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

March 2000: Nortel joins the all-optical switching craze with the $3.25 billion purchase of Xros.

June 2000: Nortel's dominant share of the optical market extends to 37 percent.

July 2000: Nortel decides to chase Cisco by buying up Alteon for $7.3 billion.

August 2000: Word has it some staffers in optical networking are defecting for startups.

September 2000: Attacking another hot (but ultimately doomed) market, Nortel starts talking about a terabit router. Yeah, that's gonna work.

October 2000: A sign of the times: Nortel helps customer Aerie Networks finance a $1 billion buildout. But its quarterly results show growth is slowing. Hmmm...

November 2000: Fallout continues over Nortel's numbers, but CEO John Roth predicts 30 to 35 percent growth in 2001.

December 2000: Xros makes it to carrier trials.

Next Page – 2001: The Wheels Come Off

January 2001: Light Reading gets early word of layoffs. Nortel denies – then confirms – a staff cut of about 4 percent.

February 2001: Nortel buys an optical components facility in Zurich from JDSU. Heck, it's only $2.5 billion.

Light Reading's first in-depth interview with Greg Mumford, president of Nortel's Optical Internet division.

Later, at a time when people are still surprised at such things, Nortel abruptly slashes its Q1 estimates, to $6.3 billion from $8.5 billion.

Then, CTO William Hawe departs. It turns out he's one of a few executives who'd cashed in stock options before Nortel started going south.

March 2001: Don Smith, president of Optical Internet solutions, leaves. This paves the way for Brian McFadden to move up. Then Nortel trims its Q1 forecast a bit more and plans to cut 15,000 of its 94,000 employees. Roth, who'd predicted 30 to 35 percent growth for 2001, stops giving predictions.

April 2001: Vendor financing continues.

Those 15,000 layoffs? Make it 20,000.

Anil Khatod appointed Nortel's first chief marketing and strategy officer.

Analysts suspect Nortel lowered its inventories by pushing products back to suppliers.

Light Reading learns Nortel has initiated a full restructuring.

May 2001: With CEO John Roth due to resign in 2002, his supposed successor, chief operating officer Clarence Chandran, resigns for health reasons. Nortel launches a CEO search.

June 2001: Supercomm. Elton John, apparently booked much, much earlier, plays at Nortel's customer and employee event.

Supercomm hangover: Q2 revenue forecast dips to $4.5 billion. And about those 20,000 layoffs? We're gonna need 10,000 more.

Then the terabit router goes boom.

And remember Anil Khatod, Nortel's first chief marketing and strategy officer? Yeah, he's already gone. Welcom Alan Kember instead. But at least Nortel's cost-cutting is done.

August 2001: Universal Edge and AccessNode product lines get sold to Zhone Technologies Inc. (Nasdaq: ZHNE).

September 2001: Wait. Cost-cutting isn't done?

October 2001: Roth gets an early nudge out the door; CFO Frank Dunn named the next CEO. Another 20,000 layoffs announced, bringing Nortel's headcount down to 44,500. Revenues drop (again).

November 2001: Nortel unloads equipment it had bought for its optical components business.

December 2001: Greg Mumford named CTO.

Next Page – 2002: Hope Stings Eternal

January 2002: Nortel faces the fact that its big acquisitions have come up bust. And Q4 revenues fall to $3.4 billion. But Nortel says it'll turn a profit by year's end.

February 2002: Nortel drops its new CFO, Terry Hungle, in an effort to avoid accusations of wrongdoing. (Pssst: Wrong guy.)

CEO Dunn reiterates that Nortel will be profitable by Q4. Having lived with Nortel's predictions throughout 2001, analysts aren't so sure.

Light Reading determines Nortel has stopped making Arrayed Waveguide Gratings (AWGs) as the components market starts its slide into the abyss.

March 2002: Xros aXed. And then comes news that former CEO John Roth got a raise in 2001. Naw, that won't bother anybody.

April 2002: Nortel is set to miss estimates yet again. Creditors start getting nervous and shareholders start getting upset.

May 2002: Another 3,500 cuts will bring Nortel's rolls down to 42,000. The optical long-haul business gets restructured, and talk emerges about selling the components division.

June 2002: Brian McFadden takes control of all optical products.

July 2002: Nortel names Douglas Beatty CFO.

A class action lawsuit calls out Roth and Dunn, among others, alleging "improper accounting practices." These suits are always bogus, right?

Q2 revenues drop to $2.8 billion. Dunn no longer says Nortel will be profitable this year.

