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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: opalapril who wrote (45161)	2/2/2001 1:44:54 PM
From: Mang Cheng	Respond to of 45548

The following is a similar news with some new info.: 3Com Spinoff Builds Future (01/31/01, 5:15 p.m. ET) By Meg Walker, TechWeb News WASHINGTON -- For CommWorks, the new division charged with returning profits to 3Com Corp.'s ailing carrier business, the future is in IP telephony. Irfan Ali, the new president of CommWorks, made that perfectly clear as he announced new clients and strategy at the ComNet trade show in Washington, D.C. Ali announced that CommWorks, which split off from 3Com (stock: COMS) in December, will supply the IP telephony hardware for a national network planned by WorldCom Inc. (stock: WCOM). Ali said the new division hopes to announce as many as 30 similar agreements with other carriers and service providers over the next few months. He would not put a dollar amount on the deal with WorldCom, Clinton, Miss., but expressed confidence that building IP telephony and wireless networks for carriers will help him meet his plan to make CommWorks profitable in six months to a year. CommWorks might be confident that it's on the right path, but to at least one analyst, the jury's still out. Paul Sagawa, a senior research analyst for Sanford Bernstein, thinks the company has good technology for IP telephony and wireless networks. But he thought CommWorks was in for a tough ride, because IP telephony is still an emerging technology. "I don't think it's quite ready for prime time," he said. As for CommWorks future, he said, "the market is still rough." 3Com, Santa Clara, Calif., split off its carrier business from the main part of the company after second-quarter sales of networking equipment to carriers fell by 43 percent. Before that dramatic slip, 3Com's carrier business had been one of the company's most lucrative divisions, showing an annual growth rate of 30 percent for the eight previous quarters, Ali said. It's a tough time to be squeezing profits out of service providers as the industry is undergoing a consolidation. 3Com's carrier business ran into trouble because of service providers' financial problems. "The telecommunications market as a whole is going through significant change," Ali said, "and to some extent the correction is needed. But the fundamentals of our business and industry are still strong." CommWorks is in a good position, he said, because it has the technology to build next-generation telephony networks -- efficient networks that carry voice and data in packets rather than over a circuit-switched telephone network. And the subsidiary has long-term relationships with 17 of the largest carriers in the country, and most are ambitious about building state-of- the art networks, Ali said. "Every major carrier is looking at this," he said of IP telephony. "It's an opportunity for vendors to help their customers rebuild." CommWorks supplies IP telephony equipment for the core of the network. "The larger part of the market is in the core of the network where subscribers would never notice it," said Ali, who was vice president of marketing for 3Com before he moved to CommWorks. CommWorks is not a stranger to building IP telephony networks, since its parent company spent two years building parts of that network for AT&T Corp. (stock: T) and is building an IP telephony network for carriers in China, Singapore, India, and parts of Europe. At the show, CommWorks demonstrated a multi-service access platform that carries IP telephony voice calls. The company announced that AARO Broadband Wireless Communications, a service provider in Oklahoma City, will serve as the inaugural trial customer for the next-generation platform called Total Control 2000. NXGen Networks, a service provider in Denver, will use the platform in field trials.