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

To: H.A.M. who wrote (59366)	1/20/1999 12:30:00 AM
From: A. Edwards	Respond to of 61433

The "noise" that Cisco is making: Jan. 19 (Bloomberg) -- Cisco Systems Inc. will begin selling a product for phone companies that keeps data traffic off voice networks, as the top networking-equipment maker looks to compete with Lucent echnologies Inc. and Ascend Communications Inc., analysts said. Lucent, the No. 1 phone-equipment maker, made a major push into the Internet equipment market last week in agreeing to buy No. 4 networking company Ascend for $21.5 billion. Ascend's equipment includes a product that lets phone companies transfer calls containing data communications onto the Internet before they reach switches used for voice calls. Ascend told analysts on a conference call that sales of those so-called SS-7 signaling gateways, which free up capacity on telecommunication networks, were stronger than expected in the fourth quarter. Phone companies, faced with mushrooming Internet data, are trying to get more control over their network traffic and Cisco will need an SS-7 product to keep pace with Lucent. ''Those (gateways) will be a necessary product for building new public networks,'' said Scott Heritage, an analyst with Warburg Dillon Read. Cisco is developing gateway products using technology acquired from LightSpeed International Inc. in December 1997, Heritage said. In November, Cisco said it will share technology with No. 3 computer-maker Hewlett-Packard Co. to develop products that work with the gateways. The first of those products is expected to ship this quarter. To build its SS-7 gateway product, which began shipping in November, Ascend used technology acquired when it bought Stratus Computer Inc. for $822 million in October. Ascend Chief Executive Mory Ejabat said in an interview that its Stratus unit contributed $58 million, or about 12 percent, of the company's $475.9 million revenue in the quarter ended in December. The $58 million ''is nothing to sneeze at'' said Tamm Dell'Oro, an analyst with market researcher Dell'Oro Group. The fact that Ascend is already shipping its product gives the company a ''time to market'' advantage over Cisco, Dell'Oro said. Any product that connects the traditional voice network with the Internet is selling well right now, she said.