John Roese’s Blog CTO, Nortel

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1. […] simple Posted by Brad Reese - March 12, 2008 on 3:59 am | In Networking | In his most recent blog entry, John Roese - Nortel CTO, blogs about how Nortel is seeking mind share by using technology to make […]

   March 13th, 2008 at 5:29 pm from Nortel CTO seeks mind share by using technology to make business simple | WCZone Web Design! | Akron Ohio Website Design - Akron Web Development, Cleveland Web Design, Business Website,Web Programming, Akron, Summit County - Services Cuyahoga Falls Websit

2. […] and the progress we’ve made to date on the transformation (which I wrote about in the last post). But, yes, the stock price is down for Nortel, as it is with every one of our competitors. Tech is […]

   March 13th, 2008 at 6:46 pm from John Roese’s Blog » Blog Archive » Comments on Your Comments

Comments

1. The ads made me want to jump out the window. Maybe the products are great, but the ads were not.

   Why is it important for narrators to have “British” accents? All the little “windows” became quite annoying. Too much flashy animation (typical of ads these days–overkill!) Music scores were cheap (electronica) and unnecessary IMO (reminded me of those 1/2-hour TV “Home and Garden” shows my wife is addicted to.

   Forgive the negativity, but I had a really bad day in the stock market. (Down 99% and counting.)

   March 6th, 2008 at 4:43 pm by Bob

2. Earlier this week, Cisco launched its ASR 1000 (Aggregation Services Router), positioning the technology for both carriers and enterprises.

   In enterprise markets, it’s effectively Cisco’s new enterprise core router. Since it was built for multi-vendor carrier environments, this opens the door for enterprises to look at converged branch solutions from other vendors, to realize better network performance, better reliability, and lower TCO, and to unlock themselves from Cisco. See my rationale at my latest posting.

   In carrier environments, I understand the positioning for MPLS networks as a WAN Edge aggregation device. I wonder what the role of aggregation routers would be in carrier PBT-based metro Ethernet networks as promoted by Nortel, or is aggregation done more simply at Layer 2 at considerably lower cost. Your views would be appreciated.

   March 6th, 2008 at 5:35 pm by Tony Rybczynski

3. I really didn’t see myself represented in any of the ads.

   Nortel obviously sees itself as global outfit, not based in Canada/NA. Without looking at them first, I’ll bet the journals are,too.

   March 6th, 2008 at 6:46 pm by Required

4. I have seen the ads in other parts of the world. You would be surprized how much of the world has a British accent, or something close. Keep moving forward one step at a time Nortel. Perhaps in 10 or 20 years you can get the stock price up also.

   March 7th, 2008 at 1:46 am by Nortelhand

5. Good Morning John,
   All of our competitors shares seem to be rising this morning and we are down another 3%. We are down for the 8th consecutive day. Shares have lost 60% of value since November.I geuninely appreciate your efforts to communicate with everyone and tell the Nortel story. However, sure would appreciate some executive activism regarding the stock price.

   March 7th, 2008 at 10:10 am by Lee

   March 7th, 2008 at 10:34 am by Lee

6. Minor correction to post #5 by Lee

   DOWN 5.63%

   March 7th, 2008 at 11:52 am by Frank

7. The price per share sure does suck, day after day after day. I have seen this with a few stocks over the years, and most of the time it ends in bankruptcy/reorganization. I am beginning to wonder if that scenario has not leaked out from someone close to Nortel’s financial group? Something like if we have a slower than expected 2008 that the cash burn will force the company to reorganize. Not saying I know anything, but Nortel has taken quite a drop over the last 6 months. Hmmmm.

   On the brighter side, If Nortel does not go bankrupt and can put together some decent earnings in 2008 (say $0.8 to $1.2), it is selling a quite a bargain. We are in year 3, and they should be able to show some cool new products they can win with? I guess time will tell, but the way things are looking we should not be too optimistic; I sure wish that was not the case.

   Sales, go out and win enough to keep NT floating in 2008. Perhaps 2009 will be better.

