What a difference one week makes !
"SweetDreams"
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ORLANDO, Fla., Sept. 23 /PRNewswire/ - The phenomenal growth of the Internet and wireless communications are rapidly nearing a crossroads, and Nortel (Northern Telecom) (NYSE: NT/TSE: NTL) is uniquely positioned to help wireless operators capitalize on this opportunity.
That's the message Nortel is delivering to more than 30,000 industry representatives attending PCS '98/PCS '98 Latin America, the annual conference and exhibition of the Personal Communications Industry Association (PCIA) underway this week at the Orlando Convention Center.
''Every day, people are finding new ways to use the Internet to add value to their personal and professional lives,'' said Matt Desch, president, Wireless Networks, Nortel. ''What's missing is a way to make the Internet available to them anytime, anywhere.''
''Wireless is the only solution that can bridge this gap,'' Desch said, ''which means there's a tremendous opportunity on the horizon for wireless service providers.''
With completion earlier this month of the merger between Nortel and Bay Networks, Nortel is a new class of company for a new class of networks. The ''new'' Nortel has launched an initiative to build the Unified Networks of the future -- secure, reliable and scalable carrier-class multimedia networks that will allow businesses to reap the benefits of electronic commerce and the new digital economy spawned by the Internet.
And Nortel is working closely with its current and future wireless customers to provide a graceful evolution to Unified Networks -- one that moves rapidly to capitalize on new market opportunities while preserving and enhancing investments in existing network hardware and software.
''Data traffic now exceeds voice traffic on wired telephone networks in the US,'' Desch said. ''It's only a matter of time before the same trend occurs with wireless. From an almost negligible amount today, data will grow to account for nearly 25 percent of all wireless traffic within the next five years.''
''Today's wireless networks are simply not designed to handle such a high volume of data traffic effectively,'' Desch said. ''But the synergies in resources, technology and expertise already identified between Nortel and Bay Networks ensure that we'll be on a very fast pace to deliver IP-centric solutions to our wireless customers.''
Nortel is already moving rapidly to position its wireless customers for new data and Internet service opportunities. Announced just last week, Nortel's Passport 8300 G Wireless Gateway will be on display in the Nortel exhibit (booth No. 1730) at PCS' 98.
Based on the widely-deployed Nortel Passport data switch, Nortel's Passport 8300 G offers GSM data services, fast digital connections to the Internet, facsimile and Interworking Function (IWF) services. It provides an immediate 200 percent improvement over effective GSM data rates previously available.
Wireless operators implementing the Nortel Passport 8300 G in their networks will also have an evolutionary path to important emerging digital wireless data standards. These standards include GPRS (General Packet Radio Service), EDGE (Enhanced Data Rate for GSM Evolution) and UMTS (Universal Mobile Telephone Service), and encompass data rates escalating from 115 kbps to 384 kbps to 2 mbps.
Also featured in Nortel's PCS '98 exhibit are the new Nortel CDMA Metro Cell base station, a new portfolio of Nortel Information Messaging Services (IMS) for wireless operators, and Nortel's Reunion family of broadband wireless access solutions for competitive local exchange carriers (CLECs).
For CDMA digital wireless service operators experiencing tremendous growth in subscribers and network traffic, Nortel's CDMA Metro Cell base station offers a flexible, scalable platform for cost-effective growth in both metropolitan and suburban network deployments. It can also be upgraded to support future third-generation wireless standards, preserving and enhancing initial operator investments.
Nortel's new IMS portfolio includes Information Management Services, a Mobile Messaging Gateway and Intelligent Announcement service. These Wireless Intelligent Network (WIN) services run on Nortel's WIN Services platform.
Nortel is also announcing a co-marketing relationship with Intelligent Information Inc. The companies will jointly promote a services package for wireless operators including the Nortel WIN Services platform and personalized information services from Intelligent Information including real-time stock quotes, sports scores and weather updates.
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The Nortel Reunion broadband wireless access portfolio provides ''last mile'' access solutions to CLECs and other carriers seeking to offer Local Multipoint Distribution Service (LMDS) and other multimedia services with the reliability, availability and performance of wireline solutions.
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Available solutions operate in frequencies ranging from 2 GHz to 42 GHz, and include multiple interfaces to wireline backbone networks, wireless transmission and reception equipment, customer premise equipment and integrated network management. Value-added services such as business case analysis, network planning, installation, training and support are also available.
