& cplSiteName &

The Decline & Fall of Nortel Networks

Craig Matsumoto
1/21/2009
50%
50%

And so it's come to this.

Restructuring and bankruptcy protection might not be the end of Nortel Networks Ltd. , but it's certainly the end of Nortel as we know it. Most analysts agree that pieces of the company will be sold off, and what's left won't be the technology colossus that was Nortel. (See Nortel Files for Bankruptcy Protection and Should Nortel Be Sold for Parts?)

Since Light Reading started in 2000, we've posted more than 1,700 news analyses that included substantial mentions of Nortel. Together, they trace the arc of the telecom downturn and reflect the additional punishment suffered by Nortel employees and shareholders in the wake of accounting scandals and missed opportunities.

Talk about highs and lows. It's been a house of trap doors for Nortel. Every time things start shaping up, something new – usually a Nortel CEO – causes the floor to cave in.

Don't believe us? We've got nearly a decade's worth of headlines to sift through. Pick your favorite year, and see for yourself.

  • Page 2) 2000: Rough Riding

  • Page 3) 2001: The Wheels Come Off

  • Page 4) 2002: Hope Stings Eternal

  • Page 5) 2003: Cracking

  • Page 6) 2004: Dunn Deal

  • Page 7) 2005: The Revolving Door

  • Page 8) 2006: Mike Z. Builds His Dream Team

  • Page 9) 2007: On the Offensive

  • Page 10) 2008: Storm Clouds Gather

    For Light Reading’s complete list of news stories, reports, blogs, and other content about Nortel Networks – including an RSS feed to all of our Nortel coverage – please click here.

    — The Staff, Light Reading

    Next Page – 2000: Rough Riding

    (14)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
    Page 1 / 2   >   >>
    Pete Baldwin
    50%
    50%
    Pete Baldwin,
    User Rank: Light Beer
    12/5/2012 | 4:13:33 PM
    re: The Decline & Fall of Nortel Networks
    ... to Dave Roberts of Vyatta, for the shout-out in his own blog:
    http://opensourcejuicer.blogsp...

    Dave, an Nortelite who got out early, has his own timeline, with a more personal touch:
    http://opensourcejuicer.blogsp...

    ... and to Mark Evans' All About Nortel:
    http://www.allaboutnortel.com/...

    Evans' blog has been quite busy for a while, as you might imagine. His tidbit about the corporate jet was particularly interesting.
    http://www.allaboutnortel.com/...
    Pete Baldwin
    50%
    50%
    Pete Baldwin,
    User Rank: Light Beer
    12/5/2012 | 4:13:33 PM
    re: The Decline & Fall of Nortel Networks
    For me, the most eye-opening part of the timeline was 2001. So many layoffs, again and again ... all the backtracking that represented. I didn't cover the company closely then, and I'd never stopped to think how much had happened that year.

    The prediction of profitability by Q4'02 was interesting, too...
    muffinman
    50%
    50%
    muffinman,
    User Rank: Light Beer
    12/5/2012 | 4:13:33 PM
    re: The Decline & Fall of Nortel Networks
    I was at Nortel for 5 years, and escaped to Zhone of all places. Escaped from Telecom altogether 2 years ago, and very thankful.

    I won't give a timeline, but the main that went wrong from my perspective is Nortel tried to become Cisco. When I joined in 1997, Lucent was the big competitor. Along came Cisco in 1998, and as Cisco grew Nortel tried to mirror them. Examples...

    1. Buying Bay Networks. Fine company, but wrong fit.
    2. Outsourcing everything. Right idea, but NT bungled it. Sold operations with highly paid people, and then wonder why the could not get competitive costs.
    3. Overconfidence. Won't ever forget John Roth saying "Nortel will learn to spell 'IP' before Cisco learns to spell 'quality'"
    4. Overspending stock. Again, Cisco was the pro at using stock to buy companies, but NT blew it on Promantory, XRos, etc...
    5. Greed - Management
    DCITDave
    50%
    50%
    DCITDave,
    User Rank: Light Beer
    12/5/2012 | 4:13:32 PM
    re: The Decline & Fall of Nortel Networks
    re: "For me, the most eye-opening part of the timeline was 2001. So many layoffs, again and again ... all the backtracking that represented. I didn't cover the company closely then, and I'd never stopped to think how much had happened that year."

