Nortel’s Asian Ambitions

By Mark Evans | Published: July 18, 2008

Given how quiet it has been on the Nortel front, you have to believe the senior executive team has packed up for cottage country.

But AAN needs to keep feeding your Nortel fix so I was scouring the Web looking for interesting tidbits when a Reuters story from last week caught my attention. Francois Lancon, who heads up Nortel’s Asia-Pacific operations, said the company wants to get 20% to 25% of its revenue from Asia, compared with 16% last year.

Lancon told Reuters it’s “pretty ambitious” – which probably ranks as a major understatement given the fierce competition, especially from domestic suppliers such as Huawei and ZTE.

Still, you have to give credit for being offensive instead of defensive. Remember, this was a company that was battered and bruised as it trudged its way through an accounting scandal and a series of financial restatements. Even if sales don’t show any noticeable improvement, it’s good to see Nortel posturing in a positive way – be it about Asia or how environmentally-friendly its products perform.

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  • Beenthereb4

    Mark,
    There`s smoke, can`t still yet find the fire. Heard that internally, travel, capital, and hiring freezes. Smells like M&A, can`t miss that smell, question is who is acquiring who. There`s always a deal going on, question is, is this the one.

  • Nortel watcher

    Beenthereb4, assuming Nortel is the target, do you think the Canadian govt. will allow it now that most of the scandals and their consequences are now behind them(Nortel)?

    We've all heard it here and elsewhere of how the sector has shrunk due to M&A deals and that it may very well be a positive for Nortel. But will the govt. allow it is, I think, a bigger question.

  • NOT THERE ANY MORE

    Gotta love it – another revenue target. Not a margin target, not a profit target, but a revenue target. BSNL must be planning phase 3.

  • Apple

    BSNL has a new offer, 93 mill lines at $70 a line
    I posted it here that July 16 would show who was the winner
    wait and see
    and Yes, BSNL is in Asia!
    Nortel bragged about reducing costs in India so this time it should end up better than $1 loss on $1 revenue.
    Problem is that NT has to compete for those lines with Huawei and ZTE, so sad!
    NOK is just laughing at them /silly pricing!/
    btw
    If Nortel was able to reduce costs 50% it still will be 50 Cents loss on $1 revenue /simple math/

  • anonymous

    Heard that internally, travel, capital, and hiring freezes. Smells like M&A

    That would every mean company is an M&A target in this economy, which has significantly slowed after the results from Microsoft and Google this week. Nortel has done this several times in the last 8 years. Its nothing new. The truth of the matter is the economy is plunging deeper into an L-shaped recession.

  • http://www.200cash.com Don

    Apple,

    I thought the new BSNL contract winner(s) would not be disclosed for 6-8 months after the opening of the bids on July 16th. Am I mistaken? I will try to find the news release and post the link.

  • http://www.200cash.com Don

    Apple,

    Here is a link to a press release on the 93m line opportunity:

    http://wirelessfederation.com/news/category/bsnl/

    “India’s state-run telecom firm BSNL has invited bids for a contract valued at over €4.2 billion (US$6.5 billion) to supply 93 million GSM lines.

    “At about US$70 [€45.33] per line, the tender could be worth over US$6.5 billion (€4.2 billion],” company director S. D. Saxena was quoted as saying.

    He also said equipment makers such as LM Ericsson, Nokia Siemens Networks, Motorola, Nortel Networks, Alcatel-Lucent, Huawei Technology and ZTE are expected to participate in the bidding process, the Reuters report said.

    All the bids will be opened on July 16.

    “It should take six to eight months to award the tenders,” he said.

    Unlisted BSNL is trying to expand its network to compete with rivals including Bharti Airtel and Vodafone Essar.

    Saxena said the 93 million GSM lines would include 3G, services, “depending on the release of spectrum by the government,” while the remaining will be used for 2G.

  • Apple

    there is not much sense in that
    opening bids on July 16 and awarding contracts in 6 months; why would it be such a delay?
    Does it mean that nobody will know who bid what for the next 6 months?
    As I know, BSNL needs new lines right away
    As I understand BSNL, the lowest bidder will start installations right away./up to 50 mill lines for one company!/
    As I know ZTE is first to get the most, Huawei is second…
    What Nortel and Motorola can do this time? That is the question!
    Erics charges $100 a line / it will be difficult for ERICs to get anything this time/ and NOK is just laughing at the “silly pricing” in India as CEO said and reported nice profits last quarter!

  • ex-nt2

    Nortel Watcher

    I dont think the Gov of Canada will prevent or step between someone acquiring Nortel. They do not do a lot of defense as well so nothing strategic. As for acquirer, somebody with deep pockets. This is not possible at least on the next 3 year horizon. MSFT is totally focused on twisting Yahoo around. Cisco has become too big. Others are making small acquisitions. Its too expensive when you see a $9-10 price tage, $7 billion debt. Thats like buying the co for $10 to 12 billion.

    For what ??? there are a lot of valuable companies to buy for that price. pretty much a Nortel can be built for cheaper.

  • Nortelhand

    Well said ex-nt2. Mike Z is managing a train wreck and has done a great job at running it into the ground. This company will limp along like a hurt dog for many many more years to come. It never makes money (or so little it is nothing), so it can never pay its debt..

  • anonymous

    It never makes money (or so little it is nothing), so it can never pay its debt.

    Haven't you figured out that most of the corporate world is one big racket ? Sell bonds, wait for an economic “recovery”, stock price goes up, executive management makes money on stock and declares victory and exits before the next economic slowdown. One big ponzi scheme.

  • less

    Take solace in the fact that the Age of Aquarius (look it up) is sooo finally upon us, and the global village is at hand. Vote Obama. Impeach Bushitler. Everyone and everything will soon be free.

  • Casual Observer

    all spending halted at nortel

  • less

    This could be why:

    “The big powers are going down,” Ahmadinejad told foreign ministers of the Nonaligned Movement meeting in Tehran. “They have come to the end of their power, and the world is on the verge of entering a new, promising era.”

    Yay!

  • less

    This could be why:

    “The big powers are going down,” Ahmadinejad told foreign ministers of the Nonaligned Movement meeting in Tehran. “They have come to the end of their power, and the world is on the verge of entering a new, promising era.”

    Yay!

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