August 2002: Nortel makes Fortune's list. Just not the one you'd want. Then CTO Greg Mumford predicts a future based around an optically switched core. Regarding his comments on carrier services, one reader says, "Mumford hit nail on head then hit his fingers!!"

And, in what's becoming a quarterly occurance, Nortel lowers its forecast. Another 7,000 layoffs will bring the headcount down to 35,000.

Septermber 2002: Word spreads that Nortel is selling its components business to Bookham. Nortel shutters its Coretek acquisition. And then, having already lowered estimates by 10 percent, Nortel lowers them another 15 percent.

October 2002: The Bookham sale becomes official.

December 2002: Light Reading editors visit Ottawa, chat with Greg Mumford again, and nearly get killed.

Next Page – 2003: Cracking

January 2003: 360networks Inc. sues Nortel for more than $101 million in an effort to recoup the money it paid Nortel prior to settling its Chapter 11 bankruptcy. Does that count as ironic?

Nortel unveils its first upbeat quarterly financial report in quite some time. CEO Frank Dunn says he's focusing on "moving forward."

Light Reading editor Scott Raynovich looks ahead to the rest of the year, and concludes: "[For Nortel] the bankruptcy risk now looks fairly minimal." We should have asked him then to look forward another six years...

February 2003: A Nortel success story. Or should that be, a Nortel succession story?

The recently installed general manager of Nortel's optical networks business, Philippe Morin, pitches the company's new long-haul DWDM platform to cash-strapped carriers. Morin certainly knows about long-haul – in 2009, he'll still be the head of Nortel's optical business.

March 2003: It's time for OFC 2003 (which has a nice ring to it if you say it out loud), where Nortel was showing off Gigabit Ethernet linecards for its OPTera multiservice switches. State-of-the-art stuff!!

April 2003: Good news and bad news for Nortel. It made a profit in the first three months of the year – its first quarterly profit since 2000 – but its revenues were on the slide.

May 2003: It's fair to say Nortel still has something of an edge in the wireless market...

MCI gives Nortel's Class 4 replacement softswitch its seal of approval. That's worth having, isn't it? Oh...

July 2003: Another quarter, another encouraging set of numbers, especially when compared to the figures being handed out by Lucent. Say, things are really looking up!

August 2003: Concerns are raised about the job security of Nortel's North American staff as the vendor ramps up its offshore development efforts in India. "Ottawa remains our primary R&D facility," says a spokeswoman.

September 2003: And it's not only Nortel's R&D that's heading overseas...

Meanwhile, Nortel lands a whopping $1 billion-plus deal with Verizon Wireless . Ah, those were the days.

An important moment for all vendors: Analyst Steve Levy declares that things are, at last, looking up for the telecom equipment sector. Where'd he go?

October 2003: Heavy Reading notes that carriers are heading for converged IP/MPLS networks, and that, while Nortel is well placed with its optical portfolio and is solid in ATM, it's "talking about continuing developments in MPLS." Only the talk wasn't followed by the walk...

The cracks start to appear. Nortel mentions the need for some accounting restatements as it reports another quarterly profit, saying it will make things clearer in November once its re-filings were ready to submit. Please don't mention "hindsight" just yet.

November 2003: Nortel re-files a whole host of financial forms, and then slips away quietly while everyone tries to figure out what the hell it is they're talking about.

Time to identify the most influential folk in the telecom industry, something that, we noted, Light Reading hadn't done for absolutely ages because, and we quote, "the last time we fiddled with the list, George Bush was the president and the U.S. was at war with Iraq." Anyway, we had Nortel's CTO at #4.

December 2003: Light Reading reveals that Nortel is being run by Fastolph Hardbottle.

Next Page – 2004: Dunn Deal

January 2004: Industry rumor links Nortel and core router vendor Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7). Later, Nortel's share price leaps more than 19 percent as it lands a monster VOIP equipment deal from Verizon. And the quarter ends with numbers that "blew the doors off analysts' expectations." Woohoo!

February 2004: Having sold its DLC business in 2001, Nortel gets back into the fixed broadband market via strategic alliances with three partners: Calix Inc. (NYSE: CALX), ECI Telecom Ltd. , and Keymile AG . A sound move, at least on paper.

March 2004: Alarm bells start ringing as Nortel delays the filing of its 2003 10-K report, saying it will probably have to restate its 2003 earnings and even redo some of the previous restatements. Stock falls 9 percent. Uh, oh!

But wait, there's more! The CFO and financial controller are placed on paid leave while independent auditors check Nortel's books. Furrowed brows appear and the stock drops further.

