Tuesday January 16, 1:23 pm Eastern Time
Nortel slashes wireless order with Mitec Telecom
OTTAWA, Jan 16 (Reuters) -
Mitec Telecom Inc. (Toronto:MTM.TO - news) said on Tuesday that Nortel Networks Corp. (NYSE:NT - news) (Toronto:NT.TO - news), the world's No. 2 telecoms equipment supplier, has slashed an 18-month order for wireless network equipment by nearly one-third to C$13.5 million.
The reduction of approximately C$6 million on the supply deal, signed in November 1999, for wireless filters and amplifier sub-systems, means Mitec's order backlog has dropped to C$23 million, the company said.
Nortel, the world's largest supplier of fiber-optic system equipment, reports its fourth-quarter results on Thursday. Many analysts are predicting a slowdown in the torrid pace of fiber-optic equipment will be replaced by an expansion in wireless network equipment sales.
``There's analysts who are saying 'Hey the optical train may be slowing, but their wireless train is going to drive it for 2001','' said Paul Sagawa, an analyst at Sanford Bernstein.
``I think wireless can be pretty good, but I don't think that, a: it can make up for the deceleration in optical; and b: I think that there's going to be a real crunch on profitability because the pricing has been pretty tough in the (wireless) industry.''
Mitec said Nortel's contract reduction was ``due to reduced demand from a particular service provider''. It added that some products are now merging into a single product, but in different frequency bands.
Shares in Nortel were down C$1.45 at C$47.70 on the Toronto Stock Exchange and $1-13/16 to $31-9/16 on New York. Mitec shares dropped 50 Canadian cents to C$2.60 in Toronto after the announcement.
($1 equals $1.50 Canadian) |
