Nortel

Nortel Networks, commonly known as Nortel, is a telecommunications equipment manufacturer headquartered in Canada.

History

The company was founded by Alexander Graham Bell in Brantford, Ontario as the Northern Electric and Manufacturing Company Limited, the name under which it was initially incorporated in 1895. The company made telephones, wind-up gramophones, and street call boxes for police and fire departments.

In 1976 it assumed the title Northern Telecom Limited. At that time it took the bold step of declaring it would lead the future by concentrating on digital technology. It was the first to produce a full line of digital communications equipment that set new standards for the industry.

As Nortel, the streamlined identity it adopted for its 100-year anniversary in 1995, the company set out to dominate the burgeoning global market for public and private networks. Its research arm was called Bell-Northern Research (BNR).

As Nortel Networks, the name that evolved after the 1998 acquisition of Bay Networks, the company re-engineered itself into an Internet communications business, offering complete solutions for multiprotocol, multiservice, global networking.

Today's business structure

Once the darling of the Canadian business establishment, since September 2000 Nortel's market capitalization has fallen from $398 billion Canadian to less than $5 billion in August 2002.

Nortel's stock price plunged from $124 to $1.50, and more than 60,000 Nortel employees have lost their jobs, at the time the CFO of the company, stepped up as new CEO.

In a desperate bid to stem the tide of red ink, Nortel eliminated entire departments. Some complained that the company spent too much money to acquire smaller companies and then close them down within months.

At its height, Nortel accounted for more than a third of the total valuation of all the companies listed on the Toronto Stock Exchange (TSX), Canada's largest. Following the general slump in the stock market in the early years of this decade, Nortel's market capitalization suffered tremendously although the company seems to be rebounding strongly on the strength of its VOIP product offerings, termed `Succession'.

Nortel was long the main equipment supplier to Bell Canada, a role similar to Western Electric in the USA. One major project was the DMS series of switches, used to replace the existing Bell crossbar systems in the same fashion that the DS-1 did for AT&T.

Nortel then leveraged this same technology into a smaller package known as the Meridian, aimed at creating PBXs for medium-sized businesses. The Meridian became a big seller, it was an all-digital solution competing against analog systems of limited capability. Things became even more successful with the introduction of the even smaller Norstar system, which could be hung on a wall and yet offered all the same features as Centrex systems you would normally have to lease. The Norstar became a huge seller and garnered much of the PBX business world-wide during the 1980s. This started Nortel on its road to glory.

On May 26, 2004, former Canadian Minister of Finance John Manley was named to the board of directors.