April 2004: The SEC initiates a formal investigation into Nortel's accounts. Light Reading notes that CEO Frank Dunn "may find himself in the hotseat, considering that prior to being CEO, he was the CFO in charge of the books during the 2000-2002 periods that involved the accounting restatements that have caused the company problems." And then someone turns the fan on high and starts flinging poo.

As if investors didn't have enough to worry about, it seems Nortel may be paying above-market prices for some of its optical components.

Nortel prepares to launch itself into the multiservice edge box market with Neptune, designed to include IP routing and Ethernet switching. Is the company finally ready to take on the IP big guns? (Please don't hold your breath at this point.)

May 2004: "When Nortel sneezes, Bookham catches a cold."

The wraps come off the Neptune multiservice edge router, or MPE 9000, but already there are feature introduction issues.

Hasta la Shasta, baby!!

Along with another printer cartridges invoice and the offer of an amazing deal on 12-inch stuffed crust meat feast pizzas, Nortel gets another unwelcome item in its snail mail in-tray.

Attendees at a major Nortel User Group conference play a new game called "Spot the Senior Nortel Executive." No one wins.

Turns out Frank Dunn didn't exactly exit the building when he was sacked. He remained as a member of the board for a further 23 days! His replacement soon turns up.

"No, we are NOT buying Starent!"

June 2004: Basically, it's anyone's guess what's going on in the Nortel accounting department as the restatement process rumbles on.

We're talking manufacturing facilities, not shrubbery...

July 2004: Nortel's new management starts to get tough with the gang that cooked the books.

Nortel begins its Grand Indian GSM Adventure, but the warning signs regarding margins are there for all to see (retrospectively): "Nortel has emerged as the lowest bidder," a Bharat Sanchar Nigam Ltd. (BSNL) executive tells Reuters. The deal is announced a few weeks later.

There are no "material developments" to report, states Nortel. With the exception that business sucks, of course. That was material enough for the stock to take a 15 percent hit.

August 2004: Summertime blues hit the Nortel HQ, as does another shareholder lawsuit.

September 2004: Nortel restates its restatement statement. You dig?

Nortel's financial troubles are sooooooo bad that CEO Bill Owens is in line for only a $2.7 million paycheck. I mean, how's a guy supposed to live?

Never mind the historical numbers. The current ones are looking grim, as Nortel warns of an expected Q3 shortfall. Meanwhile, North America feels the brunt of the 3,250-employee reduction and Nortel stays tight-lipped about a potential hook-up with Korea's LG Telecom .

October 2004: So begins the CTO conveyor belt, as Greg Mumford makes way for Brian McFadden.

Another month, another missed deadline.

November 2004: "This is the way. This is Nortel."

December 2004: Nortel preps the market for a deadline-busting announcement, teases it a bit more, and then puts everyone in a grumpy mood to end a disastrous year.

Next Page – 2005: The Revolving Door

January 2005: Nortel leaves it right up to the wire to file its restated 2003 accounts. Now, how about 2004's numbers? Also, Nortel finally unveils partnerships to address the Chinese mobile market.

February 2005: As Nortel prepares to install a new, permanent CFO, the first numbers from 2004's quarters hit the streets with a dull thud. Meanwhile, there's no let-up for former or current execs, as CEO Bill Owens is the subject of replacement rumors and a number of disgraced ex-Nortel bodies are sued for their ill-gotten gains.

March 2005: As some semblance of normality returns, Nortel has some encouraging optical contract news. And CEO Owens tempts a former Cisco man to be COO, effectively the No. 2 spot in the management hierarchy.

Nortel starts to catch up with itself, filing its 2004 third-quarter report, though the outcome is a $259 million loss.

Here's one to discombobulate you – reports link Huawei Technologies Co. Ltd. with Nortel, though in a partnership capacity only. The Chinese giant later says it was misunderstood. Or something.

Six months is enough time to make an impact, isn't it? Brian McFadden gets palmed off with a unique post – he becomes CRO! Gary Kunis, ex of Cisco, becomes CTO.

April 2005: Nortel spends $448 million on PEC Solutions to buy a significant position in the government services market.

May 2005: Fourth-quarter results roll in, and CEO Bill Owens proclaims, "Nortel is playing to win!"

June 2005: First-quarter financials show signs of stability, though Nortel moans about the pricing pressures caused by "newer competitors, particularly from China." Then, suddenly, Nortel's COO and new CTO quit following disagreements over "management styles and business views."

June 2005: Neptune, the multiservice router unveiled more than a year ago, is yet to hit commercial terra firma.

