Global leader: Mike S. Zavirofsky, president and CEO
Local leader: Mark Stevens, president, Australia and New Zealand
Core activity: Communications
Revenue: US$10.95 billion (FY07 ended December)
Key customers: APN News and Media, JB Hi-Fi, Land Information New Zealand, Australian Department of Defence, Metito (Dubai), Bell Canada, China Cable Television Network, Asus, Kalgoorlie Consolidated Gold Mines
Canadian networking equipment maker Nortel has been under pressure for some time, unable to loosen industry leader Cisco’s choke-hold on the market and also contending with tighter competition from relative upstarts like China’s Huawei. For the past year or so, the firm has pursued a rigorous ‘transformation’ programme that has resulted in the shedding or redeployment of thousands of jobs and trimmed expenses in virtually all segments of the enterprise. Initial results seemed promising, with margins, cash flow and revenues (by some measures) all expanding in the most recent financial year.
Under normal circumstances, 2008 could have been the year where Nortel returned to health. Unfortunately these aren’t normal times, and the vendor may be entering its most difficult patch yet. Already suffering the impacts of a turbulent global economy, Nortel recently revised targets sharply downward and warned it may have to sell some of its best assets to stay afloat — the company has already decided to divest its carrier Ethernet and optical businesses — to smooth the delivery of multimedia over broadband lines. There are even rumours that a deep-pocketed player such as IBM may swoop in to buy Nortel in its entirety.
Despite its current troubles, Nortel would certainly be a worthwhile addition to any company’s stable and (if it weathers the current storm) will most likely fare just fine on its own. It continues to strike sizeable deals with large enterprise customers, recently signing up China Cable Television Network to smooth its digital broadcasting.
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