   March 7th, 2008 at 1:44 pm by Nortelhand

8. John,
   Your ads are rather long and still it’s quite unclear who is the targetgroup - consumers or people actually responsible for purchasing IT infrastructure? Your payoff “Business made simple” is simple but not exactly differentiating you compared to others. One of the great fathers of marketing, Rosser Reeves, said that marketing always should seek out the truth of the product and I really have troubles seeing what’s the truth, the promise or the evidence that Nortel delivers in a way giving “us” a competitive advantage. I would like to ask why you are using media such as CNN when it would seem like the infrastructure purchasers are rather few and ought to be reachable via phone, direct mail, internet or other kind of more personal contact? I think that both the marketing and PR of Nortel needs a serious revamping and it’s currently being reflected in steep declines in share prices. Time for real change!

   March 7th, 2008 at 5:23 pm by Torben

9. It’s great you have all these new products and innovation, but if Nortel can’t translate these into profits then it absolutely of no use. Sell the darn company before it goes bankrupt. Shareholders have seen their value vaporised in just a couple of months and no one at the helm seems to give. Getting burned for the second time. Not ever going to invest in this company again. I’m pretty sure lots of other shareholder shares the same sentiment. Unbelievable.

   March 7th, 2008 at 5:26 pm by John N

10. I think the most important thing for Nortel is to be profitable. My suggestion
    is to reduce the size of company and cut the revenue. Just leave the part of business
    which make profits. If Nortel can be profitable, even the revenue is only 2 B,
    the stock will stop dropping. Right now,the Market Cap is less than 3 B.

    March 7th, 2008 at 8:22 pm by hobby

11. May 15th will be the half way point of Nortel’s transformation towards becoming a great company. Again.
    Sorry for the negativity but judging by the stock price since Mr Z started the journey I am wishing I stayed home. Stock value and market cap is what any CEO is judged on. Period. Mr Z must find away to reward long suffering shareholders that believed in what he had to say, if he cannot he must step aside and give his large pay packet back.

    March 7th, 2008 at 8:50 pm by Mike

12. Firstly: the guy in the ads does not have a British accent.

    Secondly: the ads are targeted at raising awareness of Nortel’s all round capabilities in a wider Enterprise target audience (while telling of the company’s carrier strengths). This is where the growth is and where marketing of this type can have the greatest impact.

    The problem Nortel has is trying to efficiently market to both carriers and enterprises when it’s marketing teams only really understand the enterprise business.

    The company needs to decide where it’s going to play.

    March 8th, 2008 at 7:02 am by Brunonero

13. I’d like to “second” comment #8.

    March 8th, 2008 at 10:51 am by Bob

14. Hi John,
    Do you think it’s time to buy some NT shares? I will buy some at 4 CAD next week. It’s the time for Nortel to make some changes.

    March 8th, 2008 at 11:47 am by Tom

15. I 100% agree with what Torben’s comment (#8).

    March 8th, 2008 at 3:15 pm by Andrew

16. Below is a list of some Nortel competitors. They sure are predicting a rosy 2008 compared to Nortel. How come Mike Z says it is so hard to grow the business? Do Nortel products suck? Do the perspective clients feel Nortel will not be in the business in the future? Do the clients feel Nortel can’t execute? Whatever the reason, it seems to be affecting only Nortel.

    Ciena (CIEN +10%) followed in the footsteps of network equipment makers Cisco Systems (CSCO -0.2%) and Juniper Networks (JNPR -4%) with in line or better than expected earnings in the most recent quater. Gary Smith, Ciena president and CEO told CNBC, “We are at the fairly early stages of very large demand (growth) for bandwidth, both consumer and commercial… We are not seeing a slowdown with our customers.”
    Ciena grew its Q1 (Jan) revenue by 37.8%, inline with expectations, and projected up to 27% revenue growth for the year ending in October. Ciena’s Q1 EPS jumped 113% to 47c (ex-items) vs. 22c, and 8c above the consensus estimate.

    On Tuesday, Cisco chairman John Chambers said he was “even more comfortable” with the company’s long-term annual growth forecast of 12% to 17%. However, growth in the current quarter is pegged at 9-11% and Q4 growth is seen at the lower end of the 13-16% range. Cisco reported an inline 15% EPS increase to 38c in its January quarter.

    On Thursday, Juniper Networks (JNPR) offered full year revenue guidance of $3.4-$3.55B representing growth of 20-25%. Juniper has a long-term revenue growth rate target of 20%. JNPR sees EPS of $1.08 to $1.13 a share, on revenue of $3.4 billion to $3.55 billion. The company also announced a $1 billion share stock buyback plan to offset options awards to employees.

    Sycamore Networks (SCMR -0.1%) grew revenue by 4.7% Y/Y in its January quarter.

