy,” which dominated the Grammys last February.

Rock, relegated to second stage in the era of electronic dance music, made something of a comeback, and young bands are peppered in with the nominees we’ve come to expect each year.

The best new artist category is a great example of this year’s diversity. From the minimalist R&B of Ocean, the pop-influenced sounds of fun. and Hayes, the soulful rock of Alabama Shakes and the Americana swing of The Lumineers, there’s little resemblance between the acts.

“I think people listen to a lot of types of music and Spotify has proven that, and iPod has proven that,” Lumineers member Wes Schultz said. “Radio stations don’t prove that. … Every person in that audience tonight, I saw them freaking out about various artists that have no relationship to each other.”

Alabama Shakes drummer Steve Johnson noted the diversity in the category after the show, then made a surprising statement: “If I were on the other side of the fence, I’d vote Frank Ocean personally.”

The members of fun. were “dorking it up” as they learned about their nominations, lead singer Nate Reuss said, and were especially excited to show up in the album of the year category, which also included Ocean’s major label debut, the Keys’ “El Camino,” Mumford’s “Babel” and White’s “Blunderbuss.”

“It’s been an incredible year in music,” guitarist Jack Antonoff said. “It feels like alternative music is back, looking at album of the year, especially those nominations. We couldn’t be more proud to be in there. … I think when we were sitting in our chairs out there, when we saw Jack White up there, that’s when we really pinched ourselves. We felt so honored to be in the same category.”

The 55th annual Grammy Awards will be held Feb. 10 in Los Angeles. Trophies will be handed out in 81 categories.

The 5-year-old nominations show was held outside Los Angeles for the first time and showcased Music City for its growing role in the music industry. The Bridgestone Arena marked the largest venue the show has been held in and it may have been a dress rehearsal for a chance to host the main awards show sometime in the future.

LL Cool J returned as host, sharing duties with Swift, whose hit song “We Are Never Ever Getting Back Together” earned a nod in the jam-packed record of the year category. She was joined by fun., Gotye, Clarkson’s “Stronger (What Doesn’t Kill You),” The Black Keys‘ “Lonely Boy” and Ocean’s “Thinkin Bout You.”

Song of the year nominees were Ed Sheeran’s “The A Team,” Miguel’s “Adorn,” Jepsen’s “Call Me Maybe,” Clarkson’s “Stronger (What Doesn’t Kill You)” and fun.’s “We Are Young.”

Swift and LL Cool J opened the show by putting together a beat-box version of Swift’s hit “Mean.” Hayes displayed his versatility while announcing the best pop vocal album by singing snippets of each star’s hit song. Maroon 5 played headliner, singing three songs mid-show before finishing off the live broadcast. The group stuck around for an hourlong performance afterward for the crowd in attendance.

Assisted by Monae, fun. reimagined “We Are Young” with orchestral strings as the crowd sang along, Ne-Yo, in wine-colored bowler, kicked things up with a cadre of dancers on his new club-infused song “Let Me Love You.” And the show tipped its hat to Nashville with a salute to Johnny Cash by Dierks Bentley and The Band Perry.

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Online:

http://grammy.com

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Follow AP Music Writer Chris Talbott: http://twitter.com/Chris_Talbott.

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Pfizer breast cancer drug delays progression 18 months

(Reuters) – An experimental drug showed impressive effectiveness and safety in a mid-stage trial against a common form of advanced breast cancer, lifting Pfizer Inc shares nearly 2 percent.

The favorable results prompted the drugmaker to plan large late-stage trials of the drug next year. If approved, the medicine could fetch multi-billion dollar sales, industry analysts said.

The drug, called PD-0332991, delayed by more than 18 months the worsening of symptoms for postmenopausal women with the most common form of breast cancer. Data from the study of the drug was presented on Wednesday at the annual San Antonio Breast Cancer Symposium.

The medicine, which blocks enzymes known as CDK4 and 6 kinases, was taken in combination with a standard drug called letrozole among women who were estrogen receptor positive – meaning tumors grow in response to estrogen – and HER2-negative, meaning that the HER2 protein is not causing the cancer. Such patients make up about 60 percent of breast cancer cases.

Patients had either locally advanced tumors or cancer that had spread to other parts of the body.