August 2005: Nortel pleases with its second-quarter numbers, giving Bookham Inc. (Nasdaq: BKHM; London: BHM) a lift, too. Then Nortel develops its partnership with Korea's LG into a full-blown joint venture.

September 2005: Nortel makes its WiMax play courtesy of partnerships with Airspan Networks Inc. (Nasdaq: AIRN) and LG as it gears up to launch its own mobile WiMax platform. Then CEO Bill Owens visits London, and maybe wishes he hadn't.

October 2005: Owens out. Mike Zafirovsky in. Motorola Inc. (NYSE: MOT) is not too happy.

November 2005: Bill Owens bows out with better-than-expected sales and confidence in the Asia/Pacific market.

Then the clearout begins...

December 2005: Cable + optical = a welcome holiday gift for the new CEO. And Zafirovski opens his Nortel M&A account with an enterprise security acquisition.

Next Page – 2006: Mike Z. Builds His Dream Team

January 2006: Nortel boss Mike Z. continues his cost-cutting plan by bringing in some new faces (well, new to Nortel, anyway).

February 2006: Nortel and Huawei form a joint venture and bid on a big telco GPON deal. Nortel's other broadband partner, ECI, says its deal with Nortel didn't amount to much, so it starts unraveling its Nortel relationship and looking for other, more significant, North American broadband partners.

Nortel shells out a load of cash to settle some outstanding shareholder lawsuits. And Mike Z.'s cost-cutting measures continue as he adds more former G.E. managers to the payroll.

Mike Z. outlines his strategy, with IMS (IP Multimedia Subsystem), IPTV, and WiMax cited as R&D priorities. The CEO then tells in investor crowd: "We're at ground zero... We're digging ourselves out of a hole."

March 2006: Financial restatements become as much a part of Nortel culture as casual dress Fridays.

Nortel and partner Minerva Networks Inc. start to make some noise in the world of IPTV middleware and applications.

April 2006: Some WiMax success!

Nortel provides some status updates, tips its hand on its M&A interests, and continues its cost-cutting strategy by, yes, appointing more former G.E. executives to the management ranks.

May 2006: More managers are shuffled around at Nortel. BT Group plc (NYSE: BT; London: BTA) starts to show interest in Nortel's controversial Ethernet technology, Provider Backbone Transport (PBT).

June 2006: Nortel's cost-cutting measures continue as it adds a CTO to its management payroll.

As Nokia Corp. (NYSE: NOK) and Siemens AG (NYSE: SI; Frankfurt: SIE) successfully hook up, everyone starts getting jumpy about Nortel's strategic direction.

July 2006: Nortel and Microsoft promote the cause of unified communications.

Chief Strategy Officer George Riedel puts his mop aside long enough to tell us about his four buckets of responsibility at Nortel:



August/September 2006: Nortel's sells its UMTS business and related assets for $320 million – a bargain by many estimates – and vows it will be a leader in the 4G market.

{column}October 2006: PBT continues its winning streak. Nortel invests in muni wireless and quickly claims market leadership – "claims" being the operative word.

November/December 2006: Nortel rounds out the year by orchestrating a stock split. (Later, the shareholders would split, too.) And the company continues to make WiMax and wireless broadband progress, even while its shareholder suits drag on and on in court.

Next Page – 2007: On the Offensive

January 2007: UMTS is gone, but BT commits to PBT and IPTV buzz continues to grow. Meanwhile, word spreads that Nortel might swap its GSM business for the Alcatel-Lucent (NYSE: ALU) PBX business.

February 2007: Peter Currie steps down as CFO and 3,000 more get the axe. Zafirovsky explains why Nortel thinks 3G is so yesterday. Nortel finds an IPTV partner. And, in scandal news, a Nortel exec pleads guilty to assault.

March 2007: Those restated 2004 and 2005 earnings? We'll have another look at those, please.

Nortel continues to amass IPTV partners, but it buries Shasta.

Finally, the SEC files fraud charges against former CEO Frank Dunn, former CFO Douglas Beatty, Michael J. Gollogly, and MaryAnne E. Pahapill.

April 2007: The former Bookham CEO tells Light Reading how Nortel "nearly killed us." Share and share alike. Elsewhere, PBT takes hold at BT.

May 2007: For a change, Nortel offers up good news with its quarterly earnings and goes on the offensive.

May/June 2007: Nortel takes a shot at buying Avaya Inc. but loses out to private equity firms.

The SEC finally fines Nortel for its accounting scandal, but not as much as expected.

The Optical Multiservice Edge (OME) 6500 gets a makeover that includes trendy Ethernet + optical technology.