    Nortel Networks (NT) is trading at a new 52-wk low. The Company reported a Q4 loss of ($1.70) per share on a tax expense, but sees revenue growing in the low single digits this year, after a (3.7%) decline last year.

    March 9th, 2008 at 1:00 am by Nortelhand

17. Thanks to Bob (comment #8) and Andrew (comment #15)for supporting my prior statement.

    After many years of marketing experience, I made this definition of marketing: “Aimed at leading the entire organisation towards the building of customer acceptability, branding is an iterative process focused upon creating a total brand experience where the delivery of strong evidence is the key to making the brand constitute a convincing promise in the minds of targeted customers – the stronger the evidence the better the brand performance.” Well, while everyone can either agree or disagree in this definition, I personally learned that the brand promise must be both differentiated and highly relevant for the target group in order to succeed in todays cluttered media picture.

    When watching the Nortel ads I get the feeling that I could replace the brand name with Cisco, Alcatel Lucent or another IT infrastructure company… and they would still make equal level of “sense”…which means they are not differentiating “us”. The problem might be that the ads have to be understood by everyone watching CNN (and similar media) and therefore don’t communicate key information targeting the “experts” = “customers”. As mentioned in my previous comment the payoff “Business made simple” is not nailing down what really makes Nortel different…would Cisco or the others say it’s not the case for them?

    The whole approach reminds more about consumer marketing than B2B marketing and I’m definitely not convinced this is the best way of spending the marketing resources - there MUST be more direct ways of buyer communication, which are both cheaper and more efficient!?

    In any case there is no doubt that customers currently don’t perceive Nortel as delivering the evidence for whatever promise they try to build in the minds of customers…if they did, Nortel would deliver double-digit growth rates and we would all have smiles on our faces due to constantly increasing share prices.

    I truly appreciate and welcome John Roese’s initiative to start an open debate but I’m missing aggressiveness especially from the CEO…maybe it could also help customers to develop a higher belief in the Nortel brand (people tend to believe less in companies that are uncertain about themselves)?

    March 9th, 2008 at 9:54 am by Torben

18. (correction) Sorry Bob…your comment was no 13…thanks again!

    March 9th, 2008 at 9:57 am by Torben

19. Torbin,

    Thank you. With that said, how would you rate the adds of companies such as cisco (the human network), hp, motorola, microsoft, oracle etc? Are they not equally nonsensical? IMO the industry is several levels removed from the average user and thus the ads are reduced to “a warm fuzzy” feeling about the brand and thus it is very hard to communicate any sharp differentiation and “certainty” in a short period of time. I think the ads from these companies are usually pretty nebulous.

    Similarly, the product placement in some of the popular TV shows from actual phone sets to “signature” audible rings (think “24″) is also subtitle and non specific.

    The only place I see this differentiation is on the “pseudo news” interviews on the financial “home shopping” networks.

    Over the past decade (since the “come together” ads) I notice that nortel tends to launch ad campaigns when they are under negative scrutiny for other reasons. The ads seem to be an attempt to blunt the other negative press, not truly communicate any sense of specifics about the brand.

    The one “nebulous” ad series from a company that I find particularly good is the Dow “human element” ads.

    March 9th, 2008 at 11:19 am by many

20. I googled “Nortel CEO” and took a bit of time to read the numerous press clippings from the last couple years. Not once was any hint of future bad news expressed in any way.
    Nortel has turned the corner.
    Nortel is a stronger company now.
    Nortel can now focus on increasing shareholder value.
    The bad times are behind us.
    Nortel will be a great company.
    etc. etc. etc.
    With all that positive upbeat news what else would a long term shareholder expect? Surely not a 78% drop in the share price since Mike Z took over or the stock now at all time lows since summer of 2001.
    Many people, myself included trusted in the new Nortel management to deliver but sadly they have not.

    March 9th, 2008 at 11:57 am by Fred

21. Dear “many”,

    I tend to agree with your general assessment of the ads of this industry, but it’s Nortel shares I own (I actually believed they could pull off a turnaround although I’m more doubtful now)

    The lack of differentiation in the ads of Cisco and alikes leaves Nortel with a chance as they are at least not worse. Emotional advertising has for many years been promoted by overly creative advertising agencies but the truth is that without a functional aspect, this kind of ads end up being mere entertainment.

