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Nortel plans Asia push, but it may be a tough slog

Wed Jul 9, 2008 12:00am IST
 
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*Nortel plans to grow Asia-Pacific business

*Aims for up to 25 percent of global revenues from region

*Stiff cost competition could slow progress, analysts say

By Wojtek Dabrowski

TORONTO, July 8 (Reuters) - Nortel Networks Corp NT.TONT.N plans aggressive growth in the Asia-Pacific region over the next two to three years, hoping to capitalize on demand for network gear and services in rapidly growing markets such as India and China.

Last year, the region accounted for 16 percent of Nortel's total revenue. The company wants to see that jump to between 20 and 25 percent in the next several years, Francois Lancon, Nortel's executive in charge of Asia-Pacific, told Reuters in a recent interview.

"It is a laudable goal," said Ed Snyder, an analyst at Charter Equity Research. "It's going to be very difficult to do."

Indeed, Asia is ground zero of the bare-knuckles cost competition that Nortel and some of its peers have blamed for dented revenue lines, poor profits and tight margins.

Even Lancon described the endeavour as "pretty ambitious."   Continued...

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