Another 40G Customer

Margins. Margins. Margins.
Under Philip Morin's leadership, the Optical margins were the worst compared to other business units. Despite Philip's appointing one cost reduction director after the other for many years, he failed to solve the high cost of his products. None of these directors were fired by the way (including Mr. Morin himself)

Technology is great, but prices and margins are not. that is why all these wins are contributing very little to the company and that is why selling MEN is the option.

The excuse for margins being poor was always: 'MEN is a 'growth engine' for the company'.

'If' MEN is sold this excuse will go away and it will be interesting to see if MEN can adapt to a more profit centric attitude.

good news. hopefully high profit margins. but it does not say how large a network or number of elements or $$$. Mediacom network looks like 3 chassis and a few blades. I cannot believe its a massive network they way the release sounds. Surf looks like a small deployment as well.

So good news but dont think its major stuff. Look at huawei deploying 40g. they are winning big deals. also they now have traction in north america.

News Flash.
Huaweii 40G Gear does not work.
They sell it cheap and the customer is getting screwed.
Ask Around.
Huawii are not winnig big deals in North America.
They are in Asia (home grown communist daddy protecting them and covering for their thievery, poor quality of service, patent rip off/infringment, copyright theft and technology theft) and in Europe for convenience.
Same with NT LTE which is head and shoulders above everyone else.
CDMA is holding its own but they need some big new major contracts.
The rest at NT is Toast. Burnt Toast.

the 40g annoucement from SK is probably bigger, press release said it's 88 40g wavelengths. also for every 40g deployment, it's usually a combination of the shelf, blades, photonics and amps etc. You're saying Huawei's 40g are winning big, where are the numbers?

Huawei is #7 in North America and climbing. Although I hate them, they will be #3 soon. Its only a matter of time before they penetrate the top tier accounts. they won a big deal in Russia. go check it out.

Nortel folk will never change. always thinking technology is better and people will come running to you.

its marketing.
its sales.
its good leadership that can execute.

Nortel has none of the above. your sales and marketing folks cannot even defend their solutions. What happened to that PBT stuff? Flushed down the toilet I hear.

Quality of service. Yeah Nortel overbloated processes screw up their customers with people in infinite number of teams who cannot deliver. Lets not open a can of worms.

The fact is Optical technology is head and shoulders above Huaweii. Why don't you go check that out.
Huaweii marketing...Red communist flag, espionage, copycat.
Huaweii sales..Communist dictatorship ensures that in Asia.
Leadership...Communist Party. Do what we tell you or die.
PBT and 40G are worlds apart.
Huaweii will never be allowed into the United States in a big way.
Or Canada for that matter.
You can count on that.

Telco customers will continue to buy MEN optical products. They have already analyzed, tested the product, and funded the purchases. Telcos realize that they will receive support whether MEN is part of another company or part of a post chapter 11 Nortel.

There is no need to from any negative spin on the sale. However, this does not change the dynamics of Nortel's head rush descent into bankruptcy. Nortel has some valuable asstes, intellectual property, product lines, etc. Its just that these things will be owned by 3rd parties, Nortel's bond holders, or by a post bankruptcy Nortel - and there will nothing of value left for the current share holders.

Whay do I NOT find it surprising that AAN is not reporting that Japan's KDDI has selected Nortel and Hitachi for a ground breaking LTE mobile Broadband project?

When 'Project' transitions into 'Deployment(s)' then it should be noted...--bb

it's not a "project", it's a contract for a "deployment"

I do think that one is more important

http://news.cnet.com/Fiber-optics-may-speed-PCs/2100-1001_3-274632.html

October 18, 2001

Connecting components is only one application for fiber. Over the longer term, possibly 10 years, optical interconnects could also work their way into processors themselves, where copper wiring is just starting to become standard.

2 more years... 2 more years...

heh, fiber optic backbones are also a hot area for Nortel....never mind the avatars =)

I love Nortel's press releases, they are a riot,

In all fairness, 40G technology certainly deserves merit short of power to save the day though.

PROTO, please insert negative spin here: "


"

Thanks!

Orders are good news, hooray, go Nortel go but it's aggregate indicates it is headed straight to zero in a hand basket where this alone is no where near enough to save the day.

If you insist, I would question who makes more, the customer in savings or Nortel where I question how high a ticket item this is and its margins, given the customer does not have to replace a lot of equipment as a selling feature migrating to 40G. =)

So they sell something but are they generating substantial orders given how they dearly pay for revenues like PEC with their most expensive yet least productive R&D?

Will this make up for a fraction of the lost business in CDMA decline that accounts for almost all their earnings to play catch up with? Even if they are forced to keep MENs because they can not sell it, for the cash they desperately need, ill affording more necessary layoffs, how many customers already went on strike or froze orders to out weigh this.

And after so many petty railway orders, apartment buildings, their Chapleau Legion think tank, tribe in mall press releases, etc., I think most have become wary to their hype and crying wolf to what Nortel says in turnaround time. single digit growth to loss midstream, buying opportunities, etc. lacking credibility

Now where are all those really big orders, the size of BSNL and such...going to others comparing their peers growth vs. their decline... oops

Nortel buys PEC for $448M US and is worth way less than half as much, Cisco buys Scientific Atlanta for billions successfully,. See the difference? And here we cheer 40G migration which save the customer not having to replace tons of equipment, saving the customer but how much does Nortel make or loss less in this case... as it loses more elsewhere .

So there is good news and their is bad news. You decide which outweighs which =)

Fundamentals are outright scary at this point. Stock is down 10% so far this morning, if they had anything it would not be trading at a fraction of when last neared folding at $4.30 adjusted.

