Nortel CEO revamps plans on development spending

22.05.2006
Nortel Networks Corp. CEO Mike Zafirovski last week provided an update on his first six months at the company, saying that he plans to increase development spending on several technologies while dropping or scaling back nine product programs. Six product initiatives are being canceled, and three will be reduced in scope. Nortel identified only one of the six being eliminated: an edge router for service providers.

The cuts are part of a wider effort to chop Nortel's spending by US$1.5 billion over the next three years in order to help stop an ongoing series of losses, Zafirovski said.

However, Zafirovski also said that he's setting up a unit focused on metropolitan-area networks and that he plans to devote additional funds to the development of WiMax products, as well as IP multimedia subsystems and video networking technology.

David Dooley, treasurer of the International Nortel Networks Users Association Inc. (INNUA) in Chicago, said Nortel hadn't given him details on the products being dropped. But, he added, Zafirovski's announcement isn't a big cause for concern.

"To the average user, none of the discontinuances will be major," Dooley said. "I can assure you that if they were major products people are clamoring for, [Nortel] wouldn't be discontinuing them."

Dooley, who is director of telecommunications and special projects for the Plano Independent School District in Texas, said he wants to hear more about the affected products and Nortel's overall direction when Zafirovski meets with INNUA members at the user group's annual conference in San Diego on June 11.