Nortel News: Buoyant IP Growth, Vonage Suit, Haydon Departs, Is Optical Back?

According to a Dell’Oro Group report, shipments of IP lines in the second-quarter climbed 30% due to strong demand from small businesses, which is good news for suppliers such as Nortel (NT), Avaya (AV) and Cisco (CSCO) that have been targeting the small business market with VoIP services.

“Vendors continue to broaden their VoIP offerings to small and medium businesses,” commented Alan Weckel, a senior analyst with Dell’Oro. “Vendors, such as Avaya, Cisco, and Nortel, continue to expand their development and sales efforts in order to better target smaller businesses with VoIP solutions. With recent product introductions and a renewed focus throughout the industry to sell VoIP solutions to small businesses, the migration to IP will continue to accelerate.”

Dell’Oro said Nortel continues to be the IP line shipment leader globally, while Cisco has surpassed Avaya in terms of line shipments in North America.

Vonage Suit
Look, Vonage (VG) is suing someone again. This time, it’s Nortel.

Vonage is seeking to invalidate three patents to manage telephone data. This comes as Nortel is trying to sue Vonage for infringing the patents. It must be fun to be a lawyer!

Haydon Departs
It looks like the lure of being the top dog has promoted the departure of Nortel’s chief procurement officer. vice president and general manager, Network Partner Solutions, Global Services

John Haydon, a 25-year Nortel veteran who was promoted to the position early last year., is leaving next month to become president and COO of Breconbridge Manufacturing Solutions, a large electronics manufacturing and design company based in Ottawa.

UBS said it considers Haydon’s departure “marginally negative for Nortel, particularly from a sentiment perspective as his departure adds to the list of recent executive departures at Nortel. Since YE2006, Nortel has lost its Chief Ethics Officer, CFO, Regional Presidents for the U.S. and CALA, and VP of IR - not an encouraging sign for a company in the midst of a critical transformation.”

Times change, people get restless and people move on to other opportunities to pursue career and personal goals.

So goes it at Nortel, which has seen a flurry of executive changes recently - a good number of people who worked for Nortel before CEO Mike Zafirovski took the reigns in late-2005.

As far as Nortel concerned, the departures are just a fact of corporate life that will not hold back its recovery plan.

“Over the past year, Nortel has attracted many world-class executives from companies such as GE, IBM, Juniper, Bell, Lenovo, etc.,” spokesman Mohammed Nakhooda told Reuters. “”The departure of a small number of Nortel veterans will not slow the rapid pace of progress taking place across Nortel as the new executive team focuses on rebuilding this great company.”

Is Optical Back?
WOW!’s decision to purchase optical equipment from Nortel isn’t huge news given WOW! is a small cable/phone/high-speed Internet service provider in Denver but it is another sign that the optical market is coming back to life after some terrible days after the telecom boom ended.

For all the fiber installed during the dot-com boom and the suggestions much of it is still unlit, there is little doubt demand from optical equipment is coming back as consumers demand bigger pipes to send and receive data-hungry services such as video and IP-TV.

As Tom Buttermore, general manager, cable solutions with Nortel, said in the press release: “The consumer appetite for real-time services has never been higher, placing a heavy toll on networks that deliver everything from voice and data to video-on-demand”.