Yo_NT'ers..................DETAILS:FROM YAHOO BUSINESS NEWS
Friday June 25, 12:38 pm Eastern Time
Nortel, Avici terminate commercial relationship
NEW YORK, June 25 (Reuters) - Communications equipment makers Nortel Networks Corp. (Toronto:NT.TO - news) and Avici Systems Inc. said on Friday they ended their marketing and distribution partnership, but Nortel will retain its 20 percent equity stake in privately-held Avici.
Nortel also will forfeit its seat on Avici's board, Avici said. Nortel confirmed that the Avici relationship ended but did not immediately provide additional comment.
Avici makes switching equipment and software that directs traffic along telecommunications networks. The equipment is designed for the coming generation of high-speed Internet and data networks.
''We see huge opportunities in the market -- the valuations are just outstanding -- so we decided to pursue a path that is different than Nortel,'' Avici Chief Executive Surya Panditi said in an interview.
''We have all along said our plan is to go on as an indpendent company and we will continue to do that,'' Panditi said.
Panditi declined to comment on whether Avici would pursue an initial public offering or seek other partnerships.
Shares of Avici rival Juniper Networks (Nasdaq:JNPR - news) soared on Friday in its IPO. Another rival, Nexabit Networks Inc., on Friday agreed to be acquired by Lucent Technologies Inc. (NYSE:LU - news) for $900 million.
The split between Nortel and Avici did not surprise industry analysts, who said the relationship between Canada's Nortel and North Billerica, Mass.-based Avici has been strained since Nortel acquired data transfer company Bay Networks.
''There was a bit of an internal strain on whether to use Avici or Bay systems. And being linked to Nortel tied Avici's hands in dealing with other partners. It's better that they part ways,'' said one industry analyst who declined to be named.
''What it (the split) did was enable them to continue the Bay relationship and allowed us to continue our path toward an independent company,'' Panditi said.
Avici said its products are currently being tested by phone companies including MCI WorldCom Inc. (Nasdaq:WCOM - news) and others. It recently announced one commercial shipment and expects to announce an overseas shipment shortly.
Salude! - Norman |
