Smooth integration of Newbridge puts Alcatel on right path to growth

Executives at the newly merged Alcatel SA and Newbridge Networks Corp say the visible results from their integration will emerge in December when the new entity introduces next generation products. The marriage of technologies and products from the Kanata ON manufacturer and its new parent is producing new wireless products that executives hope will strengthen its position in the North American market. What Alcatel kept in KanataRadio/RF SolutionsIP internetworkingChannelization, network and service managementResearch & developmentTony Jenkins, assistant VP product management broadband wireless access for the Carrier Internetworking Division (CID) at the former Newbridge plant, estimates sales volumes will start taking off by next March and April. Alcatel executives are putting a positive spin on their merger with Newbridge, saying the integration went through better than they had expected. They cite a project on which the two telecommunications equipment manufacturers had collaborated that familiarized both teams with the other’s equipment. Alcatel executives told Report on Wireless in an interview at the Wireless Communications Association International conference last month in New Orleans that the expanded Alcatel now has all the ingredients to go head-to-head with the other major players. One of the most important assets Alcatel gains from the acquisition is a formidable presence in the North American market, something that had alluded it before. Jenkins says Alcatel now has the best breed of wireless technologies and additional target markets needed to effectively compete in North American with the likes of Cisco Systems Inc, Nortel Networks Corp and Lucent Technologies Inc. Executives say they have already landed a few contracts since the integration. "So it proves that what we’ve done has been successful," says Jenkins. "So we’re expecting revenue to carry ongoing and not to take that normal sort of dip that happens." Prior to the purchase, Newbridge bragged that its next generation switch could handle data rates in the 450 Mbs range. While it remains to be seen whether the new Alcatel product will have the same capabilities, Jenkins says it’s an "extremely powerful solution with high-bandwidth capability, a high-density modem, low-cost CPE, very flexible radio RF solution and very good network management solution." Supply chain problems that plagued Newbridge for two or three consecutive quarters last year have also been rectified, adds Jenkins. Kanata plant to play strategic role in the future While Alcatel’s wireless operations are very much global with shops in Kanata, Sunnyvale CA, Madrid and Paris, the former Newbridge flagship manufacturing operation will continue to play a significant role in product development and production. Jenkins says the Kanata plant will be heavily involved in radio and RF solutions because of Newbridge’s prior success in the multi-carrier market in the U.S. It will also be critical to all IP internetworking development due to all the backbone Newbridge has had in that area. He adds that development into different channelization and network and service management will also be centered in Kanata. Canadian facilities will continue to maintain a significant presence in terms of R&D in light of its attractive tax credits. But as Jenkins points out, it also has to do with the fact that Canadian employees make less than their U.S.-based counterparts. He says that comparable positions in Sunnyvale and Kanata will have as much as a US$50,000/year difference in salary. Simply said, it makes sense to conduct R&D in Canada, he adds.

Smooth integration of Newbridge puts Alcatel on right path to growth

News | 08/21/2000 4:00 am EDT

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