Nortel mulls aggressive expansion push in Asia

Nortel Networks plans aggressive growth in the Asia-Pacific region over the next two to three years, hoping to capitalize on demand for network gear and services in rapidly growing markets such as India and China, a Reuters report said.

Last year, the region accounted for 16% of Nortel's total revenue.

The company wants to see that jump to between 20% and 25% in the next several years, Francois Lancon, Nortel's executive in charge of Asia-Pacific, quoted by the Reuters report said.

However, the company is set to face difficulties, according to analysts.

'It is a laudable goal,' Ed Snyder, an analyst at Charter Equity Research said. 'It's going to be very difficult to do.'

Indeed, Asia is ground zero of the bare-knuckles cost competition that Nortel and some of its peers have blamed for dented revenue lines, poor profits and tight margins.

Even Lancon described the endeavor as 'pretty ambitious,' the Reuters report said.

Nortel, North America's biggest maker of telephone equipment, has picked faster network technology, next-generation WiMax wireless products and communications that integrate the phone closely with desktop computers as among its big Asian bets.

To be successful, Nortel is trying to set itself apart on technology and long-term value -- instead of going head-to-head on price with low-cost Asian vendors such as Huawei Technologies.

'If you are competitive in Asia, you're competitive in the rest of the world,' Lancon further said.

Indeed, a few recent wins seem to suggest the company is holding its own.

Last week, Southern Cross Cables, which provides internet connectivity between Australia, New Zealand, Fiji, Hawaii and the US mainland, chose Nortel's new 40 gigabit technology, which lets it provide four times the bandwidth it had offered previously.

The company also announced last week that China's water resources ministry had picked Nortel to provide voice, data and video communications products that link employees in 31 provinces.

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.