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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Shread who wrote (2368)	4/8/1999 4:46:00 PM
From: Paul Lee	Respond to of 14638

Now here's a nice story Nor Tel Beat Rival Lucent For Bell Atlantic Contract By BEN DUMMETT Dow Jones Newswires TORONTO -- Northern Telecom Ltd.'s (NT) contract to supply Bell Atlantic Corp. (BEL) with networking equipment supports its strategy to compete with its major competitors, analysts said. Telecom earlier Thursday said it had won two contracts worth up to a total of $1 billion to supply equipment to the U.S. regional phone carrier, which includes the sale of next generation digital loop carrier equipment for high-speed access at the edge of Bell Atlantic's network. Bell Atlanti also awarded part of this contract to France's Alcatel S.A. (ALA). Alcatel would be expected to win a portion of this contract since its DSC Communications Corp. unit had already been a supplier to Bell Atlantic, analysts said. But Lucent Technologies Inc. (LU), Northern Telecom's big rival, was conspicuously absent from the award announcement, despite the fact that Lucent had been one of Bell Atlantic's main equipment vendors for access network equipment, analysts said. For Northern Telecom to replace a major competitor like a Lucent is "a big win" for the Brampton, Ont. company, said Truc Do, technology analyst at Soundview Technology Group. Equally important for Northern Telecom is that the deal signals an improvement in its lukewarm relatioship with Bell Atlantic, Do said. This contract underscores the success Northern Telecom has had in knitting together its fiber optic, data and traditional circuit switch products to win business from carriers, said Mark Lucey, technology analyst at Kearns Capital Ltd. in Toronto. Investors were also attaching a lot of significance to the deal. In Toronto trading Thursday, Northern Telecom is up 8.80, or 8.7%, to 110.00 on about 1.7 million shares. However, Rob MacLellan, technology analyst at CT Securities Inc., suggested that investors temper their enthusiasm. He noted revenue from the pact will be spread out between three to five years, which means Northern Telecom would receive about $250 million annually, assuming the equipment is sold over four years. But $250 million a year isn't a huge amount, considering Northern Telecom is expected to generate revenue of about $22 billion this year, MacClellan said. In addition, Lucent investors don't seem overly discouraged by the news, MacLellan said. In New York trading Thursday, Lucent is down 1/8 to 63 7/8 on about 6.5 million shares. Officals at Lucent Technologies Inc. (LU) weren't immediately available to comment on the Bell Atlantic contract. In a telephone interview with Dow Jones, Ian Craig, president of Northern Telecom Ltd.'s (NT) Carrier Solutions division, said the company started shipping equipment to Bell Atlantic Corp. (BEL) in the first quarter of this year, with additional sales under the pact expected to "ramp up" starting in the second half. Northern Telecom has made other sales of its next generation network edge technology, but the Bell Atlantic deal is the single biggest. "This is by far the biggest single breakthrough we've had" in selling this type of equipment, the executive added. For Craig, the Bell Atlantic pact supports Northern Telecom's bet over the last several years that carriers would increasingly seek equipment allowing them to offer new high-speed services over an existing network. Craig said the next generation edge technology Northern Telecom is selling to Bell Atlantic allows the regional phone carrier to offer high-speed access to the Internet over a network whether the network is copper, fiber, fixed-radio link, or cable. In addition, the technology will allow Bell Atlantic from its central office to download software to the edge of the network to change the types of services it can offer customers, he said. In the past, carriers needed to physically plug in another card at the edge of the network to offer customers new services, a more time-consuming and expensive method, Craig said.