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 : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: Dexter Lives On who wrote (11238)	5/10/2001 6:18:43 PM
From: Dexter Lives On	Read Replies (1) \| Respond to of 12823

Nortel Exits DSL Business to Focus on Growth 17:59 GMT-04:00 Thursday, May 10, 2001 By Susan Taylor OTTAWA (Reuters) - Nortel Networks Corp. , the world's largest supplier of telecommunications equipment, told Reuters on Thursday that it will exit the digital subscriber line (DSL) access business to focus on higher-growth markets. Nortel acquired the DSL technology, which supports high-bandwidth traffic over copper phone lines, through its purchase last year of Promatory Communications for about $778 million. Nortel was a relatively small player in the DSL market, said Robertson Stephens analyst Paul Silverstein in a research note. It ranked fifth behind sector leader Alcatel, which generated revenues of more than $1 billion from the market in calendar 2000, he said. The report cites statistics from Synergy Research Group that show Nortel's main DSL product, the IMAS DSLAM platform, accounted for sales of about $107 million in 2000. That is less than 0.5 percent of the Brampton, Ontario-based company's total revenues for 2000, the report added. "We believe that Nortel would be hard pressed to achieve significant growth, and even harder pressed to achieve significant profitability, in the DSL access business," wrote Silverstein, who maintains a buy rating on the stock. "Nortel has been a relatively insignificant player in the DSL market and we believe the company faces limited opportunities in this market going forward." Discontinuing the business would have no impact on the analyst's estimates for 2001 or 2002, the note said. Nortel would not comment on any goodwill or writedown charges it would take related to the discontinuation and said staff cuts were included in the 20,000 job reductions that it announced in late April. "We're choosing to focus our energies on the high-growth, high-value segments to drive our customers' profitability," said Nortel spokesman David Chamberlain. "DSL is a market that's been heavily commoditized and it doesn't necessarily match up as a high-growth market for tomorrow." Nortel shares lost nearly 4 percent to close at $15.22 on the New York Stock Exchange and slipped 3 percent to close at C$23.60 in Toronto. ($1=$1.54 Canadian) © 2001 Reuters Limited. All Rights Reserved. globeinvestor.com