    I covered them then and the PR machine at the time would just lie about EVERYTHING. I mean, they would even lie even more than normal PR people lie, which is quite a lot.

    ph
    muffinman
    50%
    50%
    muffinman,
    User Rank: Light Beer
    12/5/2012 | 4:13:32 PM
    re: The Decline & Fall of Nortel Networks
    2000 was when things really started to fall apart. So much hype. Pushing for a big Q4, trying to get to $30B of revenue. Then, in early 2001, we had an employee meeting, and you could tell something was amiss. As you mention, 2001 was when things fell apart, but it happened because of mismanagement in 2000. One reason was the lending to CLECs, if I remember correctly.
    telecom_guru
    50%
    50%
    telecom_guru,
    User Rank: Light Beer
    12/5/2012 | 4:13:31 PM
    re: The Decline & Fall of Nortel Networks
    I've read all the boards and many of the opinions have some merit, however the ultimate reason for the failure of a seemingly sound company is bad senior executive management and plain bad execution.

    Let's start with the Clarence Chandran appointment (Roth handed the helm to Clarence) and quickly we had a string of ill founded acquisition (Aptis, Shasta, Alteon, Some photonic switch crap company, a bad IP DSLAM, can go on and on....). Roth (who was actually a great ceo) had to step back in ...but by then the firewall had been too badly compromised not to mention the telecom bubble burst happening. Chandran was a freaking disaster, this guy was not ready to run a major corporation. Then our next brilliant move... appoint the CFO as CEO (Frank Dunn)... another freaking disaster in the making. This guy knew less about running a major corporation than did Clarence and Dunn ended up showing how stupid he really was by not even understanding that what he was doing with the books was illegal (yeah I actually believe he was too stupid to know... I knew him, he was a complete idiot!). I would say that between Chandran and Dunn, the company was placed in a death spiral that was not recoverable. All the king's men and all the kings horses could not put dumbpty nortel back together again. The next guys who came in really stood no chance, the poison pill was already swallowed... it was slow poison that's all. I reckon that if Roth had never handed the company to Chandran, Nortel would be alive and strong today (or as strong as any other telecom provider). Roth had the right vision and he knew how to execute... those other dumb %#$&'s were a bunch of posers!!!!!

    Too bad, because Nortel actually had some smart people, specially in R&D... Yeah the good 'ole BNR days... those were the days my friends...
    Hanover_Fist
    50%
    50%
    Hanover_Fist,
    User Rank: Light Beer
    12/5/2012 | 4:13:30 PM
    re: The Decline & Fall of Nortel Networks
    Phil,
    So, between Nortel's neutered Board of Directors and their MIA executive management team, what makes you think they can possibly find and bring forward "all that's going well" there?

    In all honesty, this company is truly 'Dead Man Walking.' The bloody body's in the water and surrounded by sharks; it's only a matter of time before the feeding frenzy starts.
    DCITDave
    50%
    50%
    DCITDave,
    User Rank: Light Beer
    12/5/2012 | 4:13:30 PM
    re: The Decline & Fall of Nortel Networks
    That's a bit harsh. I don't think they're destroying value on purpose. Instead, they just haven't found the right leadership to realize and bring to the surface all that's going well at Nortel.