Those taking both drugs went an average of 26.1 months before tumors worsened. That compared with 7.5 months for those taking letrozole, but not PD-0332991. The 18.6 month difference was considered statistically significant.

“In a disease where a several-month improvement in progression-free survival is considered impressive, we view an 18.6-month improvement in PFS as remarkable,” said analyst Jon LeCroy of MKM Partners. He predicted Pfizer will introduce the medicine in 2017.

Letrozole is the chemical name of Femara, a Novartis drug that belongs to a class of treatments called aromatase inhibitors that block production of estrogen.

Side effects seen in patients taking the drug combination included anemia, fatigue and neutropenia – a decline in white blood cells called neutrophils that can put patients at higher risk of infection.

“If approved in a front-line breast cancer setting, this drug has the potential to generate $ 2 billion to $ 6 billion” in worldwide sales for these types of breast cancer patients, said Mark Schoenebaum, an analyst with ISI Group, of PD-0332991.

Schoenebaum, who had not previously predicted any revenue for the drug, said the medicine could provide considerable “upside” to Pfizer revenue if it is cleared by regulators.

He noted that researchers have not yet disclosed to what degree the Pfizer drug might have prolonged patient survival.

Pfizer had released some data from the trial in May, but released updated findings on Wednesday.

Shares of Pfizer closed up 46 cents, or 1.8 percent, at $ 25.64 on the New York Stock Exchange on Wednesday.

(Reporting By Ransdell Pierson; Editing by Tim Dobbyn)

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Syria loads chemical weapons, waits for green light

U.S. Secretary of State Hillary Clinton attends the "Friends of Syria" confernence in Paris. (AP)U.S. officials say the Syrian military has loaded active chemical weapons into bombs and is awaiting a final order from embattled President Bashar Assad to use the deadly weapons against its own people.

NBC News reports that on Wednesday the Syrian military loaded sarin gas into aerial bombs that could be deployed from dozens of aircraft.

The last large-scale use of sarin was in 1988, when former Iraqi President Saddam Hussein's forces killed 5,000 Kurds in a single attack.

However, U.S. officials told NBC that the sarin bombs had not yet been loaded onto planes but added if Assad gives the final order, "there's little the outside world can do to stop it."

The Syrian government has previously insisted that it would not use chemical weapons against its own people.

For months, the Obama administration has described the Assad regime as being on the verge of collapse. If the Syrian government were to be toppled from outside forces or from within, it would be the first nation possessing weapons of mass destruction to do so.

U.S. Secretary of State Hillary Clinton has as recently as last week warned of the possibility that Assad could use chemical weapons against his own people. After meeting other NATO foreign ministers in Brussels last week, Clinton told the gathering, "Our concerns are that an increasingly desperate Assad regime might turn to chemical weapons, or might lose control of them to one of the many groups that are now operating within Syria."

"We have sent an unmistakable message that this would cross a red line and those responsible would be held to account," she said.

At the end of the meeting, NATO Secretary General Anders Fogh Rasmussen backed up Clinton's threat, declaring that the international community could take military action against Assad and his forces.

"The possible use of chemical weapons would be completely unacceptable for the whole international community and if anybody resorts to these terrible weapons I would expect an immediate reaction from the international community," Rasmussen told reporters.

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WestJet embraces tech to woo business travelers

TORONTO (Reuters) – WestJet Airlines Ltd will use technological innovation, including a new Internet ticket booking system, to help it transform from a no-frills carrier to a lower-cost full-service airline courting lucrative corporate travelers, its chief executive said on Monday.

Canada’s second-biggest airline plans to launch a series of technology systems, most notably the new online booking engine, which will sell three tiers of tickets, in the next two months.

“Companies evolve or they die,” Chief Executive Gregg Saretsky told Reuters in a phone interview from the company’s Calgary head office.

“We’re 16 and going on 17 years old and we can’t stay just as we were 17 years ago. The world has changed. And we are changing to be more relevant for a broader segment of guests.”

The new Internet booking system, which WestJet hopes to launch in late January, will sell economy, mid-tier and premium tickets. That is a major shift from its current system, which sells only the lowest-priced ticket available.

