Clearly, Mitec indicated the slashed orders pertained to a particular service provider only and that some product are merging into one. For all you know, this could be a positive as older products get replaced with newer, more cost effective ones. Mitec could've just been an unlucky supplier who got left out. The point is, the news is very very specific and cannot be used to point to a company and industry trend.
Yet, this Paul Sagawa man starts to make all kinds of speculation about optical and wireless tied to this piece of news, instilling additional FUD. How is that for logical reasoning of an intelligent donkey?
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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) |