    ph
    Hanover_Fist
    50%
    50%
    Hanover_Fist,
    User Rank: Light Beer
    12/5/2012 | 4:13:30 PM
    re: The Decline & Fall of Nortel Networks
    Based on this report, is it fair to conclude that Nortel's current PR spinny statement of "Business as usual" can be direclty translated to, "We'll continue flying this airplane RIGHT into the ground and make sure to kill EVERYONE on board! We want to ensure there are absolutely NO survivors when we're finished!"?
    paolo.franzoi
    50%
    50%
    paolo.franzoi,
    User Rank: Light Beer
    12/5/2012 | 4:13:30 PM
    re: The Decline & Fall of Nortel Networks

    Where the heck did Phil Harvey go? Who is this clone that has replaced him....a kindler, gentler Phil - maybe one who has hope?

    I think taking Nortel on its own and saying good or bad things is not accurate. Lucent, Siemens, and others are having or have had the same problem. These companies sold over their history systems to companies that deployed the same technology over decades. Think about how long mechanical and analog - even digital phone switches - were around. They sold to monopolies government or otherwise who did few things on mass scale. These were VERY stable businesses. Low growth, good profit, highly stable. Go back before the breakup and to the days of rate of return. People could plan CAPEX based on retirement of the rate base and housing starts.

    Today, we are talking about what kind of fiber to the home technologies we might want to deploy. Verizon launched FiOS in Keller in summer of 04. That is less than 10 years from the JPC RFP for DSL. Think about it. People are now arguing about second generation and third generation Fiber to the Home technologies 5 years after the first large scale networks started.

    On top of that the entire network financial model has changed as has the purchasing model. These companies - which are huge institutions - have not changed rapidly enough. Materialgirl has posted here over the years with a view to the bright shiny new world. I don't always agree with her, but I do agree looking back to old models is a failure waiting to happen.

    The emperor has no clothes. Our current business models are very broken. Want to understand why VC money has dried up? Think about it. Why the heck are we investing hundred of millions in new systems just to get to low margin systems businesses competing against dozens of companies (NT, ALU, NSN, Cisco, Juniper, Mot, Fujitsu, Hitachi, NEC, Huawei, ZTE, etc.). The carriers are doing their consolidation bit to lower costs of their company. The vendor community still acts like it is 1990 - heck some act like it is still 1999.

    The hard part is the executives that are at the top of these firms for the most part grew up in the days when the companies had stable R&D investment models and ROIs. It is not that they are good, bad or indifferent. They are obsolete. The funny thing is that many of them listen to conventional wisdom. This is a period of industry restructuring. Linear analysis is going to lead companies to failure. But that is what analysts do. What these large companies need is vision to see past the analysis to what the structural issues are and how to get out of them.

    seven
    Page 1 / 2   >   >>
    From The Founder
    Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
    Flash Poll
    Live Streaming Video
    Charting the CSP's Future
    Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
    LRTV Custom TV
    VeEX at ANGA COM

    6|27|17   |     |   (0) comments


    At ANGA COM 2017, Cyrille Morelle, president and CEO of VeEX, updates Alan Breznick with VeEX's new products and technology. This includes VeSion cloud-based platform for network monitoring, AT2500-3G advanced spectrum analyzer and MTTplus-900 WiFi Air Expert module. He also comments on DOCSIS 3.1 deployment and Remote PHY technology.
    LRTV Custom TV
    The Overall Objective Is to Win the Game

    6|26|17   |     |   (0) comments


    SCTE•ISBE's Chris Bastian discusses Energy 2020's success to date and the importance of a flexible approach that allows for changes in specific strategies in order to reach significant milestones.
    LRTV Interviews
    CenturyLink: Let's Get Past SD-WAN Hype

    6|23|17   |   04:02   |   (0) comments


    Technology becomes a "shiny object" unless it's properly focused on solving business needs for enterprise customers, says Bill Grubbs, network solutions architect for CenturyLink. He explains to Light Reading why SD-WAN deployments have to be tailored to specific needs – and more.
    Women in Comms Introduction Videos
    Infinera's Sales Director Paints Tech's Big Picture

