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Technology Stocks : Ciena (CIEN)

CIEN 191.71

-1.3%

Nov 14 4:00 PM EST

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To: Kenneth E. Phillipps who wrote (10582)	3/6/2001 10:15:55 PM
From: James Fulop	Read Replies (1) of 12623

>>I read where Nortel is selling a 160 channel DWDM system to Telecoms in China. I was just wondering whether lightreading considers that a high channel or low channel system. <g> << Why do I get the feeling that is an illegal "leading the poster" question?...<g> Seriously though, that brings up an interesting issue about China. A lot of firms in the past in general have seen great potential in China for their business, but other than setting up low cost operations (factories, etc.) that take advantage of the low labor costs, most have not been very profitable. A lot of this was due to the unique regulatory environment (especially in the telecom sector, but also other sectors as well) there which now is changing quite rapidly. I say this because I wonder which firms, if any, are really making money there now selling DWDM systems. We will probably never know given the way revenues and costs are booked in large multinational corporations (as sometimes many costs are booked in high taxation countries and revenue in low taxation countries or the use of many subsidiaries color accurate accounting accountability...although to be fair I really don't know how Nortel or any other equipment vendor operates internationally...) As a side note, the COO of Ciena lived in HK for a number of years and has been on record saying that while he sees good business being done in China, he can't figure out how companies are making money doing that business there. (And which may be why Ciena has put more emphasis on Japan and Korea than some of its competitors in the region like Nortel and Lucent, although it does have a HK office headed by a former Nortel exec....) It will interesting to see how all this Asian business pans out... Sorry for the rambling...

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