Can someone tell me what Nortel is saying?
Feb. 17, 1999
NORTEL: Canadian telco claims data lead
By Edward Alden in Toronto
Nortel Networks, the Canadian telecommunications and data networking group, claimed yesterday it would be the first to bring to market next-generation technology that will allow telecoms carriers to carry data traffic efficiently without abandoning existing voice networks.
The company said trials were under way and the first shipments of the new products would be made in the fourth quarter.
Ian Craig, president of Nortel's carrier solutions division, said the new package of packet telephony technologies would allow telecoms carriers to cut 50 per cent off the cost of developing a separate overlay network to carry data traffic.
In addition, operating costs would be reduced by as much as 45 per cent because carriers would not have to operate two separate networks.
The volume of data traffic, driven by the explosive growth in internet usage, has recently overtaken voice traffic in North America - growing at 10 times the rate of voice.
Telecoms carriers have been scrambling to develop new networks based on packet switching rather than circuit technology to handle the growing data traffic.
But carriers have been reluctant to phase out existing voice networks.
These represent tens of billions of dollars in sunk costs and can handle an array of lucrative call service features such as centrex, toll-free numbers and multi-media conferencing.
Nortel, which purchased US data networking company Bay Networks last year, has been leading several large equipment manufacturers in trying to develop technology that will allow carriers to handle both their voice and data traffic requirements simultaneously.
Maribel Lopez, analyst with Forrester Research in Boston, said Nortel was offering an interim solution that would be very attractive to carriers.
She added it would probably prompt other equipment manufacturers, including Lucent and Cisco, to develop similar hybrid solutions.
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