    6|21|17   |   4:14   |   (1) comment


    Shannon Williams, Infinera's director of sales, shares how she achieves work's many balancing acts -- between her role and the broader company, today and tomorrow's tech and more.
    LRTV Custom TV
    SD-WAN Innovation & Trends

    6|20|17   |     |   (0) comments


    Versa CEO Kelly Ahuja discusses with Carol Wilson the current status and trends in the SD-WAN market, Versa's innovation around building a software platform with broad contextualization, and the advantages that startups can bring to the SD-WAN market.
    LRTV Interviews
    Ovum's Dario Talmesio on 5G in Europe

    6|20|17   |   02:16   |   (0) comments


    At 5G World 2017, Dario Talmesio, principal analyst and practice leader on Ovum's fixed and mobile telecoms European team, explains the emerging trends amongst European operators as they prepare for 5G.
    LRTV Custom TV
    Putting Power on a Pedestal

    6|19|17   |     |   (0) comments


    ARRIS's John Ulm says a major accomplishment of SCTE•ISBE's Energy 2020 program is increased focus on power cost and consumption, including inclusion of energy requirements in operators' RFPs and RFIs.
    LRTV Custom TV
    Gigabit Access: The Last-Mile Pipe for All Future Services

    6|19|17   |     |   (0) comments


    A Gigabit access platform being deployed today must be able to deliver all types of services to an increasing number of devices. A non-blocking architecture is necessary to support the ever-increasing growth in bandwidth demand. The Huawei Gigabit access solution is based on a distributed design that is fully scalable to deliver a unprecedented performance.
    LRTV Custom TV
    Key Factors to Successfully Deploy an SD-WAN Service

    6|19|17   |     |   (0) comments


    As service providers transition their SD-WAN solution from trials and limited deployments into production at large scale, there are important considerations to successfully operationalize these solutions and realize their full potential, without adding complexity, introducing uncertainty or disrupting current business operations. Sunil Khandekar, CEO and Founder ...
    LRTV Custom TV
    IoT Solutions: Rational Exuberance

    6|19|17   |     |   (0) comments


    IoT solutions are morphing from hype into viable business opportunities. Huawei has the platform and ecosystem support to help carriers successfully address new business opportunities in the IoT space.
    LRTV Custom TV
    Realizing ICN as a Network Slice for Mobile Data Distribution

    6|19|17   |     |   (1) comment


    Network slicing in 5G allows the potential introduction of new network architectures such as Information-centric Networks (ICN) as a slice, managed over a shared pool of compute, storage and bandwidth resource. Services over an ICN slice can benefit from many architectural features such as Name Based Networking, Security, Multicasting, Multi-homing, Mobility, ...
    LRTV Interviews
    Ovum's Mike Roberts on 5G Uptake

    6|19|17   |   04:08   |   (0) comments


    Mike Roberts, research director for Ovum's service provider markets group, explains why he has boosted his 5G subscriptions forecast.
    Upcoming Live Events
    October 18, 2017, Colorado Convention Center - Denver, CO
    November 1, 2017, The Montcalm Marble Arch
    November 1, 2017, The Montcalm Marble Arch
    November 2, 2017, 8 Northumberland Avenue, London, UK
    November 30, 2017, The Westin Times Square
    All Upcoming Live Events
    Infographics
    With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
    Hot Topics
    No Imagination: UK Chip Biz Goes Up for Sale
    Iain Morris, News Editor, 6/22/2017
    Does AT&T Deserve Time Warner?
    Mari Silbey, Senior Editor, Cable/Video, 6/23/2017
    Netflix's Lesson in Culture Expectation Settings
    Sarah Thomas, Director, Women in Comms, 6/21/2017
    Kalanick Steps Down as Uber CEO
    Sarah Thomas, Director, Women in Comms, 6/21/2017
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
    One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
    Animals with Phones
    Live Digital Audio

    Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.