    To enter the subconscious mind of customers there must be a rationale (justification) that can be accepted by the conscious mind - emotions open the “gate” between the conscious and subconscious minds allowing us to place the differentiated functional benefit in the ever so important subconscious mind (I normally call it the “database”).

    When I was teaching marketing on Copenhagen Business School I always referred to Rosser Reeves’ USP (Unique Selling Proposition) concept and I always emphasized that functional benefits shouldn’t be 100% replaced by emotional ones unless it’s absolutely needed (e.g. cigarettes).

    When I 10 years ago launched a new beer brand in one market, I emphasized how it’s less bitter = more drinkable. In a market with preference for highly bitter beers, everyone laughed of me. Noone is laughing today as the brand has a 20% market share and has become the only success in this category for the last 30 years. There is naturally a big difference between beer and IT infrastructure but the principle is the same. And I guarantee you that it’s possible to communicate the brand essence in 30 seconds and that it’s a “piece of cake” in a 1 min 20 seconds Nortel spot!

    One bigger concern of mine is the choice of media channel for the Nortel ads, which (as mentioned before) seems like shooting sparrows with canons - probably 80% or more of CNN viewers have none or little interest in purchasing Nortel products = money wasted. I agree with your observation that it looks like Nortel is trying to send a message to the investing community rather than to customers - if that’s the case then they are really wasting “our” money big time…I hope they have better reasons and that someone from Nortel will participate in this blog to explain the thinking (it shouldn’t be the job of the CTO)!

    March 9th, 2008 at 12:26 pm by Torben

22. Torben - great post. My personal favorite ad campaign for reasons of personal entertainment as well as effective messaging is the Apple Mac series. Not only is Apple building an image that people want to associate with, they’re simultaneously articulating Mac differentiation. The one thing I haven’t seen in any Mac ad is anything that would appeal to a CIO. The ads are sharply focused on the consumer.

    March 9th, 2008 at 1:45 pm by Another Nortel Watcher

23. Dear Nortel Watcher, thanks for the positive feedback. I completely agree with your comments regarding Apple - their positioning is very well defined and precisely communicated. Functional benefits communicated in a very emotional way, simple to understand for the target group and offering something clearly different from competition. The marketing of Apple is furthermore personified in the personal engagement of Steve Jobs, which is a short term advantage but it could probably turn negative if he for some reason would have to step back.
    This is an interesting debate initiated by John - I would only wish that the relevant Nortel Executives would participate…hopefully they are just too busy turning the company around

    March 9th, 2008 at 3:33 pm by Torben

24. If I were a customer and I were to look at the most recent history of this management group…..why would I buy Nortel Products. Management seems to be inept in following through on the most basic plan….other than laying off more and more employee’s. If I were a customer, I would take my money and invest in equipment from a company that does not have a questionable history.

    Management has done nothing to give any comfort to its shareholder’s and seems to be reluctant to invest themselves….again I question why customers would buy off Nortel with all its baggage

    March 9th, 2008 at 4:13 pm by Brad

25. Brad, you have hit on a very serious issue for Nortel. So many of Nortel’s recent new product initiatives have died on the launch pad that it would take a very brave customer to sign up to anything new from Nortel. That must be a tough problem for the nortel sales teams to deal with.

    March 9th, 2008 at 5:08 pm by Another Nortel Watcher

26. Great thread! Maybe the subject matter is a little “off topic” to what should be discussed on the CTO’s blog, but none-the-less “on topic” WRT this, do I dare say, once-great company.

    March 9th, 2008 at 8:49 pm by Bob

27. I think there were too many negative and unfair comments on Nortel in all front. These are nothing more than people want to take advantage of the situation and create more damage on the stock price. I am sure the Board of Directors and Senior Management aware of all our concerns by now and are taking serious actions (including effective PR initiatives) to remedy Nortel’s image and to improve the Company’s sales, as bottom line improvement is a result of combined formula of increase in sales and improvement in gross margin. I believe that our share price still has upside potential as soon as there is some meaningful win (as MR.Z suggested before) announcement. I do hope that our constructive comments and suggestions are channel up to senior management, including MR.Z and Mr.B. May be investor relation blog should be established.

    March 9th, 2008 at 9:33 pm by Herb

28. Dear John, first of all I thank you for having the guts to start this blog and for addressing some of the pertinent issues that face Nortel at present. I have been a long time lurker on this blog site, and this is my first post. I am also a shareholder, and have been since 2002.

