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

To: Kenneth E. Phillipps who wrote (7173)	10/2/2000 4:53:42 PM
From: telecomguy	Read Replies (1) \| Respond to of 14638

The other interesting aspect of this gigantic off-sourcing contract is that NT is now GUARANTEED of revenue stream. Unlike a buildout project where NT is constantly depending on the Carriers to upgrade/build their network (hence Sagawa's negative outlook based on slowing CAPEX), Network Mgmt contract is essentially a repeat business in the sense that a chunk of C&W overhead is being outsourced to NT for the long-term. This means NT's revenue cycle won't be as lumpy and difficult to manage if more & more of NT's customers sees the efficiency/value-adds inherent in hiving off 25% of their infrastructure support cost to NT. Presumably, NT will not have to hire all the C&W operational staff since there will be duplication & synergy. VERY INTERESTING development --- one that I hope NT can duplicate with other large Carriers. Talk about locking in customers, with this approach, NT will not have to constantly fight for equipment contract to secure future revenue stream. Question of course is how well they will execute as an OPERATOR as opposed to a BUILDER. Future looks bright for NT --- almost as bright as the light on the OPtera platform.