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

To: Kent Rattey who wrote (51504)	8/4/1998 7:55:00 AM
From: Kent Rattey	Read Replies (1) \| Respond to of 61433

Stratus Buy Marks Trend Among Networkers (08/03/98; 7:10 p.m. ET) By Mary Mosquera, TechWeb Ascend Communications' purchase of Stratus reflects a trend toward telecommunications and network service providers consolidating to offer voice and data over the Internet, analysts said. Ascend said Monday it would buy Stratus Computer in a deal valued at $822 million, to create a powerful supplier of Internet-based telecommunications equipment. The acquisition lets Ascend (company profile) sell to the regional Bell carriers and be a tougher competitor for rival Cisco Systems (company profile), said one analyst Monday. "The rapid growth of the Internet has increased data traffic and strained the public switched telephone network, forcing carriers to constantly expand their telecom backbones," said Ascend CEO Mory Ejabat. "In addition, deregulation is encouraging large service providers around the world to deploy networks that will support the integration of voice, video, and data," Ejabat said. Alameda, Calif.-based Ascend makes voice and data equipment for phone carriers and Internet service providers. It wants to integrate those products, Ejabat said. Acquiring Stratus, based in Marlboro, Mass., will give Ascend the Signaling System 7 software that can switch and combine data and voice, operations system software, and a fault-tolerant computer platform. Stratus (company profile) makes computers that run around the clock for telephone carriers and other industries. "Consolidation in the telecom-equipment industry has been faster and more furious than in the services industry," said Scott Cleland, analyst with Legg Mason Precursor Group in Washington, D.C. More consolidation is expected this summer, he said. Aside from the usual market drivers abetting mergers, Lucent Technologies, a spin-off of AT&T, is adding spark to the consolidations. After Oct. 1, Lucent (company profile) will be allowed to use pooling, a form of accounting that lets a company write off costs over time, instead of immediately. Pooling is better for shareholders because it dilutes the bottom line less. Other telco players may want to acquire companies before Lucent changes its accounting procedures, which will give it more resources to acquire other assets. Ascend has been considered a takeover target by Lucent .