The Nortel exhibit at PCS '98 also includes Nortel's comprehensive network and services portfolio for AMPS, TDMA CDMA and GSM mobile and fixed wireless service providers. Nortel is among the top three wireless network solutions providers in the world, and the only one to offer all three major digital wireless technologies anywhere in the world.
SOURCE: Northern Telecom Limited
And from today's news:
TORONTO, Sept 29 (Reuters) - Canadian telecommunications equipment maker Northern Telecom Ltd. (Toronto:NTL.TO - news) told analysts in New York on Tuesday that its third quarter results would be weak in some areas.
Nortel shares tumbled as analysts interpreted this as a warning that earnings would not match forecasts.
Nortel Chief Executive John Roth said later that revenues for the quarter would fail to meet expectations but said earnings will match consensus forecasts, despite the impression several analysts received at the meeting.
''Our revenue growth for the third quarter will come in at low double digit growth,'' Roth said. ''People were expecting us to be in the higher teens and double digits.''
Roth said three areas would affect third-quarter results: softness in some product lines, U.S. dollar strength versus other currencies and weakness in the wireless telephone division. But, he added, these were offset by ''tremendous'' strength in other areas.
Up to 40 percent of Nortel's business is done outside the U.S., which means it must exchange foreign currencies into U.S. dollars for inclusion in its results.
Nortel's earnings will still stay within the range of analysts' predictions, Roth told Reuters in a telephone interview from New York, despite the impression most analysts were left with after the meeting that the company would not meet forecasts head on.
''That's erroneous. Some people may have concluded that, but that's certainly not what we said. We said that earnings would be on the estimates of the street,'' Roth told Reuters.
''They may as well have given an earnings warning,'' said one meeting observer. ''To say that the Baby Bells (U.S. regional telephone companies) have got less spending and the wireless growth is less than expected but everything's okay...it may be a contradiction.''
Kearns Capital analyst Rob MacLellan told Reuters after the meeting that earnings would be ''lower than expectations and they're going to try and maintain their level of profitability, however you want to measure that.''
According to First Call research, analysts on average had cast that Nortel earnings would rise to $0.38 a share from last year's $0.30 a share, after a two-for-one stock split in December. Estimates from 18 analysts ranged from a low of $0.33 to a high of $0.41.
''It will be in the range of expectations,'' Roth said.
Any weaknesses would be overtaken by strength in other areas, including its new data communications arm Bay Networks, Roth said. Brampton, Ontario-based Nortel snapped up California-based Bay for US$9 billion in a deal that closed last month.
''(The weakness is) being offset by tremendous growth in our business lists, broadband, fibre optic systems. Our switching business continues to do very well and our new data business is growing at a tremendous pace as well,'' Roth said.
But after executives outlined the quarter's problems at the New York meeting, analysts on a lunch break headed for their phones to communicate developments to their headquarters.
''They didn't give any details, and people just headed for their cellphones,'' MacLellan told Reuters from New York.
Nortel's shares in Toronto reacted swiftly in the early afternoon. They had traded a little below the opening level of C$62 before analysts reacted to the New York meeting, but then plunged nearly 12 percent and were halted after falling C$7.40 to C$54.30.
The shares were still halted in Toronto and New York at market close. In New York, Nortel had fallen $5.25 to $35.50 at the time of the halt.
Analysts began to grow jittery about Nortel's earnings after French telecommunications maker Alcatel (NYSE:ALA - news) warned in mid-September that its operating income, and those of its competitors, would suffer in part from the financial crises in Asia and Russia.
Nortel's swift sell-off pulled the stock of its majority shareholder, BCE Inc. (Toronto:BCE.TO - news), and the overall Toronto stock market lower on Tuesday. The Toronto Stock Exchange's bellwether 300 Composite Index, already weak, lost further ground.
Shares of BCE, a telecommunications and telephone giant and Canada's largest publicly traded company, dropped C$3.80 to C$43.90 in trade of nearly six million shares.
Nortel's third and last quarters are traditionally vital to its overall performance for the year.
The company's stock has sunk steadily since it announced its buyout of data communications firm Bay Networks in June. In September the company said it would chop up to 4 percent of its 80,000-member world-wide workforce.
($1 = $1.52 Canadian)
EOM
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