more pressure on Nortel to buy BAY? from DJ:
May 27, 1998
Lucent Seen Raising Data Networking,
Internet Phone Status
By SHAWN YOUNG
Dow Jones Newswires
NEW YORK -- Lucent Technologies Inc. (LU) will soon start selling
new technology that will help phone companies take advantage of
Internet technology and help Internet companies offer phone service, the
company said Wednesday.
The technology will make it possible for telecommunications companies
to offer new top-of-the-line data and voice services while potentially
cutting network maintenance and some other costs by as much as 40%,
the company said.
The new products represent another advance in the Murray Hill, N.J.,
telecommunications equipment maker's high-profile attack on the data
networking market dominated by such companies as Cisco Systems
Inc. (CSCO), Bay Networks Inc. (BAY) and Ascend Communications
Inc. (ASND), and also advance Lucent's competition with traditional
rivals such as Northern Telecom Ltd. (NT).
Lucent has stormed into the data networking field, which it says it will
dominate, with a string of high-profile acquisitions. The new products,
developed internally, move the battle into Lucent's telephone-network
stronghold, analysts said.
"It's a frontal assault on Cisco and Ascend, and it's being done from
their strong position," said Brendan Hannigan, director of network
strategies at Forrester Research, a Cambridge, Mass., consulting firm.
"They're moving the battle onto their own turf with their
telecommunications expertise."
The new products further blur the increasingly fluid line between voice
and data networks. Analysts said the products add up to the most
comprehensive bag of tricks yet for using Internet technology to offer
integrated voice and data services.
They include a switch that will soon be tested by MCI Communcations
Corp. (MCIC) and a server that will allow a caller to take make
lower-cost calls over an Internet-style network without dialing extra
numbers.
The server could allow an Internet service provider to add phone service
fairly simply, said Bill O'Shea, president of data networking systems at
Lucent. The service would include amenities such as call-forwarding,
911 access and directory assistance that have not been available from
Internet companies, O'Shea said. The server could also appeal to local
companies seeking to compete with entrenched carriers.
The switch will allow carriers to offer finely tuned grades of service at a
range of prices with guarantees to customers that if they pay top dollar
for Rolls-Royce service, they will not get stuck in traffic.
Being able to differentiate grades of service could allow carriers to
increase revenue by concentrating on the grades that are most profitable
for them, Lucent said.
The products could help older phone companies compete with upstarts
such as Qwest Communicatons International Inc. (QWST) and IXC
Communications Inc. (IIXC) that can offer low-cost service over brand
new high-capacity networks based on Internet technology.
"I think these products will be attactive, based on the company's claims
for them," said Nikos Theodosopolous, analyst at UBS Securities Inc.
Lucent said interest in the products has been extensive and intense. It
estimated the size of the total market for such products at $20 billion by
2001.
-Shawn Young; 201-938-5248
Briefing Book for: ASND | BAY | BCE | CSCO | IIXC | LU | NT | QWST | T.BCE |
T.NTL | X.ANZ
Format for printing
Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved.
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