    John, you obviously care about Nortel and want to see the company succeed and prosper. However, I believe you and your peers at the senior exec level at Nortel have a serious disconnect with regard to what the shareholders (and ultimataly the share price) is telling you.

    I applaud your optimism but the truth is Nortel’s share price is at an all time low. It’s not just bad John, or kinda bad, the share price is lower than it has ever been in the history of this company! This is not a vote of confidence from your base.

    So, either you and the senior folks at Nortel can continue to bury your heads in the sands and preach hyper-connectivity or business made simple or another buzz word, OR, you can wake up and smell the coffee and understand that your shareholder base wants to see results.

    If you really think Nortel is destied for sucess, than I would start with a share buy back program to take advanatge of your histically low share price.

    A $ 1 Billion buy back would send the message that Nortel’s BOD and Senior Management continue to beleove in the long term sucess of this company, AND, are willing to put your money where your mouth is.

    Good luck and wishes,

    The Fat Lady (who has not yet sung).

    March 9th, 2008 at 10:27 pm by the fat lady

29. I agree with Herb - too many negative, unfair, and I’ll add unsubstantiated comments. I’m wondering, for example, ANW (#24) if you’re simply a Nortel competitor trying to throw a lot of FUD into the system. I’m not aware of any significant new products that have died on the launch pad recently. Quite the opposite. New products are coming on and customers are signing up. Just one example - somewhere in the neighborhood of 35-40 customers have signed up for Carrier Ethernet/PBT alone in the last year. And the same is true with other products. Nortel’s launched WiMAX, 40Gig, a host of Unified Comms products, and has been chosen by Verizon as a trial partner for LTE. All new products and initiatives.

    I understand the venting given the current stock price, but if people are really trying to see Nortel be successful, how about some constructive comments versus the bashing and the one-liners. That’s not helping anyone - expecially shareholders.

    March 10th, 2008 at 12:19 am by Optimistic about Nortel

30. Dear Herb and Optimistic, please let me know what to say positive about Nortel that will increase the share price. I lost a smaller fortune and big part of my savings on NT shares and I frankly feel that the management is making too weak and uncertain statements - leaving little confidence to investors.

    My former comments about the Nortel advertising, were naturally subjective and I’m sure there are good arguments to justify their strategy - it would maybe be nice to hear these arguments from NT’s management instead of leaving it to us “ignorants”.

    Generally I feel there is little sense in starting a blog if it’s only to cheer and make each other believe that it’s all positive. I suppose that John started this debate in order to get some honest input - personally I try to be both honest and well-argumented in my statements, but that’s naturally up to every individual to judge.

    In the hope there will be more to cheer about in the future…

    March 10th, 2008 at 6:10 am by Torben

31. It is disheartening to watch my investment go down the tubes. CISCO expressed an interest in buying Nortel a few years ago. It is time to sack Mr. Z and hand over the reins to CISCO. It is in the shareholders best interest to do so.

    March 10th, 2008 at 8:14 am by John

32. Torbin,

    Very well articulated points all. I am (clearly) not a marketing major, but I agree the choice of CNN as a venue is a waste of money. A more targeted TV choice (probably stock holders and possibly CFO/CTO types) would be Bloomberg or CNBC.

    I also wonder (out loud) what the brand essence is for a company that is trying (still) to cover every segment of the market? This may also be confusion on the part of their marketers. Their past legacy products have been just about everything in a single package, while the network (and market) is morphing into discreet network elements that perform much more specific tasks. Their strategy is to migrate their legacy software to commercial off the shelf hardware (ditching the legacy purpose built hardware) and onto different platforms. Again, I don’t know how they could communicate that “essence” of change without a lengthy ad campaign.

    They do have some startup in their DNA, I remember when they were very small in the late 1970’s and early 1980’s, taking on at&t (western electric) in the NA telecommunications market. The main reason they beat them was they got to market (two years ahead in some cases) with several important capabilities including regulatory changes. They could not have done this however with a GE “six sigma” state of mind.

    March 10th, 2008 at 8:22 am by many

33. Optimistic about Nortel

    I agree nortel has not had any new products lately to be killed.

    I think ANW is referring to the “Neptune” project where nortel development completely lost focus and tried to build a “god” box.

