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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Craig Ferguson who wrote (4055)	4/9/1998 2:08:00 AM
From: Helmut	Read Replies (1) \| Respond to of 18016

Is this the story everyone is looking for? This should be a good day! Helmut Thursday, April 9, 1998 Newbridge dials up $522M British contract By JILL VARDY Technology Reporter The Financial Post ÿOTTAWA - The shares of Newbridge Networks Corp. jumped by more than 6% on heavy volume yesterday on unconfirmed news it has made a sale worth more than $500 million to Cable & Wireless PLC. ÿNewbridge officials refused to comment on reports of the sale, estimated to be worth up to œ220 million ($522 million), to supply asynchronous transfer mode equipment to the British telecommunications giant. ÿBut investors got wind of it. Newbridge shares (NNC/TSE, NN/NYSE) closed up $2.25 to $37.35 in Toronto, on volume of 2.49 million, more than triple the three-month daily average of 830,290. ÿMuch of the volume reflected trading by Cr‚dit Suisse First Boston Canada, one of the first brokerages to receive news of the deal and relay the information to its clients. ÿThe Cable & Wireless deal is believed to be made up of three agreements. ÿNewbridge and its partner, Siemens AG, have been selected as key suppliers of ATM equipment to Cable & Wireless and its affiliated companies. ÿNewbridge will supply œ200 million of ATM equipment to provide the backbone for Cable & Wireless global network over the next five years. ÿSpecifically, Cable & Wireless will use Newbridge's MainStreetXpress switching and network management software for its own and its international subsidiaries' ATM networks. ÿIn a smaller deal, Newbridge switching equipment will also be used for Cable & Wireless's new CityVoice Express and CityData Express networks, which will provide voice and data services for Europe's financial community. By August 1998, the two networks will link 241 financial centres in 17 European cities. ÿThe initial value of that contract is œ2 million, forecast to grow to œ20 million in the next few years. ÿMarket analysts were expecting Newbridge to make a sale to Cable & Wireless, but this one is about twice as large as anticipated. It's one of several key supply contracts to be awarded this year for ATM equipment, which is used to move voice, data and multimedia signals simultaneously at high speed. ÿNewbridge chairman and chief executive Terry Matthews has said the key to Newbridge's future success lies in its ATM business, especially with public telecommunications carriers like Cable & Wireless. ÿThat's because ATM enhances the speed and capacity of their networks, as customers place more demands on the telecommunications system. ÿ"It all gets down to what the clients want. They want managed global multi-services," Matthews said recently. ÿWinning the Cable & Wireless deal is a coup for Newbridge, which would have been competing against giants such as Northern Telecom Ltd., Lucent Technologies Inc., Ascend Communications Inc. and Cisco Systems Inc. ÿIt also comes at a crucial time for the company, which has been trying to convince investors sales of its ATM equipment will be strong enough to offset declines in revenue from its older products. ÿSales of its packet switching products, including its flagship ATM equipment, jumped more than 70% in the first three quarters of its current fiscal year (ending April 30) and now represent more than half Newbridge's revenue.