Zafirovski maps out Nortel strategy

Nortel wants to become a leader in helping companies and carriers take advantage of an explosion of network connections, President and CEO Mike Zafirovski told shareholders on Wednesday, according to a company statement.

The network infrastructure vendor, plagued by an accounting scandal and a series of financial restatements, is uniquely equipped for what Zafirovski called "hyperconnectivity." This trend, driven by a desire to be connected everywhere, will put more devices on networks and make bandwidth demands shoot up, he said. It will include communication from person to person, person to machine, and machine to machine.

Nortel's combined experience in wired and wireless networks and in serving both enterprises and service providers gives it an edge over other vendors, according to Zafirovski. However, that very breadth of expertise puts the company up against many big competitors, including Cisco, Alcatel-Lucent, Avaya, and the newly formed Nokia Siemens.

Zafirovski, who came to Nortel in 2005, has made numerous changes to get the company back on course. Nortel has shaped its strategy to focus on leading the market for next-generation mobility and converged fixed-mobile systems as well as for transforming enterprise networks, Zafirovski said. It also plans to play a significant role in the services business, he said.

Nortel has a partnership with Microsoft to develop unified IP communications systems for enterprises and carriers. And last year Nortel agreed to sell its UMTS (Universal Mobile Telecommunications System) access infrastructure business to Alcatel-Lucent, leaping ahead to 4G mobile technologies while continuing to develop products for the older GSM and other wireless technologies.

On Tuesday, Nortel disclosed some of its financial results for the first quarter of 2007, set to be discussed in a conference call Thursday, and confirmed its predictions for the full year. The company expects to announce that revenue for the quarter rose 4 percent from a year earlier to $2.48 billion. For the full year, the company expects revenue to be flat or down slightly from the previous year due to the UMTS divestiture.

Nortel also named David Drinkwater as its CFO, replacing Peter Currie, who left the company on Monday. Drinkwater had been the company's chief legal officer since December 2005.