    What they really wanted to build (at least what was the Neptune product before I left) was essentially the vivachi (tellabs) box, which has; both a significant switching AND routing fabric, does MPLS (martini), Pseudowire (PWE3) and Layer 2/3, and does both 10GigE and OC48 at the phy. This coupled with a easy to use and reliable configuration interface and partnering with a good traffic engineering platform vendor would have been a very good and timely product (about five to six years ago) and been positioned to replace the aging passport line which is being ripped out and replaced now with cisco, tellabs, ALU, Ciena adnausium.

    The sad part is that nortel had a huge installed base of passports and it was theirs to lose. Customers were looking for a migration path and nortel product management failed to deliver.

    March 10th, 2008 at 8:36 am by many

34. Hey, Many. Thanks. You often bring a sense of sanity/perspective to the discussion, so it is appreciated. I don’t know the details behind Neptune, but I guess my point is that in today’s world, Nortel IS getting new products out the door and customers ARE signing up. If ANW is talking about Neptune, then that is old news. For whatever reason, those decisions I’m assuming were made during the bubble burst when the company was focused on survival and fixing its financial woes. That is all behind us. The regulatory issues are resolved and we are in the best financial shape we’ve been in for years. If you ignore the non-cash tax write down, Nortel actually MADE $$ last year ($154M), gross margins are at target, and other financial indicators are improving. Now, there’s still work to be done – I’m not arguing that – but Nortel is making progress and is in far better shape than it’s been in a long, long time. That’s why I remain optimistic (especially when I reflect back several years ago – now THEN we were in bad shape). It is taking time – and will take some more time – but this ship is turning and it’s heading in the right direction.

    March 10th, 2008 at 9:50 am by Optimistic about Nortel

35. I will be surprised when there is one day that NT stop creating a new historical low.
    I am ashamed of the CEO who got 11 million paid last year.

    March 10th, 2008 at 10:05 am by Tom

36. Optimistic,

    There is potentially good reason to be positive about 40G optical. Not so sure about PBB/PBT, not that it is not a good idea, just that carriers do not appear to be buying it (I suspect that it is because they really need to concentrate on the edge costs and available bandwidth in the core at the moment).

    WiMax is too confused with LTE and the dust will need to settle down quite a bit before carriers are going to bite on that (they just got 3G rolled out in the major NFL cities). Perhaps nortel could make an effort to settle the dust, perhaps they are.

    Hyperconnectivity and Unified communications are too ill defined to get exited about and Health Care is vertical marketing (perhaps connected, but the connection is not clearly articulated)

    March 10th, 2008 at 11:27 am by many

37. Optimisitic - off the top of my head and in order I think…CS3000, Neptune, MCS5200, Wireless Mesh…what do all these have in common? 1) strong BNR-like technology, 2) well positioned for leadership at the early edge of the market, and 3) abandoned on the launch pad or subsequently starved after budgets-by-excel, ownership battles, and/or sales-by-TDM-experts.

    I think 40G and LTE may survive as programs simply because even the luddites in the Nortel cabinet recognize that if Nortel can’t play in these segments, it’s time for the fat lady to sing. Having said that, I expect that Nortel only has a chance for leadership with 40G. The Nortel wireless organization is a mess top to bottom so I give them very little chance of effective large scale execution on a WiMax or LTE program.

    Verizon *must* keep Nortel involved in their network for a while because they are so dependent on Nortel to keep supporting the installed base of CDMA gear. That doesn’t mean that Verizon is impressed with Nortel’s LTE program or that Nortel will be awarded more than a token amount of business going forward. Time will tell.

    As for the next Nortel program to die on the launch pad…I predict it will be IPTV. It has all the signs. You heard it here first.

    Optimistic - now it’s your turn. Explain with some justification why you think we should be optimistic. Pay particular attention to growth engines, market timing, Nortel leadership strength, and ability to compete.

    March 10th, 2008 at 12:16 pm by Another Nortel Watcher

38. I lost a ton money on Nortel, I sold all of my NT stocks two weeks ago.

    March 10th, 2008 at 1:14 pm by John

39. Everyone is missing the point. Nortel has not been successful (for many years) becasue they are constantly outsold and have no coherent channel strategy. The sales force for many years was over compensated and able to settle into a sense of comfort without pushing the envelop. Likewise, the me-too channel strategy across all regions is a joke. The channels know the market and what will sell…Nortel needs to listen and quit trying to push antiquated programs down their throat for only a short term benefit.

    It is not about TV ads…their marketing focus should be on changing the GTM model and removing the very stale sales leadership, especially those that “manage” the large reseller channels.

