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Technology Stocks : Nortel Networks (NT)

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To: hari t who started this subject	6/21/2004 10:45:14 PM
From: Cooters	Read Replies (1) of 14638

Even though CableVision is(I believe) a Siemens customer, their bundled offering for local/LD voice services via VoIP represents cable's response to wireline's bundle. In the first shot, the wireline guys bundled DSL w/phone service, pricing the DSL addition at about $10/mo cheaper than cable modems. Cable had only their weak circuit-switched voice product to bundle, and did not want to lower their cable modem prices. Entertainment services weren't really in the picture. Cable can now respond with a bundle of cable TV service, cable modem, and local/LD VoIP service. While maintaining their premium prices for cable TV and internet, they are basically giving the telephone service for free. Wireline is in a pickle. Their network isn't capable of delivering entertainment and they cannot discount their core telephone services on expensive circuit-switched networks. Partnerships with satellite providers are only a band-aid. If cable gains traction, wireline needs to extend this virtuous cycle and upgrade/converge their networks to all-IP and extend fiber to/near the premises. Nortel just sitting back at the nexus of the transformation, selling the best guns. news.com.com Cooters

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