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Technology Stocks : Nortel Networks (NT)
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To: telecomguy who wrote (6564)8/15/2000 1:34:14 PM
From: The Phoenix  Read Replies (1) of 14638
 

Lastly, the new-fangled Next-Gen Carriers and ISP/ASP's do NOT want to have an army of MIS/Network specialists to spend all their
overhead trying to manage 10 different network vendors. The smart new Carriers coming onto the scene probably knows that once the main
networking vendor is chosen, it makes lot more sense to rely on them to undertake to build-out their network.....this means NT will use their
in-house products/technology in most areas of networking needs and only off-source what they don't have (which is not much due to depth
& breath of their product line -- especially in comparison to CSCO which so far is a one-trick pony)

I could not disagree more. Peggylynn has is right. Carriers are going to integrators as well as using their own in house expertise. Suggesting that overhead costs are important is correct however resources are being ADDED to help support the massive deployments of revenue generating IP based services. Toll call rates are mice nuts compared to the service revenue coming from data and to assume that a couple of penny drop in toll rates is causing reduction in work forces misses the trees through the forest.

On the point of single sourcing. Nothing could be further from the fact and if you're building a network which is heading in this direction you're going to be left in the dust. No single vendor can develop and deliver all the services that customers desire. Single sourcing does a couple of things. It causes carriers to be late to market with next generation services (allowing more innovative carries to get to market and win customers) and most importantly it given the carrier no pricing flexibility - putting them at a disadvantage when negotiating. They will therefore have be at a pricing disadvantage. To this day most carriers second source technologies and products and this will be the case going forward to cause pricing conscensions from the vendors and provide the carrier with access to new leading edge services and technologies.

OG
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