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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Narotham Reddy who wrote (43056)	4/9/1998 9:21:00 AM
From: Chris S	Read Replies (2) \| Respond to of 61433

Article from Financial Post The site reference is canoe.ca Technological wizard that I am, I don't know how to link the above site so have simply copied the article below. (As I read read this before submitting, it appears that the link may actually work - this technology stuff is incredible) Is it possible that Newbridge stole a contract that the street expected ASND to get? Any comments? Thursday, April 9, 1998 Newbridge dials up $522M British contract By JILL VARDY Technology Reporter The Financial Post OTTAWA - 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. Newbridge 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. But 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. Much 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. The Cable & Wireless deal is believed to be made up of three agreements. Newbridge and its partner, Siemens AG, have been selected as key suppliers of ATM equipment to Cable & Wireless and its affiliated companies. Newbridge will supply œ200 million of ATM equipment to provide the backbone for Cable & Wireless global network over the next five years. Specifically, Cable & Wireless will use Newbridge's MainStreetXpress switching and network management software for its own and its international subsidiaries' ATM networks. In 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. The initial value of that contract is œ2 million, forecast to grow to œ20 million in the next few years. Market 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. Newbridge 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. That's because ATM enhances the speed and capacity of their networks, as customers place more demands on the telecommunications system. "It all gets down to what the clients want. They want managed global multi-services," Matthews said recently. Winning 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. It 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. Sales 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.