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

To: Ian@SI who wrote (10692)	4/7/1999 7:49:00 AM
From: Glenn McDougall	Respond to of 18016

Newbridge, U.S. partner to launch technology firm Wednesday, April 7, 1999 Simon Tuck Technology Reporter globe&mail Ottawa -- Newbridge Networks Corp. is launching a joint venture with a U.S. firm to tap the market for technology that lets telephone companies upgrade their networks to accommodate Internet traffic without an expensive overhaul. Newbridge said yesterday it will spend $60-million (U.S.) to create TeraBridge Technologies Inc. in partnership with TeleHub Technologies Corp. of Gurnee, Ill. Kanata, Ont.-based Newbridge said TeraBridge has the potential to become one of its top two revenue streams. TeraBridge, which is ready to sell its hybrid call and service technology, won't become part of Newbridge's famed affiliate program but instead will eventually be owned equally by the two parties, which were vague yesterday about the initial split. TeleHub, a subsidiary of TeleHub Communications Corp., will contribute its intellectual property and about 130 employees. The new company will be based in Gurnee, just outside Chicago, and will employ very few Newbridge people in its early days. However, the board of directors and its technology committee will be made up in equal parts by Newbridge and TeleHub representatives. TeraBridge's chief executive officer probably will be appointed within weeks. Neither company would release any financial forecasts about the new venture, but Newbridge president and chief operating officer Alan Lutz said he expects it to produce "revenue of significance." Newbridge officials later said TeraBridge is aimed at a market that could be worth several billion dollars annually within a few years and that the new company is up to a year ahead of its key competitors, namely Lucent Technologies Inc. of Murray Hill, N.J., Northern Telecom Ltd. of Brampton, Ont., and Cisco Systems Inc. of San Jose, Calif. "The whole industry recognizes this trend," said Brian Jervis, executive vice-president of Newbridge's switching-products group. "We want to lead and dominate the market." The company's confidence is based on the belief that telephone companies and other carriers need to boost their technological capacities to provide voice and data traffic, largely because of the proliferation of the Internet. The new venture already has a smattering of deep-pocketed customers, including Munich-based Siemens AG, Newbridge's most important partner, and TeleHub's parent company, an alternative carrier. Analysts said the lacklustre performance might have been caused by the expectation that the Newbridge announcement would be a larger one. "There is potential in the marketplace," said Robert MacLellan, a communications technology analyst with Canada Trust Securities Inc. in Toronto, "but success [with this joint venture] shouldn't be a foregone conclusion."