I have added my 2 cents worth, perhaps some one can enlighten us with some positive spin here, perhaps making MENs more enticing to sell to buy another day? MENs moving towards becoming profitable? Anyone? Anything? =)

Yes, we all know you think Nortel is doomed. I think your post here is a bit irrelevant and a bit uneducated. This post isn't about Nortel on an aggregate, it is about its traction with the 40G program.

I think you miss the point of the 40G product. It isn't the equipment that customers don't have to replace, it is the Optical Fiber. Although it may be a more profitable business model then what they have now; Nortel isn't in the business of laying Fiber.

The value of the 40G program and MEN go hand and hand; 40G does well, MEN gets more attractive for purchase. Traction with high tier customers, like Telus, gives creditability to the 40G program and sets itself up for bigger orders/contracts (i.e. AT&T). If Nortel is successful in dis-investing in MEN, it will give it some much needed cash that will help it get through these tough economic times.

This post isn't about Nortel on an aggregate, it is about its traction with the 40G program.

I think you miss the point of the 40G product. It isn't the equipment that customers don't have to replace, it is the Optical Fiber. Although it may be a more profitable business model then what they have now; Nortel isn't in the business of laying Fiber.

The value of the 40G program and MEN go hand and hand; 40G does well, MEN gets more attractive for purchase.
=====
re
look how stupid you post sounds...
If Nortel has so many 40G customers, why the 40G customers don't buy Nortel's 100G solutions?
Why?
Don't hide yourself under a rock,... answer that, why Nortel's customers don't buy 100G solutions right now, right away?
I have all the answers, so you can stay under your rock!...

Looks like you are the one staying under a rock...

"You" always have all the answers, don't you, you self-praising, self-worshiping, all-seeing oracle of nothing?

He is just TROLLING to try and get some value for the $$ he lost from a bad investment decision.

acually...look how stupid 'you' post sounds

The 40G product at Nortel is very fresh. Although the product has been in development for over a year, it has only recently been released as a product offering. The sales/# of customers for this product haven't peaked yet.

You don't seem to have the answer to: 'Why don't customers buy 100G now?' - Because the answer is simple. The product offering is still in development. Nortel has a significant lead on their competitors in not only the 40G world, but also in the 100G world.

Nortel is currently offering a full line of 40G products and with it comes a clear path to migration to 100G in the near future. Customers of the 40G product may or may not want to upgrade their networks to the 100G product line - either way, it is a valuable option for them to have.

Word on the street is nobody is buying 100G from anybody because nobody needs it right now. Apparenlty nobody but Nortel have a 100G solution that actually works and delivers on what it is suppose to do.
Apparently Customers do need 40G now and apparently nothing comes close to the Nortel 40G Solution.
Apparently a number of companies (mainly chinese imposters/cheats/schemers/scammers) claim they have a 40G or 100G solution but it doesn't work worth shit and they mock it up to give the impression that it works when in fact it is at best at 10G solution with lots of noise, dispersion, attenuation and general crap Quality of Service. It seems the only two sure bets at Nortel these days are 40G/100G and LTE. You would have to be an idiot to not know this. All over the papers, news, tv and shown by contract signings. CDMA I suppose is still making money but it is fast becoming an Asian commodity and they are giving all the contracts to the chinese. If Nortel are smart they will sell this thing while it is still an asset. Perhaps they are already in the process of selling CDMA? After what has been mentioned the rest is basically slim pickings with the exception of their coveted Enterprise division (not sure if it is really coveted). Lots of old legacy stuff and their PON venture is too little too late with too much competition. The rest of the menu at NT is dead or doesn't know it yet. I think the only answer you have is what you do in your pants?

Word on the street is nobody is buying 100G from anybody because nobody needs it right now.

Which proves how stupid people can be.

Yeah!
Bad news always makes me want to buy, for some mysterious reason.

Bad news has depleted 99% of this stock's value. Why buy more?

If you want even more bad news, wait until Q4.

Buying on bad news for mysterious reasons does not sound like good investment advise. I think you should clarify this mystery considering highly liquid stocks like Nortel with viable companies generating earnings unlike Nortel. Nortel cheerleaders quote yet misinterpret Mr. Warren Buffet's premise in what bleeding in the streets means as opposed to on palliative care. =)

Warren Buffet has been buying on bad news for over 50 years.
" In short, bad news is an investor ’s best friend. It lets you buy a slice of America’s future at a marked-down price. I can’t predict the short-term movements of the stock market. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up."

Warren Buffet has been buying on bad news for over 50 years.
" In short, bad news is an investor ’s best friend. It lets you buy a slice of America’s future at a marked-down price. I can’t predict the short-term movements of the stock market. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up."
======
re
yaya
You did not get it.
You can buy a Good stock on bad news but not a POS stock one step from CH11!
Why would you come here and recommend buying NT now?
If NT had any value there would be plenty financial institutions ready to get 100% outstanding shares for $300 mill!
You are proven to be just a pumper to fool others!
Busted!

I believe the basic rule is to take an educated risk by buying when times are bad, sell when times get good.

Look at how the - ahem - secular bear has impacted NT vs. its competitors. A rising stock is oft a good stock, a flatlining stock could mean the company is going nowhere, or that its keeping its head above water given the circumstances.

But a 1.5 year peak preceded by a dividend-free flatline and followed by x years of continous depreciatiion?

I dunno..

I understand the basic rule. Don't read too much into my ID. Blame my grade 12 economics teacher from what seems like many, many years ago!