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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: ricky who wrote (10228)	3/11/1999 6:25:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 18016

Newbridge stock jumps on news of huge deal Biggest contract ever: Global One pact with Siemens will use Newbridge equipment Jill Vardy Financial Post Newbridge Networks Corp. has finally confirmed it will get the lion's share of what is expected to be the biggest contract ever awarded for its telecommunications equipment. The long-awaited Global One contract to supply the international consortium with networking equipment could bring Newbridge and its partner in the deal, Siemens AG, more than $500-million (US) over the next five years, analysts predict. That would dwarf other large contracts signed in the past year by Newbridge, including one with Britain's Cable & Wireless PLC that is worth £200-million to £300-million ($495-million to $742-million Cdn), and a three-year deal worth more than $300-million with SBC Operations Inc. The one catch with the Global One contract is that it's actually been awarded to Siemens, the German telecommunications giant that has allied itself with Newbridge for research and development and marketing for the past two years. While Siemens is the signatory of the deal, virtually all the equipment sold to Global One will be Newbridge's. Global One is an international joint venture between telecom behemoths Deutsche Telekom, France Telecom, and Sprint to build international voice, data, and multimedia services. Paul Silverstein, senior analyst at BancBoston Robertson Stephens in New York, said Newbridge should get at least 80% of the total value of the contract. He said the $500-million (US) figure "could prove to be conservative." "In any event, this is going to be a nice healthy revenue stream. And more importantly, it speaks to the competitiveness of Newbridge's products." It also speaks volumes about the health of Newbridge's relationship with Siemens. Some analysts said the deal should lay to rest concerns that Siemens is tiring of its affiliation with Newbridge and could cut ties with the smaller Canadian company. Mr. Silverstein said that will now be virtually impossible, since Siemens will rely on Newbridge for the bulk of the equipment supplied to the Global One consortium, at least in the initial years of the five-year contract. Other analysts say they're less sanguine about the future of the relationship. Duncan Stewart, technology analyst and partner at Tera Capital Corp., said Siemens' continued reselling of Newbridge equipment doesn't mean it will seek to expand the relationship by collaborating on future products and marketing efforts. The contract with Global One has been in force for several months, although Newbridge wasn't granted permission to announce it. But Alan Lutz, Newbridge's president, recently said Newbridge has shipped at least some equipment to Global One during its current quarter. Shares in Newbridge jumped on the news, even though it was widely expected. The stock climbed $1.55 to $43.70 in Toronto on news of the sale. The good news for Newbridge comes as its chief Canadian competitor, Northern Telecom Ltd., announced it has been short-listed to supply switching equipment to phone giant AT&T in the United States. South of the border, however, telecom equipment companies faced less rosy prospects. Lucent Technologies Ltd., which has had a hammerlock on AT&T business, now faces stiffer competition from other suppliers. And Cisco Systems Inc., the gorilla of the telecommunications equipment world, has warned in its most recent regulatory filing that its gross margins will likely continue to decrease, due to increased competition and a booming market for lower-end products. Cisco said research and development expenses in the near future will likely increase at a greater rate than sales as it invests in technologies for new market opportunities.

To: ricky who wrote (10228)	3/11/1999 12:42:00 PM
From: pat mudge	Respond to of 18016

Dow Jones' coverage of SBC-AOL deal: March 11, 1999 Tech Center America Online, SBC Form Alliance To Provide High-Speed AOL Access Dow Jones Newswires America Online Inc. gave another boost to Baby Bells' high-speed Internet efforts, agreeing to offer a souped-up version of its proprietary service to homes served by SBC Communications Inc. The companies said an upgraded version of AOL running over SBC's digital-subscriber-line technology will be available in the fall for about $40 a month. DSL can provide speeds up to 50 times faster than current dial-up modems. Financial terms weren't disclosed. AOL Unveils Deal With Bell Atlantic That Could Move DSL Into Mainstream (Jan. 13) AOL took its first pass at speedy Internet access in January, when it announced an alliance with Bell Atlantic Corp. to provide AOL members with DSL service. The deal marked AOL's first major effort to bring high-speed access to its 16 million users. The companies said AOL will use SBC's technology to provide premium upgrades this fall for AOL members from areas where SBC units Pacific Bell and Southwestern Bell provide the service. The areas include California, Texas, Missouri, Oklahoma, Arkansas and Kansas. The agreement also includes Nevada Bell, which is expected to deploy the high-speed service later this year. The companies said SBC's high-speed access will enable AOL members to connect to the Internet at speeds up to 1,500 kilobits per second, well above the 56 kilobits per second that standard modems top out at. SBC currently offers DSL-based Internet service for about $50 a month.