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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (19788)	1/8/2002 3:55:13 PM
From: puborectalis	Respond to of 99280

Sonus Networks Shares Gain on China Netcom Deal Audio/Video Market Update: 11 A.M. (ET) - (Yahoo! Finance Vision) Market Update: 12 P.M. (ET) - (Yahoo! Finance Vision) SAN FRANCISCO (Reuters) - Shares of Sonus Networks Inc. (Nasdaq:SONS - news) gained almost 6 percent on Tuesday after the company said it would supply China Netcom with equipment for Internet-protocol voice services over its broadband network. In afternoon Tuesday trade on the Nasdaq, Sonus shares traded at $5.67, up 29 cents, or 5.4 percent, after the company said China Netcom would buy its systems for a network expansion. China Netcom, formed in 1999 and backed by Goldman Sachs Group Inc. (NYSE:GS - news) and Rupert Murdoch's News Corp. (NCP.AX), will initially install Sonus equipment in Beijing, Shanghai, Guangzhou, Dalian, Shenzhen, and Nanjing, according to Sonus. Sonus President and Chief Executive Hassan Ahmed called the China Netcom contract a big win. ``Sonus is not a U.S.-centric company,'' Ahmed said. ``A big part of our development activity goes into internationalizing our product. China Netcom's deployment of voice-over-IP services will be significant as its network will be built using the latest broadband gear rather than legacy systems, Ahmed added. ``With less well-developed infrastructure, they're modernizing aggressively for the Internet, which lends itself well to voice-over-IP packet services that Sonus provides,'' said Joe Cyr, an analyst with CIBC World Markets. Sonus' partnership with China Netcom comes as China's telecom sector prepares for internal competition. On Tuesday, China said it is seeking to build its fast-growing telecom industry around four carriers offering both fixed-line and mobile services. The two-year effort to boost competition would see cellular giants China Mobile Ltd (NYSE:CHL - news) and China Unicom Ltd (0762.HK) join fixed-line providers China Telecom and China Netcom as the four providers, a government spokesman said. Sonus' partnership with China Netcom also comes as China prepares to host the 2008 Summer Olympic games. ``The government is very convinced it needs to showcase telecommunications for the Olympics,'' said analyst Aalok Shah of Pacific Crest Securities. ``This is the start of what Sonus will be doing, moving more aggressively into international markets,'' Shah added. ``Given reductions in carrier spending for existing infrastructure here, Asian customers are more likely to spend near-term because they are building new infrastructure.'' China Netcom gives Sonus an important foothold in China, said U.S. Bancorp Piper Jaffray analyst Ted Jackson. ``It's probably between $5 million and $10 million in initial business, there will be more business from it and China is potentially the world's biggest market for telecommunications technology,'' Jackson said. Sonus shares are down some 88 percent from a 52-week high of $46.50, but have rallied from a low of $2.44 in early October.