Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: telecomguy who wrote (5035)	3/14/2000 3:10:00 PM
From: SJS	Read Replies (1) \| Respond to of 14638

Nortel Networks (NT-$121.69-Cap $174B-Strong Buy) Announces Acquisition of Xros FY00E: $1.30, FY01E: $1.60 ú Nortel Networks to acquire Xros in a stock transaction valued at $3.25B; Deal to be mildly dilutive in 2000 and accretive in 2001 and is expected to close in Q2:00; No change to previous financial guidance indicating NT?s core businesses are operating above our expectations. ú Xros?s X-1000 is an ?all-optical? cross connect, enabling signals to remain in the optical domain throughout the cross connect function as opposed to undergoing an electrical conversion; The X-1000 will initially be capable of supporting 288x288 (beta this summer) and will scale to 1152x1152 (beta by December 2000); Production shipments anticipated early 2001. ú We view acquisition as a strategic positive as it minimizes time-to-market and allows NT to enhance its competitive position in the fast growing optical networking market; The X-1000 is complementary to NT?s existing optical portfolio, particularly its ultra-LH DWDM solution (Qtera); Reiterate STRONG BUY. ú CSFB acting as financial advisor to Xros in this transaction.

To: telecomguy who wrote (5035)	3/15/2000 7:44:00 AM
From: Techplayer	Read Replies (3) \| Respond to of 14638

Contrarian article to acquisition...I would appreciate comments to this since everything that I have read states that the differentiators in the new optical networks (non-core, ie Qtera) will be in service and intelligence... Nortel Paying Too Much for Too Little? $36 million per person. lightreading.com Nortel Buys A Monster Cross-Connect Nortel Networks nortelnetworks.com announced today that it had agreed to pay $3.25 billion in stock for Xros Inc. xros.com, a startup which recently unveiled the first all-optical cross-connect to break the 1,000 port barrier. On the face of it, the deal gives Nortel a head start in dealing with the problem of interconnecting the explosion of wavelengths in carrier backbones resulting from the widespread deployment of dense wave division multiplexing . It also fits well with previous acquisitions - notably Qtera Corp with long distance transmission offerings and Cambrian with metro DWDM developments. However, it's unclear whether Xros's X-1000 cross connect will deliver everything Nortel expects, particularly when it comes to setting up and tearing down wavelengths automatically, in response to signaling. "It's a fat, dumb switch" according to Nicholas De Vito, vice president of product management and business development at Tellium, Inc. tellium.com, a startup with a competing optical cross-connect. De Vito says Xros's management system is an after-thought. It requires carriers to install a separate, out-of-band signaling network and that, he says, is a non-starter. Signaling needs to be in-band, and that needs to be built into switches from the outset. Nortel was unavailable to address this specific point (watch for an update tomorrow) but said earlier that it would be easy to integrate Xros's X-1000 into Nortel's existing net management system. It's unclear whether this would include automatic protection - setting up alternative wavelengths to reroute traffic around failures. Last week, Xros president and CEO Greg Reznick told Light Reading that this was something that the X-1000 couldn't do at present (see Xros Launches First 1000-Port All Optical Cross Connect ). The price that Nortel is paying for Xros also ought to raise some eyebrows. The startup only has 90 staff, so the bill comes to around $36 million a person. That's significantly higher than the price per person that Cisco paid for Cerent, which at the time seemed quite shocking. Still, it's not real money - it's Nortel shares -- so nobody seems to care. "We've paid a very, very fair price for this," says Clarence Chandran, President of Nortel's service provider and carrier group. by Peter Heywood, international editor, Light Reading lightreading.com About the Xros 1000 port Optical Cross Connect: lightreading.com