Orion Securities analyst Duncan Stewart has picked up on the news report that Nortel has a new channel program in place to make it easier for existing and potential customers to migrate to VoIP from legacy telephony systems. Stewart is pleased Nortel has recognized a problem that encouraged channel partners to “rip and replace” Nortel gear with Cisco’s, but he said it is a “bit horrifying that this was not fixed sooner”. Here’s an excerpt from his research report:
“You have to understand the telecom history in this space: for 15 years (at least) voice+packets EQUALLED Nortel. It should have been mopping the floor with its competitors in this space, and although Nortel has done OK, everybody has known it has been losing what ought to have been the company’s proper market share. Nobody was sure why – maybe its technology was not good enough?”
Stewart rates Nortel as an “overweight (speculative)” with a 12-month target price of US$3.60.