NL Short Takes

Nortel Networks to delay financial results releaseBrampton ON-based Nortel Networks Corp. has decided to delay releasing its fourth-quarter and year-end 2005 financial results after the company said it was going to restate certain financial results for the 2003 and 2004 fiscal years and the first nine months of 2005. The company noted in a news release that there will be negative revenue implications of $157 million and $77 million in 2003 and 2004 respectively. As well, net earnings/loss will be negatively affected by $91 million for 2003 and $93 million for 2004. There will also be a negative impact on revenue prior to 2003 and Nortel expects that to be $470 million on revenue and $99 million on net earnings/loss levels. "Our priority is to have accurate financial information. Although the need to restate certain financial statements is unfortunate, it's the right thing to do. This revenue is real - it was recognized in the wrong periods. The restatements do not affect the Company's cash position," said Mike Zafirovski, Nortel's president and CEO. "The extensive contract review we undertook in 2005 underscores our commitment to ensure a solid foundation for this Company going forward. Though it will take time, our unwavering commitment is to be among the top companies in the world in corporate governance and business and financial controls remains." Speculation about further investigations into accounting practices were debunked by Nortel. The company noted that the need to restate financial results was the result of a contract review program. The struggling telecom equipment maker has also unveiled details of a plan to increase shareholder value through "business transformation, integrity renewal and growth imperatives." Nortel hopes, as part of this plan, to increase margins by $1.5 billion and save an additional $200 million. "We embarked on this marathon in December 2005 when we initiated the first phase of this plan. We're making steady progress and our goal is to realize the full impact of our actions in 2008," said Zafirovski.Nortel has been battling the accounting demons for the past couple of years and has had to clean house of its previous management team. Network Letter will have more on the transformation of Nortel under Zafirovski in an upcoming issue. BCE takes greater control of telecom destinyCanadian communications and media giant BCE Inc. is taking greater control of its telecom destiny. The company is spinning off its rural telecommunications operations into an income trust, which would combine the wireline operations of Aliant Inc. and Bell Nordiq. The new income trust, which still requires approval from a variety of regulators, would have about 3.4 million local telephone lines and 400,000 high-speed Internet customers in Ontario, Quebec and the four Atlantic Canadian provinces. In return for handing over its rural telephone lines to the new entity, BCE gets 100% control of Aliant's mobile wireless operations. By combining the regional wireline operations of Aliant and Bell Nordiq, the new entity will have greater economies of scale to compete and operate in the market, BCE CEO Michael Sabia said during a conference call discussing the transaction. This new company has a significantly better long-term future than if all of these regional operations were kept separately, he added. "We are convinced that this is best the way to provide telecommunications services in regional markets," he said. The new regional telephone company will be double the size of Aliant, and in terms of revenue, it will generate about 40% of Telus Corp.'s revenue and will have a revenue base 60% larger than MTS Allstream. This news follows on the heels of a pronouncement by Sabia during BCE's business review conference on February 1. During the half-day event, he said Bell would spin out its regional telephone line business into a trust as a way to generate greater shareholder value. Network Letter will have more on this in an upcoming issue. Fluke Networks introduces four new productsMississauga ON-based Fluke Networks has introduced four new optical test products that are designed to help technicians and contractors measure loss and power levels, locate faults and polarity issues, inspect connector endfaces, and many other tasks. "Whether they are responsible for installation and maintenance of single-mode fiber, multimode fiber, and even copper cabling, one of these kits will provide the right selection of tools to test and troubleshoot cabling infrastructure," Brad Masterson, product manager for Fluke Networks Canada, said in a news release. C-suite federal priorities to be presented next weekThe Gandalf Group's David Herle will present the results of its C-Suite Quarterly Survey on March 20 at the Economic Club of Toronto. "The survey looks at federal priorities for the new government and will include findings on the state of the economy, US relations, policy priorities and expectations for the new federal government," reads a media advisory. CEOs, CFOs and COOs from Canada's top 1,000 companies were surveyed. SaskTel deploys uReach Technologies messaging platformSaskTel is taking its messaging services to the next level by deploying an integrated messaging platform from uReach Technologies. "This deployment marks the end of a legacy messaging transition for SaskTel that began in early 2005," reads a March 14 news release. The new solutions will power wireline, wireless and VoIP voice messaging services for SaskTel customers and it will also allow the provincial incumbent telephone company to leverage a single, network-agnostic framework to develop new next generation services and bring them to market quickly and economically. "uReach Technologies was the only vendor that could deliver the application functionality SaskTel required while meeting the technical challenge of aligning with SaskTel's Network Evolution Vision from a single, converged, infrastructure," said Robert Watson, SaskTel president and CEO, in a news release. Rogers improves Internet download speedsRogers Communications Inc. is giving its high-speed Internet customers a 60% improvement in Internet download speeds, the company announced on March 14. The Rogers Yahoo Hi-Speed Internet Express service has had its throughput rates increased from 3 Mbps to 5 Mbps. Rogers plans to roll out the service to customers over the next couple of weeks, and the increased speeds will be made available to subscribers at no additional charge. Singapore building national broadband networkSingapore is building a national broadband network that it says is required to maintain the country's economic competitiveness. The network will feature speeds of 1 Gbps or more than 500 times faster than the 2 Mbps speeds which are most common around the world. The network will be carrier-neutral. While the private sector is expected to build and operate the network, the government will contribute funding to kick-start the project. The Singapore government has tabled an aggressive timeline with respect to the network. The government expects to award the project to a private sector partner early in 2007, which will then be required to complete at least 50% of the network within three years with the entire project completed within five years. TWU leadership fight heads to the courtsThe Telecommunications Workers Union (TWU) is wracked by an internal battle for the control of the powerful telecom union. Two weeks ago, membership dealt a major blow to the leadership by issuing a non-confidence vote of the previous executive committee, including president Bruce Bell. CASP fights back against ITS CanadaThe Canadian Association for Suicide Prevention (CASP) isn't backing down from an abuse of CRTC rules allegation from the Intelligent Transportation Systems Society of Canada (ITS Canada). "The commission is the master of its own procedure and, thus, always retains the discretion to issue a public notice in respect of a Part VII application when it considers that the application raises broad policy issues that affect a wider range of interests than represented before it in the Part VII process," reads a letter from CASP. The suicide prevention association and its partner groups are getting support from other organizations for the allocation of the 511 code for crisis intervention. "A nation-wide 24-hour distress line is a much-needed resource for individuals in crisis that we enthusiastically support. The three-digit number 511 will facilitate quick dialing especially since it is easier to remember than a 1-800 number or other alternatives," reads a letter from Distress Centres Ontario. Network Letter will continue to monitor the dispute regarding the allocation of the final three-digit code.

NL Short Takes

News | March 15, 2006

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