Nortel, Huawei In Broadband Access Venture

Nortel is teaming with Chinese communications equipment maker Huawei Technologies Co., Ltd. to develop and market broadband access equipment. As part of the deal, Nortel will also be able to

February 1, 2006

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LONDON — Nortel is teaming with China's Huawei Technologies Co. Ltd. to develop and market broadband access equipment. As part of the deal, Nortel immediately will be able to sell most of Huawei’s existing lineup for broadband access.

The Canadian group will hold the majority stake in the venture, which will be headquartered in Ottawa.

Negotiations are under way, and the companies expect the combined group to start operations in the third quarter. Development of advanced access gear has already started, they said.

The aim is to combine Huawei’s broadband access technology with Nortel’s voice and broadband networking know-how to create a range of advanced DSL and fiber-to-the-home products that will offer triple-play services to operators worldwide.

Nortel sees the venture as part of the business transformation strategy it outlined last year for creating business opportunities.The joint venture is an opportunity to "aggressively target and win share in the rapidly expanding ultrabroadband market," said Mike Zafirovski, president and CEO of Nortel.

Quoting estimates from a recent Dell’Oro Group study, the companies said total revenues for the global broadband access equipment market approached $9 billion in 2005, including $1 billion for Internet Protocol DSL access multiplexers, a segment that is forecast to reach nearly $2 billion by 2008. Huawei is currently the world's top-ranked IP-DSLAM vendor.

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