Archive for the ‘Rivals’ Category

Nortel, Huawei Go Separate Ways

June 7, 2006

Nortel's plans for joint venture with Huawei Technologies has apparently fallen apart less than four months after being unveiled. Nortel spokeswoman Ann Fuller told the Ottawa Citizen the JV was "not appropriate" (whatever that means). Nortel was supposed to own a majority stake in the Ottawa-based JV, which slated to focus on high-speed equipment such as IP-DSLAMS and the development of ultra-broadband products. While Nortel's JV with LG has worked out, Nortel's track with Asian suppliers is less than stellar in light of the fact a JV with China Putian has also evaporated.
Update: In a research report, Merrill Lynch said it views the Huawei JV cancellation at "incrementally negative". "Even though Nortel could still work with Huawei, we do see benefits in a formal JV such as positioning Nortel's products in BT's 21C network where Huawei is currently the incumbent access vendor." 

Maybe Siemens is Willing to Deal

April 28, 2006

If Mike Zafirovski is considering a major deal, his bargaining power with Siemens was given a big boost when the German  conglomerate unveiled plans to chop 1,000 jobs (administration, sales and development) at its communications division due to lower than expected profits. "The job cuts are unavoidable as Siemens is required to reach cost positions that correspond to international pricing competition,'' Siemens said. The communications business, which is reportedly on the block or being spun out, has 54,500 employees. According to Bloomberg, the unit has struggled to keep pace with rivals such as Ericsson AB, Nokia Oyj and Nortel.

Troubles for Juniper?

April 19, 2006

Analysts are not expecting to be overwhelmed when Juniper Networks posts its first-quarter results today. Apparently, demand for routers has softened as carriers such as Verizon looking for equipment at the edge and access parts of the network. Juniper’s prospects will also be impacted by the marriage between Alcatel and Lucent – given Juniper had a sales partnership with Lucent. The Street.com’s Scott Mortiz has more details.

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And the Next ex-GE Hire is….

February 27, 2006

….Joseph Flanagan, who becomes vice president of order management. Flanagan, who will report to senior vice-president for global supply chain Joel Hackney, has spent the past 13 years working with General Electric – Nortel CEO Mike Z.’s old stomping grounds. In the wake of the GE-ification of Nortel, it is interesting to look at a Financial Times story about Motorola CEO Ed Zander who has kept most of the team he inherited rather than bring in his own people.

Nortel-Huawei Joint Venture

February 1, 2006

Now, this is interesting news: Nortel and Huawei have signed an MOU to create a joint venture that will develop ultra-fast broadband technology. Nortel will bring its voice and broadband networking expertise, while Huawei will supply its broadband access technology (and presumably low-labour) to create products that will carry voice, video, data and wireless data to business and residential customers on one IP platform. The JV will be majority-owned by Nortel and headquartered in Ottawa. Joint development work has already started even though the JV won’t be finalized until Q3. If deal makes a lot of sense if you look at how Huawei has made such strong inroads in the telecom equipment market with low costs and attractive financing plans provided by the Chinese government. Instead of continuing to go head-to-head, Nortel CEO Mike Zafirovski has decided join ’em rather than fight ’em. If this deal – and similar JV deals such as the one with LG in South Korea – is what it takes for Nortel to thrive within the current competitve landscape, then JV away, Mr. Z. Telephony Online and The Street.com’s Scott Moritz offer up their takes on the deal. Here’s what TD Securities Chris Umiastowski said about the deal: “We think it makes a lot of sense for Nortel to partner with the world’s most relevant Chinese competitor for broadband gear. Nortel wants to win its way back into the broadband access market and Huawei would like to increase its global sales.”