One of the hot spots for telecom spending over the next few years - at least
in the U.S. - will be fiber-to-the-home technology as carriers such as
Verizon and SBC battle with the cablecos for the digital home. Motorola and
Alcatel are two of the key equipment suppliers in the market. Another player
is Tellabs, which does a lot of FTTH business with Verizon after buying
Advanced Fibre Communications last year.
Perhaps Nortel should take a serious look at buying Tellabs - a move that
would currently cost US$3.5-billion (not taking into account a takeover
premium). This would be a bold move for Nortel given its current accounting
"challenges" but FTTH is a high-growth market, which is more than you can
say for Nortel's optical division. If Bill Owens really wants to make his
mark as Nortel CEO, he will have to do something bold instead of talking
about the threat from Chinese suppliers and the oh-so-exciting opportunities
in the federal and defence markets.

Inter.net Canada Ltd. has launched a new Internet telephony service for the
small and medium business market. Its SME Unlimited Plus, which seems
expensive at $46.95 a month, offers unlimited calls in most large Canadian
cities, 720 minutes of LD in North America, low international rates, and
usual calling features. It strikes me that consumers would be better off
using Vonage or one of Inter.net's cheaper residential services. Do you get
the feeling Inter.net is among the Don Quixotes of the telephony world
trying to buck the idea that VOIP is an inexpensive product?

When it comes to transparency, Nortel has a long way to go. Earlier this week, there was an intriguing development in a class-action lawsuit filed last year by Ontario Teachers' Pension Plan Board and the State of New Jersey against Nortel, which alleges the company made false and misleading statements about its results, which artificially raise the price of its shares.
Teachers has withdrawn a complaint against Nortel directors who were on its audit committee from April 2003 to April 2004. Meanwhile, Nortel has agreed to drop a motion to dismiss the lawsuit. As a result, the lawsuit will move into the discovery stage.
What I do not understand - and what Nortel refuses to explain - is why the motion was droppped. What's in it for them? My guess is Nortel doesn'tt want its directors to be sued so it made a deal with Teachers.
That said, the decision moves the lawsuit forward, which could be bad news for Nortel. My take is Nortel has already decided to sacrifice former senior executives such as Frank Dunn and Doug Beatty. As a result, it has absolutely no qualms about letting a lawsuit focused on these gentlemen to proceed.