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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: mauser96 who wrote (20842)	1/25/1999 1:53:00 PM
From: elmatador	Read Replies (2) \| Respond to of 77400

INTERVIEW - Cisco executive sees closer Alcatel links 07:51 a.m. Jan 22, 1999 Eastern By Marcel Michelson PARIS, Jan 22 (Reuters) - Rumours of the death of the alliance between Cisco Systems Inc of the United States and Alcatel SA of France are premature. The executive chairman of Cisco France, Thierry Labbe, told Reuters in an interview on Friday that, on the contrary, the two could step up cooperation after the $18.5 billion purchase of Alcatel's Internet technology partner Ascend Communications Inc by competitor Lucent Technologies Inc. ''Things are developing. Following the Lucent deal I expect more cooperation between Cisco and Alcatel,'' Labbe said. Alcatel shares recently took a battering following the Lucent bid for Ascend with some analysts and French newspapers saying that Alcatel's policy of alliances with Ascend and Cisco was on the rocks and that the company needed to make an acquisition to secure its future. ''Alcatel is a very important partner for Cisco,'' said Labbe, reacting to the newspaper reports. ''Alcatel is the number one integrator of Cisco products,'' he said. Cisco, founded in 1984 by a few computer boffins from Stanford University and named after the last part of San Francisco, is a rival to Alcatel in ADSL (Asymmetrical Digital Subscriber Line) and other parts of data and voice networks. But Labbe wanted to stress the synergies. A bid by Alcatel, he said, was improbable for two reasons: Because Alcatel Chairman Serge Tchuruk said on Thursday that while his company would make acquisitions, these were neither of the size nor the price multiples of Ascend. And because Cisco, with a value of $8.67 billion on Thursday, is the fourth-biggest technology capitalisation after Microsoft, Intel and IBM. Cisco is currently entering a new market selling modems to consumers to link-up their computers to the Internet. Labbe said that the main issue for Internet use at the moment was the speed of connection, and therefore the modem capacity, and no longer the power of the personal computer. ''To speed up the connection there are two possibilities -- ADSL and (television) cable modems,'' Labbe said. Because Cisco is a technology company without experience in mass-market production, its ADSL modem is produced under licence by Sony Corp, Samsung Electronics Corp and Philips Electronics NV. Similar deals will be struck for a modem to connect to the Internet via cable television. Labbe declined to reveal Cisco's sales in France, estimated to be over one billion francs, but he did say they rose 63 percent in the year and were set for further growth. The French market has been limited up to now for reasons apart from the relatively low penetration of personal computers in France households (22.5 percent) compared to the United States (45 percent). And Labbe said the market could take off further if impediments are removed by the liberalisation of so-called local telecommunication loops, when France Telecom has sold its cable television networks and when the level of encryption in France is raised. Prime Minister Lionel Jospin on Wednesday said he would allow higher levels of encryption -- coding to make messages and electronic commerce safe -- during an Internet news conference. ''That was a good example. The wish was there and Jospin was on the net in video, sound and text. But hardly anybody could see it because of the technology at the receiving end,'' he said.