    March 10th, 2008 at 1:59 pm by Missing Link

40. Like to thank everyone for their posts here. A refreshing change from “other blogs” that will remain unnamed.

    We did pretty well, today, considering the rest of the market. Only down $0.06 (US.) Like Torben, I lost a small fortune with this company. (Only myself to blame for being greedy and having the “all-the-eggs-in-one-nest” syndrome. Did not see the accounting scandal coming, though, and was totally caught off guard.) Figured we were on the rebound after the reverse split, but was I wrong! Kept telling myself “we’re on the way back to greatness.” Today the “Settlement Shares” are worth about 1/5 of what they were. The company shares about 1/99th of their high. The good news just keeps rolling in! Now why didn’t I sell when they got rid of “Family Day?” ;>)

    March 10th, 2008 at 4:02 pm by Bob

41. The company should say something to the market. Otherwise, the stock price will below 1 dollar again. Maybe need another 1:10 to make stock price higher than 1 dollar. Why not buy back some shares? Or sell the company? Nortel worth only 2 billion dollars now. Why not sell to Cisco or Motorola or Huawei?

    March 10th, 2008 at 4:19 pm by Dob

42. address the spiral downwards for goodness sake.

    March 10th, 2008 at 4:35 pm by scott

43. Mr. Z regardless of what you do for the next two years….what a terrible legacy you have associated to you and the countless lives that rightly or wrongly have been destroyed by this company

    March 10th, 2008 at 4:42 pm by Brad

44. The ads were terrible and techie. Also 50% savings on PBT. If you know how this is calculated please pass it onto your marketing, business development and sales teams. Apparently they have no clue on how 50% OPEX and CAPEX is broken down into. For the CAPEX again its not because of PBT but because of cheaper gear. And again waht a bunch of bunbling product managers. The clones for 8600 do not include all the routing secret sauce. The routingversion does not have the PBT sauce.

    Only Nortel!!

    March 10th, 2008 at 6:13 pm by D-O-A

45. if execs get pay rises while people are being laid off in the thousands… i shudder to think how much more they will get if the comapny does make money?? and at whose expense will THAT be? anyway I hope this stock makes me atleast a little money….

    March 10th, 2008 at 6:24 pm by joey

46. I lost my entire retirement on NT!!

    John, do you actually read the responses to your blog at all?

    March 10th, 2008 at 6:30 pm by ex-nortel

47. John, Management Team and BOD,

    You need to address this downward spiral. You talk about having integrity so please show it and do something — I think buying back $1.5B worth of shares would be a good first step.

    Please remember your interest should be for the shareholders and not for any other reasons like having a vision of running a much larger company — If you want to do that then buy the shares and take it private (At the price it was before you joined)!!

    Also the blog about the advertising while the stock price is tanking - Is like the Titanic Sinking and the Capitan and the first officers rearranging the furniture — It just doesn’t make sense!

    Please as you can see we need you to address the stock price issue!

    March 10th, 2008 at 10:03 pm by disappointed

48. ANW (#37) - I’m not going to pretend to have all the answers and I’m certainly no expert on marketing or market timing – and maybe sometimes I drink the kool-aid – but for what it’s worth this is what I know and what I believe and some of the reasons I remain optimistic.

