Nortel emerges from 'hell years' with fire in its belly

Nortel has emerged from what the company's Asia Pacific president John Giamatteo describes as the "hell years" with real fire in its belly.

"This is the new, aggressive Nortel; with $3.7 billion in the bank we have never been better positioned to take market share," he said claiming that the fog surrounding its year-long accounting probe with the Securities Exchange Commission (SEC) is over.

Speaking yesterday at Nortel's annual nPower partner event in Perth (WA), Nortel's enterprise networks president Malcolm Collins said the company will release its Q4 results in the next few weeks and "it will all be behind us".

The focus now will be taking on rival Cisco.

"In today's world more than 50 percent of enterprise buying decisions will be in the converged solutions space; we have the technology to focus on this sweet spot," he said.

"Cisco comes from a data infrastructure perspective, when it comes to voice it is not there yet. Avaya is turning into a services company and Microsoft is probably the new looming giant or competition for us."

Admitting Nortel hadn't been aggressive enough in the past, Collins said Nortel will go after Cisco's installed base.

"This isn't about 3Com or Foundry, it is about Cisco. Those smaller guys aren't going to make it; there are too many players in the market," Collins said pointing to a round of consolidations over the next 12 months.

"Can they survive in a converged world? Only Nortel has the technology to really go forward."

By midyear, Collins said Nortel will have an acquisition strategy of its own and plans to have 20 percent share of the converged voice market by 2007, 15 percent of the converged data market, and to be the global VoIP leader.

"In the past we were too reserved, we didn't go after our competitors but we are not going to let them set the ground rules in the marketplace anymore," he said.

Collins said some competitors may describe 2004 as Nortel's darkest hour when the company lost its CEO and struggled with the accounting probe, but he says it was their "finest hour".

"It was our best year in enterprise for five yours; we were going through the toughest time as a corporation but we grew," he said.

"The lines are blurring between voice, data, video and next-generation apps such as multimedia which is good news for us; we are in the best position we have ever been; we just have to execute on that strategy."

On a global scale, Asia is well positioned for future growth and is the fastest growing region worldwide.

Describing Asia as the growth engine of Nortel, Giamatteo said Asia is growing at 35 per cent compared to about 8 percent elsewhere.

As a result, he said the region is getting "an unfair share of investment".

"Last year business grew 20 percent in enterprises across the region with India leading the pack," Giamatteo said.

"About 50 cents of every cap-ex dollar spent in Asia is spent on wireless and we have 12 VoIP networks installed across the region."

* Sandra Rossi travelled to Perth as a guest of Nortel

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