Users to benefit from Cisco vs Cabletron pricing war

Cut-throat competition in Australia's networking industry is fuelling a fierce war of words between networking heavies Cisco and Cabletron, with users billed as the ultimate victors.

Ian Fewtrell, Cabletron's managing director, said Cisco's aggressive pricing tactics are shaping up as one of his company's greatest advantages.

In an appeal to Cisco's user base, Fewtrell said the moment loyal Cisco customers enter negotiations with Cabletron, Cisco is guaranteed to intervene with heavy discounting.

"That has to be a benefit to the end user," he said.

Fewtrell denied he is feeling disaffected by Cisco's strategies, but believes the situation is creating new advantages for users seeking the most competitive networking deal.

"My view is not sour grapes at all," he said. "I understand the Cisco strategy, but what I am saying is talk to me, you can only win."

Fewtrell said Cisco's strategy is also "good news" for Cabletron because it aids his efforts to win over Cisco's bread and butter customers.

Fewtrell cites Cisco's relationship with Telstra as a classic example of the company's strategy.

He said Telstra contributes between $20 and $25 million to Cisco revenues each year. However, he claims profits from Telstra were recently used to account for losses Cisco incurred through entering an extremely competitive deal with Ernst & Young. "Ernst & Young is effectively subsidised by Telstra," he claimed.

Gary Jackson, Cisco's managing director, flatly rejected Fewtrell's statements, reporting Cisco maintains a healthy relationship with Telstra. "He (Fewtrell) has no idea of our fundamental pricing policies."

Jackson suggested Cabletron is simply responding to tough market conditions. "It is a difficult market [for Cabletron] to be number 5, 6, or 7," he said.

Describing the issue as "complete nonsense", Jackson said there is "nothing new" about Cisco's pricing policies.

"We pay no more attention to Cabletron being in a deal than anyone else," he said. "My view is I think Cabletron should spend more time selling Cabletron than trying to rattle the cages of the press.

"Maybe someone should tell him about Ford pills, they help with constipation," Jackson quipped. "You can quote me on that."

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