At NXTcomm, or whatever it's called this year. John Roese, CTO, talks about smart applications and application-aware networks.



Scott Wickware, VP of carrier networks, pledges love for 4G, including WiMax.



And, Nortel starts its Carrier Ethernet Ecosystem, promotes PBT some more, and explains its IPTV strategy and its end-to-end offering.

July 2007: BT puts PBT to use. Meanwhile, not every PBT win is as glamorous.

August 2007: Nortel's president for North America prepares to move on and Zafirovski gets in a buying mood as Q2 revenues disappoint. Also, WiMax takes on added importance.

Nortel and Tellabs?

September 2007: Nah.

More SEC charges come down, this time against four former VPs. And look who's checking out PBT now.

October 2007: Nortel gets a new CFO, and PBT continues its marketing mystique. But the month ends with Nortel paying out a $35 million SEC settlement.

November 2007: A profit! Growth in 2008! Things are finaly looking up. For real this time. No, really. Also, the OME and PBT make their mark on the month.

December 2007: With Cisco Systems Inc. (Nasdaq: CSCO) pushing telepresence hard, Nortel reminds us it's there, too.

And Vonage Holdings Corp. (NYSE: VG), which has been having troubles of its own, gets sued by Nortel and quickly settles.

Next Page – 2008: Storm Clouds Gather

January 2008: The year starts on a downer: Fujitsu Network Communications Inc. , not Nortel, wins a closely watched Verizon Communications Inc. (NYSE: VZ) optical contract.

February 2008: Rumors sprout of a wireless joint venture between Nortel and Motorola. Light Reading and others point out that this would be like Oscar Madison inviting Felix Unger to move back in.

Later, CTO John Roese gets stuck on the train talking about 4G (top video) and puts in a plug for moving from 2G straight to 4G (bottom video).




{column}And, while revenues for 2007 come in at $10.95 billion, Nortel makes plans for another 2,100 job cuts and 1,000 job relocations (to lower-cost regions). CEO Mike Zafirovski clams up about possible acquisitions. But Nortel does think it can get 20 percent of the carrier Ethernet market within four years. (Sounds as if they're high on PBT.)

March 2008: In a crowded IPTV market, Nortel decides its focus will have to be on applications. In the crowded optical transport market, the company talks up 100-Gbit/s. Meanwhile, Nortel's new 40-Gbit/s cards for the OME 6500 are kept deeply secret. (Except, they're advertised on the top of Light Reading's home page.)

April 2008: Nortel cuts down on "late life-cycle" products. Cracks appear in the PBT foundation.

May 2008: In case Nortel is feeling too good about itself, Mark Sue of RBC Capital Markets has some encouraging words. (He'll later move his target stock price to $0.) But, warring factions within BT Group plc (NYSE: BT; London: BTA) start debating the usefulness of PBT.

May/June 2008: BT declares it's going with MPLS and relegating PBT to the bench. Nortel and Heavy Reading point out that plenty of other Tier 1s are interested in PBT. Verizon turns out not to be one of those Tier 1s, but it likes PBB just fine.

June 2008: The Mounties come for former CEO Frank Dunn.

August 2008: CDMA squeezes Q2 sales, but Nortel remains on target.

August 2008: As hinted a year ago, Nortel goes shopping. Novera Optics for WDM-PON! Pingtel Corp. for unified communications! DiamondWare for... whatever they do!

September 2008: Nortel has been lapping up 40-Gbit/s wins for some time, the lastest being BCE Inc. (Bell Canada) (NYSE/Toronto: BCE). Then – SHOCKER! – Nortel says it's trying to sell the Metro Ethernet Networks (MEN) division that includes PBT and 40-Gbit/s transport.

More good news: Nortel says revenues in 2008 will be lower than in 2007. Stock falls 40 percent. Reaction to the MEN announcement spreads rapidly. There are plenty of possible buyers, but the likely one is the name many people don't want to hear.

October 2008: Nortel finds a taker for WDM-PON. And Verizon recruits Nortel for 100-Gbit/s optical networking.

November 2008: As the world economy capsizes, Nortel adds 1,300 more layoffs. "Survive" becomes a key word; a sense builds that Nortel is approaching its crepuscle.

December 2008: Word gets out that Nortel has researched its options for bankruptcy. The stock, already sub-$1 in the U.S., plunges 25 percent.

More fun: Huawei may be moving in. There goes the neighborhood.

Finally, Nortel ends the year on an "up" note, showing off 100-Gbit/s Ethernet technology. And three suiters are reportedly eyeing the MEN division.

2009? 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