Economy tickets under the new system will continue to sell the lowest available fare, but the cancellation fee for them will jump to C$ 75 ($ 75.48) from C$ 50. Mid-tier tickets will have a C$ 50 cancellation fee.

Premium tickets, unavailable until late March when WestJet finishes reconfiguring its 100 Boeing 737 planes to allow more leg room, will include priority screening and boarding, free cancellations and flexibility on ticket changes.

Pricing for those tickets, which may include free meals and drinks and an extra baggage allowance, has not yet been determined. Fares will be well below half the price for business class at WestJet’s bigger competitor, Air Canada, Saretsky said.

“It’s time for us to be more serious with respect to going after business travelers because frankly, they’re the ones who are booking last-minute and are happy to pay for the conveniences,” Saretsky said.

WestJet will launch its premium economy service with 24 seats per plane, but will consider expansion if it proves “wildly successful,” he added.

POISED FOR CHANGE

WestJet, which has spent about C$ 40 million over the past two years on technology projects, is poised for major changes in 2013 as it readies to launch a new regional airline, Encore.

Saretsky hopes that WestJet’s switch in coming weeks to a new Internet phone system will allow ticket reservation agents to work from home and help make room for Encore staff.

Some 750 reservation agents work at WestJet’s Calgary offices, which house about 2,400 staff. Space will be needed for Encore employees over the next 18 months while their office, hangars and maintenance stores are constructed at the WestJet campus.

Encore will be launch in the second half of 2013, “probably closer to July than December,” Saretsky said, with seven Bombardier Q400 planes.

While WestJet won’t announce Encore’s schedule until Jan 21, the carrier will initially serve only “a handful” of new cities, with ticket prices up to 50 percent below Air Canada’s, he added.

Over the next two months, WestJet will also roll out a guest notification system that alerts travelers via email about their flights, allowing them to check in remotely.

Such self-service technology will be critical as WestJet faces increasing labor costs, Saretsky said.

Wage and benefit costs, which represent about a third of operating costs, have climbed 50 percent since WestJet was founded in 1996.

“You can see that creates a little bit of drag on earnings,” Saretsky said. “We’ve got to find ways of reducing our component costs.”

If WestJet can increase self service options for travelers, that could limit the need for new employees, Saretsky said. Management also wants to improve attendance management, so that fewer employees book off sick around long weekends, and more quickly clean and process planes between flights, he said.

(Reporting By Susan Taylor; Editing by Peter Galloway)

(This story was corrected to show that WestJet is replacing its Internet booking engine, not entire reservation system, in the first and second paragraphs)

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HTC, Apple ordered to show which patents were included in their settlement agreement

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Netflix to get Disney films in TV distribution deal

(Reuters) – Walt Disney gave a much needed boost to Netflix, becoming the first major Hollywood studio to use the video service to bypass premium channels like HBO that traditionally controlled the delivery of movies to TV subscribers.

News of the deal, which enables Netflix to stream Disney‘s first-run movies to its subscribers, boosted Netflix shares by 14 percent.

Liberty Media Corp, whose Starz group now distributes Disney movies on TV, fell almost 5 percent.

Investors saw the Netflix-Disney deal as an important endorsement of the DVD rental and streaming service, which has been struggling with slowing subscriber growth and higher costs for content distribution.

Disney movies will be available for streaming on Netflix starting in 2016, after its current deal with Liberty Media‘s pay-TV channel Starz expires. The deal is for both new Disney movies and library content such as “Dumbo” and “Alice in Wonderland.”

“An exclusive deal with Disney differentiates the Netflix content from Hulu Plus and Amazon Instant Video,” said Anthony DiClemente, an analyst with Barclays Capital.

But some analysts worried that Netflix paid too much to get Disney‘s movies. Tony Wible, an analyst with Janney Montgomery Scott, estimated in a report that Netflix paid more than $ 350 million a year for Disney‘s movies and said “we would not be surprised if (Netflix) would need to raise capital”.

By comparison, HBO agreed to pay an estimated $ 200 million annually in its so-called “output,” or movie licensing deal, with 20th Century Fox earlier this year, according to the Los Angeles Times.

