It's been quiet on the Nortel front - relatively speaking - for the past few weeks but you can expect to see the telecom equipment maker back in the spotlight soon. Nortel said yesterday it expects to file Q4 and 2004 annual results this month, and Q1 2005 results some time in May. Then there will be the 2003 and 2004 AGMs in Toronto in June. I've been assured the meetings will not be held in some obscure locations in the middle of the night but you never know.
On a more troubling note, it appears vendor financing could be making a comeback. In a recent report, TD Newcrest analyst Chris Umiastowski said China's ZTE Corp. has extended a US$1-billion line of credit to India's Atlas Interactive, which is looking to build a new high-speed network to deliver IP-TV, while Huawei Technologies has armed itself with a US$10-billion line of credit for international expansion. This could spell bad news for Nortel, Cisco, Lucent, Alcatel, et al because Chinese suppliers could compete for new business with two big weapons: low prices and low financing. It could cause the major suppliers to return to the vendor financing business and/or lower prices. As many people remember, vendor financing was a popular tool during the telecom boom but it blew up when many customers - and I use that term loosely given the flawed business models of many of them - went out of business and couldn't pay their bills. For the health of the industry, let's hope things don't get out of hand again.