Hype or what?
Mitel Networks hires senior Nortel executive to make new global push
TORONTO, Apr 19, 2001 (The Canadian Press via COMTEX) -- Terry Matthews, the
Ottawa-based entrepreneur who is positioning Mitel Networks to be a major
player in the next communication revolution, has hired away a senior
executive from Nortel Networks.
Don Smith, former president of Nortel's Optical Internet Solutions business,
becomes chief executive of Mitel Networks, the vehicle for Matthews' latest
foray into the turbulent world of telecommunications technology.
Matthews said Thursday that Mitel is poised to ride a new wave of
technological change in which the Internet will carry more of the voice
traffic now transmitted by telephone networks.
"Timing is everything, in my view," Matthews said. "We will be there - if
I'm right - right at the beginning of the action, not at the tail end."
Smith, who worked for Matthews at Mitel in the mid-1970s when it made
telephone switching equipment, will rebuild the company's global sales
organization.
"Quite a few years back, the company withdrew from Latin America, withdrew
from China, withdrew from the South Pacific, withdrew from continental
Europe," Matthews said.
"My intent, working with Don, is to drive the company to make it a worldwide
enterprise - not just Canada, U.S., U.K."
Matthews and fellow Mitel co-founder Michael Cowpland sold their controlling
stake in the company in the early 1980s. Matthews went on to found Newbridge
Networks, Cowpland created Corel Corp. and Mitel eventually got into the
semiconductor business after its base in telephone equipment eroded.
In February, Matthews repurchased the Mitel name and the company's telephone
equipment business for $350 million - part of the fortune he amassed through
the sale of Newbridge last year to Alcatel, one of Europe's biggest
communications equipment companies.
Mitel Networks has about 3,000 employees and $650 million Cdn in annual
revenues, with plans to add people and boost annual research spending to
$100 million from $60 million.
Smith said there are new opportunities for Mitel created by the spread of
high-speed fibre-optic networks.
Mitel's new products will carry voice over Internet Protocol networks
originally designed to carry data.
Lawrence Surtees, a telecommunications industry analyst with IDC Canada,
said the advantage of voice-over-IP technology, also known as Internet
telephony, is that it is cheaper for telephone companies and businesses to
run their networks.
"The great thing about IP networks is that they're incredibly efficient,"
Surtees said. "They find the most efficient way of moving information."
The drawback of IP networks, recently overcome by new software, has been
lags and interruptions in the data flow, resulting in low-quality voice
transmission.
Customer trials by Bell Canada indicate the technology is becoming mature,
Surtees said.
Smith acknowledged that other companies including Cisco Systems, the leading
supplier of Internet routing equipment, are also gearing up to sell voice
telephony products.
"I look at that as good," the new Mitel CEO said. "Because it's an
endorsement that the direction is the right direction." |
