For all of you non-believers who thought my posting on a Cisco-Nortel marriage was an April Food's joke, perhaps it's time to give it some more thought. Cisco CEO John Chambers said yesterday he is still interesting in a partnership with Nortel. "I believe it would be in Nortel's interest and Cisco's interest to partner together," he said. The idea of a "partnership" seems much more plausible today than two months ago after Nortel hired two ex-Cisco senior executives: Gary Daichendt and Gary Kunis. It must be a whole lot easier now to make a deal, particularly since Daichendt works close to Cisco headquarters in Silicon Valley. Closer ties between Nortel and Cisco, which could include Cisco acquiring Nortel, should not be discounted given the carrier market is consolidating and the emergence of low-cost equipment makers in China. It may be a matter of strategic necessity for the major equipment suppliers to join forces to stay competitive. Can you say Nortel-Cisco or Alcatel-Lucent or Nokia-Ericsson?
Speaking of North American carriers, Infonetics Research expects capital spending will climb a modest 5% to US$61 billion this year.