Morning Edition: Freeserve in freefall and Vodafone squares up to BT

The ISP's entry to the index in the spring raised eyebrows and led many commentators to declare that this 'ebusiness thing' was getting out of control. Freeserve was burning cash, had never turned in a profit and was somehow worth much, much more than the company that created it, Dixons.

Now a combination of a poorly performing share price and the de-merger of gas provider BG Group means there is no room for Freeserve among the financial elite. Sanity has returned...

Those celebrating Freeserve's downfall will probably want to ignore the fact that the FTSE 100 is still headed by a company very much at the heart of the new economy, Vodafone. And the mobile phone operator is back in the news today.

Coincidence, perhaps, but within hours of BT promising the prospect of free phone calls, Vodafone was homing in on the fixed-line business itself.

The Independent reports that Scotland's Atlantic Telecom is joining forces with the world's largest mobile operator to provide fixed-line calls for consumers across the mobile network. The announcement of a service which will not be available until next January, had the desired affect on Atlantic's share price sending it 19 per cent higher.

From operators to handset makers, and bad news for Ericsson, reports the Financial Times. Twenty-four hours after Nokia announced "blockbuster" results, Ericsson continued to suffer heavy losses - losses for the third quarter were running at 29 per cent. Ericsson partly blamed component shortages, a problem clearly not affecting Nokia which believes 400 million phones will be sold this year, leading to an estimated one billion users by 2002.