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Technology Stocks : 3Com Corporation (COMS)

COMS 0.00130

-18.8%

Nov 7 11:47 AM EST

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To: joe who wrote (21595)	9/17/1998 11:44:00 PM
From: FUZFO	of 45548

On topic: asnd-lu deal may not be in the cards, who might LU go after? news.com Alcatel, Ascend in networking deal By Ben Heskett Staff Writer, CNET News.com September 17, 1998, 12:20 p.m. PT update Things seem to get more interesting by the day in the ever-changing world of voice and data networking. Data player Ascend Communications announced a multiyear deal with European voice equipment giant Alcatel to build new networking equipment to handle the high-speed needs of the ever-growing Net. News of the deal comes as rumors continue to swirl that Lucent Technologies--once its regulatory chains come off at the end of the month--will charge into the data game at full-throttle through a play for a company such as Ascend. Given the growing partnership between Ascend and Alcatel--which remains one of the largest distributors of Ascend's products--a deal with Lucent may not be in the cards. Despite the Ascend deal, shares of Alcatel plunged nearly 40 percent after executives at the firm disclosed that sales would suffer from the ongoing economic turmoil in Russia and Asia. The new agreement builds on an existing partnership between the two firms that began more than two years ago. Alcatel distributes Ascend products in Europe, which accounts for the largest portion of Ascend's European revenue. Ascend and Alcatel said the new jointly-developed technology would roll out in the second half of next year. Among the items on their plates are a gateway based on Internet Protocol forwarding technology from Ascend and Alcatel's networking software that can be deployed with the latter's high-speed digital subscriber line system. IP is the dominant means to transmit data across the Net. The duo will also jointly work on a new "router on a card" that can slide into forthcoming switching technology from Alcatel. Joint development and engineering teams have already been set up to deliver the new products. The partnership is only the latest sign that previous barriers between voice and data equipment providers are rapidly crumbling in the so-called era of convergence. Lucent has made it known that it wants to play in the data space, while Cisco--the reigning data king--has set its sights on adding voice support to its widely deployed routing and switching equipment, opening itself up to new markets. Cisco and Alcatel also have a partnership centered around building converged networks for voice and data traffic. An Ascend spokesman said their deal was focused specifically on service provider accounts, allowing Alcatel to join with other firms to play in other markets.

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