The deal gives Netflix streaming rights to movies from Disney‘s live-action and animation studios, including those from Pixar, Marvel, and the recently acquired Lucasfilm. On October 30, Disney announced a $ 4 billion deal to purchase the famed studio founded by George Lucas, which will now make new episodes in the blockbuster “Star Wars” series.

“This deal brings to our subscribers some of the highest quality, most imaginative family films being made today,” Ted Sarandos, Netflix‘s chief content officer, said in a statement. “It’s a leap forward for Internet television.”

DREAMWORKS EXCLUDED

Movies from Steven Spielberg’s DreamWorks Studios are not included in the deal, as that studio distributes its movies through CBS’s Showtime on TV. Disney recently signed a deal to distribute DreamWorks’ films theatrically after the studio’s deal with Viacom’s Paramount Pictures expired.

The deal allows Netflix to stream Disney movies beginning seven to nine months after they appear in theaters, as Starz does now under Disney‘s prior agreement. The deal does not cover DVD rentals of Disney movies.

Disney said in November that it would shut down its own video streaming service, Disney Movies Online, which had failed to catch on with users. A message on the ‘Disney Movies Online’ website said it would shut down on December 31.

Netflix, which started its streaming business with mostly older films, has been moving to add more original programming and produces TV shows such as “Lilyhammer,” which stars “Sopranos” actor Steven Van Zandt as an American gangster who starts a new life in Norway. The company also struck a high-profile deal with actor Kevin Spacey for “House of Cards.”

The Disney pact follows similar deals Netflix has inked for new films with smaller studios, including Relativity Media, The Weinstein company and DreamWorks Animation.

The agreements have saddled Netflix with nearly $ 5 billion in contractual commitments over the next three years for deals its made for streaming content, the company said in a recent quarterly earnings report.

Netflix‘s struggles over the last year, which have included missed subscriber guidance, an ill-fated attempt to split the DVD and streaming operations, and a swooning stock price, recently attracted the attention of billionaire activist investor Carl Icahn.

Icahn disclosed in regulatory filings on October 31 that he had amassed a nearly 10 percent stake in the video company and suggested it should pursue a sale. Netflix responded by adopting a poison pill defense.

Losing Disney’s movies means Starz is left with only Sony Pictures for film content. The pay-TV channel cast the ending of its agreement with Disney as its decision, saying it preferred to use the money for original programming creation.

Liberty Media‘s shares will “rebound,” said Vijay Jayant, an analyst with International Strategy and Investment Group.

“We believe it was Starz‘ decision to remain prudent and walk away from the bidding for Disney content,” ISI said in a report, estimating that it might have cost Starz $ 400 million to keep the movies.

Without that expense, Starz can step up its production of original series such as “Spartacus” and “Magic City,” which ISI said have become more valuable to cable operators anyway.

Netflix shares jumped $ 10.6491, or 14 percent, to $ 86.6491. Liberty Media shares fell $ 5.49, or almost 5 percent, to $ 105.56.

(Reporting By Ronald Grover; Editing by David Gregorio; Editing by Peter Lauria, Tim Dobbyn, David Gregorio and Jeremy Laurence)

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Chelsea’s hypotension drug fails to prove efficacy past week one

(Reuters) – Chelsea Therapeutics Inc said its experimental hypotension drug met the main goal of a study by significantly reducing dizziness in patients at week one, but results beyond that period were not statistically significant.

The U.S. Food and Drug Administration declined to approve the drug, Northera, in March, and asked for data that proved it was effective over two to three months.

The company’s shares, which have lost about two-thirds of its value so far this year, fell 22 percent to $ 1.40 in extended trading after closing at $ 1.79 on Tuesday on the Nasdaq.

Chelsea said in August that it would modify the main goal of the ongoing 306B study, though the FDA had said the study was unlikely to provide sufficient data for a marketing application and had suggested the company conduct an additional trial.

The drugmaker said on Tuesday that preliminary data showed that beyond week one, dizziness/lightheadedness and standing blood pressure predominantly favored Northera-treated patients over placebo, although the results were not statistically significant.

The drug, known generically as droxidopa, is designed to treat symptomatic neurogenic orthostatic hypotension — a chronic and often debilitating drop in blood pressure on standing up that is most often associated with Parkinson’s disease.

(Reporting by Vidya P L Nathan in Bangalore; Editing by Anthony Kurian)

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