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To: The Phoenix who wrote (25713)	5/14/1999 3:15:00 PM
From: JRH	Respond to of 77400

Thread: AT&T Makes First Nortel Networks Switch Order TORONTO (Reuters) - U.S. phone giant AT&T Corp. (NYSE:T - news) announced its first significant order for Nortel Networks Corp. (NYSE:NT - news) switching equipment Friday, signaling a switch away from its exclusive supply tie-up with Nortel rival Lucent Technologies Inc. (NYSE:LU - news) The order, rumored to be less than $300 million over this year and the next, was significant because data transfer and telecommunications gear maker Nortel has made inroads into AT&T purchasing, said CT Securities analyst Rob MacLellan. In mid-March Brampton, Ontario-based Nortel announced that AT&T was evaluating its equipment. AT&T plans to use Nortel's gear for its local network expansion, changing from circuit- to packet-based switching via Nortel's DMS-500 switch. Packet-based switching is a newer technology for pushing voice, data and voice down lines. ''Incorporating 33 Nortel Networks DMS-500 switches into our network will help us achieve our aggressive local expansion plans and provide new advanced voice services,'' said Al Hansen, AT&T Local Services senior vice-president, in a statement. ''We're picking up momentum as being a key provider to AT&T and their next generation network,'' Bill Conner, Nortel's executive vice-president of marketing, told Reuters in a telephone interview. ''Being that it's from AT&T, psychologically, it's given a big boost to the stock because it means AT&T is starting to use other, non-Lucent suppliers,'' said MacLellan. ''It means they (Nortel) cracked that walnut.'' Shares in Nortel remained fairly steady in early afternoon despite a bad day on North American stock markets. On the Toronto stock exchange shares rose 25 Canadian cents to C$108.95, while in New York they slipped 19 cents to $74.50. The closely watched Dow Jones Industrial Average on Wall Street tumbled 199.88.17 points or 1.8 percent to 10,907.02 points Friday while the key 300 composite index in Toronto dropped 112.35 points to 6944.80 or 1.6 percent. Despite the fact that the Nortel order was a drop in the bucket compared to AT&T's purchases of Lucent technology last year, the street was cheered by the news, MacLellan said. ''Its psychological impact far (outweighs) its financial impact.''