Telecom Provider ACN Takes Control Of WorldGate

ACN, a provider of telecommunications services, announced Friday that it reached an agreement to acquire a controlling interest in video-phone provider WorldGate Communications and to purchase more than $50 million worth of WorldGate’s video phones over a two-year period.

Last week an investment fund backed by ACN’s owners acquired 63% of the common voting equity in WorldGate, previously a developer of interactive TV solutions before switching its business to video phones.

ACN, based in Concord, N.C., offers wireline, wireless and voice-over-IP services in 19 countries in North America, Europe and the Asia-Pacific region.

The agreement between ACN and WorldGate “gives WorldGate a significant revenue stream to fund development of its technology and expand distribution to currently untapped telecommunications customers,” the companies said.

ACN and WorldGate said they will immediately begin developing a video phone to meet ACN’s specific requirements, and shipments of the ACN model may begin as early as mid-2009.

Trevose, Pa.-based WorldGate began life in interactive television and was a partner in TVGateway, an interactive program guide consortium formed with Comcast, Cox Communications, Charter Communications and Adelphia Communications.

WorldGate in 2003 sold its interactive TV assets and began developing video phones instead. Motorola signed on as a distributor for WorldGate’s Ojo video-phones in 2004, but the partnership was abandoned two years later.