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providers are also focused on implementing voice over IP technology to enable opportunities for additional growth, network efficiency and
revenue-generating services. There is also a growing demand for voice over IP technology among cable operators in CALA.
Customers
We offer our Wireline Networks products and services to a wide range of wireline and wireless service providers around the world. We are
focused on increasing our market presence with key global service providers which we currently expect to account for a substantial proportion
of service provider capital spending in 2004 and beyond. Our service provider customers include local and long distance telephone companies,
wireless service providers, cable operators and other communications service providers.
We also offer applicable data networking and security solutions from our Wireline Networks to enterprises for private networking, as well as to
service providers and system integrators that in turn build, operate and manage networks for their customers such as businesses, government
agencies and utility organizations. None of our Wireline Networks customers represented more than 10% of Nortel Networks consolidated
revenues in 2003.
Competition
Our principal competitors in the Wireline Networks business are large communications companies such as Siemens, Alcatel, Cisco and Lucent.
In addition, we compete with smaller companies that address specific niches within this market, such as Sonus Systems Limited, BroadSoft,
Inc. and Taqua Inc. in packet and Internet-based voice communications solutions; Juniper and Laurel Networks, Inc. in multiservice provider
edge solutions; and Ciena Corporation (which acquired Wavesmith Networks, Inc. in 2003) in multiservice WAN solutions; and Redback
Networks Inc. in aggregation products. Certain competitors are also strong on a regional basis, such as ZTE Corporation and Huawei in the
Asia Pacific region. Some niche competitors are partnering with larger companies to enhance their product offerings and large communications
competitors are also looking for these partnerships or alliances to complete their product offerings. No one competitor is dominant in the
Wireline Networks market.
The primary global factors of competition for our wireline products include:
Competition remains intense as a result of reduced investment in existing legacy networks by service providers, the continued consolidation in
the service provider industry, and the continued focus by suppliers on selling to large service providers with financial resources.
Optical Networks
Products
Our Optical Networks solutions portfolio addresses the varying optical communication needs of service providers and enterprises. Optical
networks transport data, voice and multimedia communications within and between cities, countries or continents by transmitting
communications signals in the form of light waves through fiber optic cables. Optical networking is the most common method for transporting
communications signals between the various locations within a service provider’s network and is unmatched for delivering vast amounts of
data reliably and cost-effectively with service and bandwidth flexibility and scalability.
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• technology leadership, product features and availability;
• price and total cost of ownership;
• ability to create new revenue-generating services for service providers and cable operators;
• conformity to existing and emerging regulatory and industry standards;
• installed base of products and customer relationships;
• network management capabilities;
• product quality and reliability; and
• warranty and customer support.