quote.bloomberg.com
Technology News
Wed, 29 Sep 1999, 7:34pm EDT
Nortel Says It Expects to Sell $5 Billion of Fiber-Optic Equipment in 1999
By Erik Schatzker
Nortel Expects to Sell $5 Bln of Fiber-Optic Equipment in 1999
Squaw Valley, California, Sept. 29 (Bloomberg) -- Nortel
Networks Corp., the No. 2 phone-equipment maker in North America,
expects its sales of products that carry traffic or boost
capacity on fiber-optic networks to reach US$5 billion this year.
That's an increase of 70 percent to 80 percent from 1998 and
up from US$600 million four years ago, said Nortel group
president Anil Khatod. The company expects a similar rise in
sales of fiber-optic equipment in 2000, he added.
Having the fastest equipment for optical networks is helping
Nortel to benefit most as phone companies add capacity to handle
the growing volume of Internet and corporate data traffic. It
estimates that sales industry-wide of fiber-optic equipment are
rising 56 percent a year and will reach US$35 billion in 2001.
''We can't keep up with the demand,'' Khatod said in an
interview at Telecosm '99 in Squaw Valley, California. ''We'll
continue to grow faster than the market.''
Fiber optics is the fastest-growing of Nortel's businesses.
Last year, the company had US$17.6 billion in total sales and it
expects that figure to rise as much as 25 percent this year and
17 percent or more in 2000.
To maintain its No. 1 share in the market for optical
equipment, Nortel probably will spend 13 cents to 14 cents of
every dollar it gets in revenue on research and development,
Khatod said. It's competing with several big rivals, including
Lucent Technologies Inc., Ciena Corp., Alcatel SA, Hitachi Ltd.
and Fujitsu Ltd.
''We can afford to invest more in R&D than Ciena has in
revenue,'' said Khatod. Ciena had sales of US$508.1 million in
the fiscal year ended last October.
Nortel yesterday unveiled new technology designed to carry
data traffic more efficiently on fiber-optic networks. It said
products based on that innovation will be available in the second
half of next year.
Khatod also said Nortel has 750 customers for its optical
equipment, up from 78 five years ago. Among them are Cable &
Wireless Plc, MCI WorldCom Inc., Qwest Communications
International Inc. and Williams Cos.
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