There were reasons that Alan Lutz was so upbeat.
The C&W/China Post/GlobalOne contracts alone could be worth more than half of NN's current revenue for each year in future for at least 5 years to come. This will put a floor for NN's future revenue growth. And RBOCs, LU, WorldCom, Qwest, Level 3, Williams, and ISPs, and globle enterprises for intranet/extranet will follow ...
It is not unusual for China to sign contracts with multiple vendors. If you go into a CO of a local telephone service provider, you will see equipment from Siemens, AT&T, Alcatel… just like a world trade show. But in the news announcement, the Siemens/NN contract includes all 31 provinces cross China (did the announcement mention "exclusive"?). ASND announcement sounds like kind of provincial (regional) contracts.
Siemens is THE largest telecomm/electronics vendor in Asia, and perhaps Europe. Siemens receives credit/commission for selling NN products. ASND is a relatively new comer in Asia. And LU is not big in China either (but T was). The beauty of the Siemens/NN alliance is that it is non-exclusive. That would allow the eager LU to buy 15-25% of NN. (NN does mention competition to CSCO and ASND, but not LU).
The reason that the amount of the China Post contract is not announce is simple -- nobody can accurately estimate the exploding needs of Chinese people in future. China has more than 1 billion populations, but fewer than 10% (not sure) have telephone services.
The shorters are lucky because of the light pre-Thanksgiving trading. The real buying probably shall come after Thanksgiving. |
