Thread ---this answers the NT question :Lucent Technologies Inc.
Dow Jones Newswires -- June 25, 1999
DJ Nortel In-House Development Explains Split With
Avici>NT
By Ben Dummett
TORONTO (Dow Jones)--The split between Nortel Networks Corp. (NN) and Avici Systems Inc.
results from Nortel's decision to develop next generation high-capacity router equipment on its own.
Nortel, Brampton, Ont., and Avici, a closely held North Billerica, Mass. manufacturer of terabit
routers, confirmed earlier Friday that they planned to end their business relationship, which had
involved Nortel helping to market and distribute Avici equipment. A terabit router can handle up to a
trillion bits of data a second.
Still, Nortel will maintain its 22.6% stake in Avici.
Separately, Nortel, according to an Securities and Exchange Commission filing in the U.S., is selling
its 3.72% stake, or 1.76 million shares, in high-speed router manufacturer Juniper Networks Inc.
(JNPR), Mountainview Calif., as part of Juniper's initial public offering. The IPO was priced at
US$34 a share and the stock, which began trading on Nasdaq Friday, has soared to its current level
of 97 7/8.
In a telephone interview, Klaus Buechner, senior vice-president, corporate strategy and alliances at
Nortel, said his company's acquisition last year of Bay Networks, in addition to in-house
developments made by the company, means Nortel doesn't need to acquire a company like Avici or
form partnerships to offer next generation routers.
In turn, "we came to the realization more and more that we would end up competing, and therefore
having a parallel strategic relationship with a competitor didn't make sense in the long run," Buechner
said.
By contrast, Nortel rival Lucent Technologies Inc. (LU) earlier Friday acquired privately held
Nexabit Networks Inc., a maker of terabit routers, for US$900 million.
Nortel's Buechner said the company will count on several of its products, including its Versalar
Switch routers 15000 and 25000, and newer versions of this gear to compete with the terabit routers
made by its competitors.
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