Nortel News: Hamilton Seeks Dismissal, Vonage Suit, The Future of Internet, Good Year For Wi-Max

Hamilton Seeks Dismissal

Douglas Hamilton, who is among the dozen ex-Nortel (NT) employees, who allegedly manipulated the company’s finances to trigger a lucrative bonus scheme, has filed a motion in a U.S. court to dismiss all charges levied against him by the SEC.

The filing follows similar moves by ex-CEO Frank Dunn and ex-CFO Doug Beatty.

Hamiltion, who was a vice-president of finance with Nortel’s optical unit, said the SEC charges aren’t applicable against him because he was not based in the U.S. and he was taxed in Canada. He also denied being part of any fraudulent activity meant to deceive investors or violate international accounting laws.

And - and this is a good one - Hamilton claims he’s not an accountant but, rather, by training an engineer who never had any formal financial training. If anything, it makes you wonder how he became a v.p. of finance.

Vonage Suit

You’ve got to love everyone’s favorite VoIP whipping boy: Vonage (VG).

On the heels of settling a lawsuit involving Sprint (S) for $80-million, Vonage is now being sued by Nortel, which filed a lawsuit in U.S. District Court alleging Vonage is infringing on 12 Nortel patents related to telephone management solutions.

“Defending our intellectual property rights is a top priority for Nortel,” said Nortel spokesman Mohammed Nakhooda. “That’s why we are seeking damages and to put an injunction on the use of our technology with respect to Vonage.”

Nakhooda told Bloomberg News that an injunction would prevent Vonage from using technology that relates to 911 and 411 calls, as well as its “click to call” feature, Nakhooda said.

Vonage’s other lawsuit battles having involved Verizon Communications and AT&T. Vonage sued Nortel in August to invalidate three patents to manage telephone data.

(Hat tip to Russell Shaw)

For more, check out Motley Fool and BetaNews.

The Next Billion Internet Users

Michael Geist had an interesting column in the Toronto Star last week looking at how the Internet is going to change when the next billion users in places such as India, China and Africa join the online party.

Here’s an excerpt:

The next billion may also use different technology to access the Internet. The recent introduction of the XO laptop – previously known as the $100 laptop – demonstrates how the developing world has different requirements and how the technology industry will have to adapt to those changing environments. Indeed, flashy, high-end laptops with large screens, fast DVD players and enormous hard drives may give way to devices that are energy efficient, sturdier and better suited to users with varying levels of literacy.

The operating systems and software installed on those machines may also be different. Microsoft and Apple may have been the preferred choice for most of the first billion, but the next billion is far more likely to use open source software alternatives that are free and offer the chance for local customization.

Not only will the devices be different, but the next billion will employ alternate modes to access the Internet. Widespread broadband may be too expensive to install in some developing communities, leading to greater reliance on wireless and satellite-based connectivity. Those users may use mobile devices as their primary way to connect to the Internet, experiencing slower speeds of access and forcing e-commerce companies to adapt to a changing marketplace.

For telecom equipment suppliers such as Nortel, doing business to serve the next one billion Internet users will be a huge opportunity but a strategic challenge as well.

Some of the questions that will needed to be answered include:

1. What kind of networking technology will be needed to meet the needs of these new online users? Will wireless (4G, 5G, 6G, etc.) be how the Web is primarily accessed or will traditional broadband be part of the mix?
2. What kind of speeds will these users need; what kind of speeds can be delivered?
3. Will the profit margins be high enough to create a viable business?

What do you think? What are going to be the crucial strategic considerations for telecom equipment suppliers hoping to serve the next billion?

Good Year For Wi-Max

For all the excitement about Wi-Max, 2007 has been a good, but not great, year.

Sprint got everyone excited with plans to build a $5-billion, nation-wide network in the U.S. but that strategy is now in question after its CEO stepped down. In the third-quarter, Infonetics Research said worldwide Wi-Max sales climbed a mere 6% to $206-million, which could be described as disappointing given all the hype. Meanwhile, worldwide unit shipments of fixed and mobile WiMAX equipment rose 16% in 3Q07.

Still, Infonetics is looking for Wi-Max to see annual growth of 87% between 2006 and 2010 as more carriers embrace the fourth-generation technology. This is good news for equipment suppliers such as Nortel, Intel (INTC), Samsung, Ericsson (ERIC), etc., which are banking on Wi-Max to fuel sales growth.

Some of the other interesting tidbits within the Infonetics report include:

• The number of worldwide WiMAX subscribers (fixed and mobile) is expected to skyrocket to close to 60 million in 2010, led by the Asia
  Pacific region
• Unit shipments for access service network [ASN] gateways, which aggregate traffic from mobile WiMAX base stations, jumped 36% quarter over quarter
• Alvarion continues to lead in fixed WiMAX equipment revenue share in Q3/07, followed by Airspan and Aperto Networks
• Outdoor mesh network access node shipments are up 7% worldwide in Q3/07; revenue is flat