Rich Tehrani’s Bullish Take on Nortel

TMCNet’s Rich Tehrani reviewed Nortel’s recent announcements – several contracts in Europe and CEO Mike Zafirovsky’s press conference – and offered his take on Nortel’s operations and prospects. Below, you find Rich’s take, which is a lot more bullish than the general sentiment. (Everything below is from Rich’s story, including the last paragraph.)

Mobility
A super-hot area – productivity will skyrocket as mobility gets better. There is lots of money to be made in this space and it will become more competitive as smartphone makers, including Blackberry, wireless carriers and Microsoft (which could be in the smartphone category, but is so large they deserve their own) all jockey for leadership position. Nortel has a great relationship with Microsoft, which could be important for Nortel. In the past, Microsoft has had a reputation for draining its partners and taking over markets for themselves. But I suspect the newer Microsoft is kinder and gentler, and this partnership could really help Nortel out a great deal.

Enterprise Transformation
This is a buzzword that may mean a different thing depending on who you are, but if you have read my articles on Just in Time Communications (assuming this is what transformation means), this is exactly what the company should be focusing on: How to make companies more productive and efficient.

Services & Solutions
This is a profit generator par excellence. Look at how IBM has transformed itself into a new company revolving around Linux and software and services. Nortel could do the same. From Mike Zafirovski’s viewpoint, it is time to take some of the money those consultants have been making from Nortel customers for all these years.

My take is Nortel has good direction and if next generation mobility encompasses IMS, WiMAX and other crucial service provider technologies, then the company is on the right track.
In addition, according to Reuters, Nortel is looking for acquisitions. Some likely areas are, in my opinion, WiMAX, cable technology and IP communications companies focusing on the enterprise and service provider space.
The company still faces fierce competition, but sometimes shaking up your team with a sale of an asset that is underperforming can wake up the organization and get the whole company to work harder and more efficiently. I would guess this strategy will pay off, as long as the company executes and Zafirovski continues to exude strong leadership. So far, so good.

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3 Responses to “Rich Tehrani’s Bullish Take on Nortel”

  1. Stanley Says:

    “I would guess this strategy will pay off, as long as the company executes and Zafirovski continues to exude strong leadership. So far, so good.”

    The stock declined over 30% since this inexperienced CEO’s arrival.

    What a track record in acquisitions/ small European orders/ motivated staff by cutting business or layoffs/ microsoft magic bullet against Cisco, etc…

    His entire commentary is utterly contradictory to anyone following Nortel closely. Is this guy for real? I can’t believe what I read.

  2. nortel Says:

    excellent point. it is difficult, if not impossible, for anyone to make that kind of sweeping statement given nortel’s current state of affairs. you could argue zafirovski exudes strong leadership but to suggest nortel is headed in the right direction is way, way too optimistic and premature.

  3. whatthefuss Says:

    “Before he joined Motorola, Zafirovski logged 24 years at General Electric. Though Motorola had some critical stumbles in the all-important handset business under Zafirovski’s watch, he is also credited for helping to tighten the organization by trimming businesses, cutting staff and lowering costs.”

    that’s what he will continue to do and that’s all he knows. Nortel BOD brought in someone that got a FEW YEARS experience on Motorola HANDSET BUSINESS ……. BUT not about hardware and software, and sytems and networks.

    Nortel is becoming a “mobile” company and the divisions become like
    “handsets”. each “handset” group got 20 percent target to stay or doom. like the handset business, cost IS the benchmark.

    No stealing my free lunch and bottle water! Bring your own paper clips! (you could hear Mike Z. say the messages into the corporate voicemail)

    Mike Z. (long time working in GE) ….. a repeat problem like Bill Owens (long time working in government)

    a repeat problem with Nortel BOD ….. CEO HIRING. what keeps Nortel afloat ? they got connections with the bank loans. In return, the banks got Nortel assets and interests and they got stock options and bonus for exit strategy.

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