Nortel (Northern Telecom) Accelerates ''Attack Plan'' with Expanded Capabilities
PR Newswire - September 01, 1998 08:09
Merger Means Customers Win With Industry's Broadest
Portfolio of Network Solutions
TORONTO, Sept. 1 /CNW-PRN/ - John Roth, vice-chairman and chief executive officer of Nortel
(Northern Telecom) (NYSE: NT/TSE: NTL), and Dave House, the corporation's new president,
today unveiled a new networking powerhouse, as a result of the largest merger in the history of data
communications.
Roth and House spoke to more than 80,000 employees on a live video broadcast reaching 150
countries. Using a Nortel Passport frame-cell backbone network, it was one of the largest live
closed-circuit broadcasts ever.
''This merger is a giant step in accelerating the execution of Nortel's global strategy of delivering an
unparalleled breadth of network technologies and solutions to our diversified and growing base of
customers throughout the world,'' said Roth and House, who are sharing the newly created Office of
the CEO. ''We are now unique in the industry -- we have the capability to supply not only a complete
line of wireless and wireline solutions, but also end-to-end, IP-optimized solutions for wireline and
wireless service providers, and enterprise customers.'' Roth outlined his priorities for the new Nortel,
telling employees that his top objective is to maintain the momentum of the merger, which was
approved by Bay shareholders at a special meeting August 28, the final legal hurdle in a
two-and-a-half month process that also included approval from North American and European
regulatory bodies.
''This has been a merger in real time,'' said Roth. ''It's gratifying that we were able to complete it so
quickly. The priority now is to move forward aggressively to successfully capitalize on the merger for
the benefit of our customers.''
In describing how the merger fits with Nortel's strategic direction, Roth explained that it represents a
''continuation and acceleration of our game plan.''
''With the merger and the associated organizational changes we're announcing today,'' he said, ''we've
significantly stepped up and strengthened our attack plan, which is focused on delivering customer
value in the converging telephony and internet marketplace. The new Nortel is aggressively moving
forward with a powerful and expanded arsenal of network solutions for our service-provider and
enterprise customers.''
He added: ''As part of our strategy we've been building strong capabilities far beyond our traditional
strengths in digital switching -- for example, the development of across-the-board capabilities in
wireless infrastructure solutions and top-of-class optical fiber transmission systems. Our merger with
Bay broadens our competencies even further. The new Nortel now has nearly 15,000 employees with
market-hardened packet-networking expertise. We are the clear leader when it comes to this critical
competency of the future.''
House noted that given today's diverse customer network requirements, Nortel is the first company to
offer both enterprises and service providers across-the-board expertise in every major
communications technology, including Internet Protocol (IP), frame-relay, Asynchronous Transfer
Mode (ATM), circuit-switching, broadband and narrowband wireless, and high-speed optical
networking.
''This is a new class of company for a new class of network,'' he said. ''As our customers make the
transition with data networks and IP, our task is to keep them competitive by unifying the different
technologies and solutions. Our intention is to provide the best of all worlds -- to enable customers to
operate legacy and emerging networks and technologies as if they were one seamless network.''
Unified Networks
House described how the merger of Nortel and Bay Networks marks the launch of the new
company's initiative to build the ''Unified Networks'' of the future.
''Unified Networks will allow businesses to reap the benefits of electronic commerce and the new
digital economy spawned by the Internet,'' he said, explaining that today's electronic business world
will be able to have secure, reliable, and scalable multimedia networks using diverse IP and telephony
technologies.
The new Nortel is uniquely equipped to deliver these solutions. A special combination is required --
the carrier-class resilience of traditional telecommunications networks and the flexibility and
cost-effectiveness of data networks, all complemented by world-class service and support that only
the new Nortel can deliver.
''Delivering Unified Networks requires a new class of company,'' House said. ''And the new Nortel is
the only one in that class. It has a decade of field-proven IP and routing technology in mission-critical
environments, unequalled channels to market, and the global capability to deliver unprecedented
network design, support, and service. We're the only company with the breadth of product portfolio
and technological expertise in the areas of corporate data networks, public data networks, corporate
telephony networks, and public telephony networks.''
Customer-Focused Organization
To reflect Nortel's focus on customers in the enterprise data, enterprise telephony, carrier data, and
carrier telephony market segments, Roth and House announced the following realignment of the
company's structure:
- For the carrier data customer segment, Nortel is establishing a new
Line of Business (LOB) called Carrier Packet Networks. This LOB will
provide carriers and service providers globally with tailored
solutions that encompass Nortel's industry-leading, high-capacity
optical fiber transmission systems; high-end switched-routing
platforms; frame-relay and ATM switching fabrics that feed into
optical networks; and the incorporation of Dense Wavelength Division
Multiplexing (DWDM) capabilities. The data-networking products and
technology drawn from Bay Networks, Aptis Communications, Inc., and
Avici Systems, Inc., are also being integrated into this business
unit. Clarence Chandran, formerly president of Public Carrier
Networks, becomes president of Carrier Packet Networks. The new
organization, with employees located throughout North and South
America, Europe, and Asia, will be headquartered in Billerica, MA, a
suburb of Boston.
- For the enterprise data networks customer segment, Nortel's Enterprise
Data Networks LOB is being merged into the operations of Bay Networks
to provide enterprise customers with a complete line of data
networking products and services. This LOB, called Bay Networks, will
be headquartered in Santa Clara, CA. Dave House becomes president and
CEO of this organization in addition to his broader responsibilities
as president of Nortel.
- For the carrier telephony customer segment, a realigned Carrier
Networks business unit has been formed to deliver Nortel's DMS family
of digital switching systems and other carrier telephony solutions.
Ian Craig, formerly president of Broadband Networks, becomes president
of this LOB. Craig's responsibilities also include manufacturing
operations for both Carrier Networks and Carrier Packet Networks,
which are being consolidated under Chahram Bolouri, vice president,
global operations. Similarly, Eric Ross, vice president, global
services, will have expanded responsibilities for customers of both
Carrier Networks and Carrier Packet Networks, with the goal of
offering customers unified service for hybrid networks using both
packet-switched and circuit-switched technology.
- In serving and supporting the wireless carrier and enterprise voice
customer segments, Nortel's LOBs have not changed. Matt Desch remains
president of Wireless Networks, and James Long remains president of
Enterprise Networks, which includes the company's PBX, key systems,
and call center solutions. Both business units are headquartered in
Richardson, TX.
- Because customers today in each of these market segments are no longer
making purchasing decisions based solely on the best technology, but
also on factors such as market awareness and customer preference, the
new Nortel is placing increased emphasis on its global corporate
marketing. The company has appointed Bill Conner, previously president
of Nortel's Enterprise Data Networks LOB, to the newly created
position of executive vice president of marketing. Conner is
responsible for providing strategic leadership around Nortel's global
marketing, communications, and branding initiatives.
Advertising Campaign
The company today also launched a new global advertising campaign to familiarize customers with
Nortel's new class of networks, new approach, and new capabilities. The campaign, which kicked off
with major ads in leading newspapers and with web banners appearing on business and technology
sites, will continue throughout September and beyond.
Nortel works with customers worldwide to design, build, and deliver telecommunications and
IP-optimized networks. Customers include public and private enterprises and institutions; Internet
service providers; local, long-distance, cellular and PCS communications companies, cable television
carriers, and utilities.
Nortel's common shares are listed on the New York, Toronto, Montreal, Vancouver, and London
stock exchanges. Nortel had 1997 revenues of US$15.5 billion and Bay Networks, a wholly owned
subsidiary of Nortel, had revenues of US$2.4 billion during its most recent fiscal year. The combined
company's workforce totals approximately 80,000 employees worldwide.
SOURCE Northern Telecom Limited
/CONTACT: Robert J. O'Brien, Nortel, 905-863-6250,
rjobrien(at)nortel.com; Or visit Nortel's web-site at www.nortel.com; Nortel's
press releases are also available through CNO-Call by fax at 800-758-5804,
ext. 122158 or at prnewswire.com
/Company News On-Call: prnewswire.com or fax at 800-758-5804,
ext. 122158/
/Web-site: nortel.com
(NTL. NT)
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