    - Strategy. Before Mike Z came on board, virtually no real business strategy (other than survival) existed that employees could understand or articulate. A lot of time was spent trying to figure it out. Today we have a strategy. Whether people believe it’s the right one or not is a different question, but most employees would be able to tell you today what our strategy is and where we’re placing our bets.
    - The immediate bets seem to me to be focused on areas of growth and opportunity: 4G, Carrier Ethernet, 40G+ Optical, Enterprise, and Services. In the 4G space, we’ve got WiMAX and LTE and a transition path for 2G customers to get to 4G (and we’re winning contracts); our PBT and Optical products are absolutely world-leading (and we’re winning contracts); on the Enterprise side, we’re making significant R&D investments in ICA/Unified Comms, SOA, Ethernet switching and mobility (and in ICA alone had more than 600 customer wins last year); and Services – we are definitely focused on transitioning to be more of a services/software company (and are making progress - double digit growth last year and from what was said on the analysts’ call expecting to outperform in this area this year).
    - Our book to bill is over 1%.
    - Our relationships with Microsoft and IBM seem to be going well.
    - I think Asia holds tremendous opportunity. I can’t remember what we’ve said publicly about potential Asia growth right now, so I’ll leave it at that – and if I find something will let you know.
    - In terms of leadership, lots of people have left comments questioning the leadership team, but I honestly believe that we’ve got the strongest set of leaders that, again, we’ve had in a very long time. For the first time since BNR, we actually have a real CTO, and he’s a good one. He’s put Nortel back into the industry dialogue in a lot of areas (and made us relevant) and he’s been trying to recreate some of the good things we lost when BNR was dismantled. Bill Nelson (new global sales leader) still needs to prove himself, but he looks like a solid addition to the team and has strong ideas on what needs to be done to accelerate sales momentum (I guess we’ll see what happens this year). Ditto for Steve B, the new CIO, and Pavi Binning, the CFO. Time will tell, but they look like they are going to be very solid contributors who will make an impact. Richard Lowe has a long history with Nortel, is a strong leader and knows this company inside out. I think it’s good to have Nortel experience and history at the leadership level. Lauren Flaherty is the best CMO this company has ever had. Past CMOs were a lot of flash, with very little substance or understanding about how things really work in the trenches. Lauren understands how things work and as a result she’s making fundamental and systemic changes that are having a real impact. And, with Dietmar, we finally have someone who knows Services. That was a long time coming. Anyway, the list goes on. Go onto nortel.com under “About Leadership” and you can read bios on all of them and the others I haven’t mentioned. From my view, a very impressive list of people and credentials, who I sincerely believe are making a difference.
    - You asked about ability to compete? That covers way too many dimensions for me to cover here – I’m already way over time and space! – but let me say that I think we’re putting a cost structure in place that will certainly better position us to compete globally; we’re partnering with some of the biggest and the best companies in the world; and I think we’ve still got some of the best and the brightest R&D minds in the industry
    - And, perhaps most significantly, we are back to operating like a normal company. There are basic and fundamental processes in place. There’s career mobility, career development and training (even as we restructure). And, there’s a sense of energy. For years before Mike Z, there was no sense at all of any kind of normalcy in the company and certainly no energy. People were going through the motions. Today, most people know the direction we’re heading and are again excited about what they’re working on. (Don’t get me wrong, there are still pockets of cynics and naysayers, but those are much, much fewer than they were.)

    So, ANW, not sure I actually gave you any information to change your mind or make you feel more optimistic, but that’s my reasoning. The Nortel of today versus the Nortel of 4 or 5 years ago – when again the stock was at an all-time low – are two very, very different companies. Although I’ve always been bullish on Nortel, back then I was not so confident (although I was certainly hoping and praying for success). Today, I am much more confident - for all of the reasons above.

    March 10th, 2008 at 11:00 pm by Optimistic about Nortel

49. Optimistic, I recognize that your response is heartfelt, so I won’t push back too hard. Just a few points this time.

    It’s too soon to pass judgement on Lauren Flaherty. Her first campaign has just started. To be honest, I don’t see a lot of fundamental differences between what she is doing and what Clent Richardson and Bill Connor did. In my opinion, Clent Richardson was a more compelling evangelist.

    Consider Richard Lowe. he may know the company inside out but so would a janitor who has been there that long. The problem with Richard is that he doesn’t know the industry that his business participates in inside out. He is not a sought after speaker and when Nortel marketing inserts him in interviews or public forums, he almost always shows his ignorance. That is why I think the Carrier business is doomed.

    John Roese is the first technical CTO Nortel has had in a while but he is frankly out of his depth as a leader of people and a CTO for a company with as broad a profile as Nortel. He talks in too much detail in the areas where he is competent and he just talks too much in the areas he isn’t. And what has he done to strengthen the Nortel CTO team? Who has he attracted besides a couple of junior cronies from his old companies? In my opinion Nortel was in much better shape when Peter Carbone was acting as Nortel’s CTO but Nortel hasn’t really had an industry shaper since Robert Pfeffer supported John Roth.

    As far as all the programs go, let’s wait and see which ones execute effectively enough to succeed.

    Keep drinking the kool-aid…but don’t OD on it.

    March 11th, 2008 at 12:12 am by Another Nortel Watcher

50. Number 31. When did Cisco ever want Nortel, this is not true. Traditionally they spat at each other behind closed doors, and look at Cisco today, growing and tons of cash, and a stock trading honestly without a 10 for me 1 for you extreme split. Nortel is trading near where they last neared insolvency. 65 cents presplit today on NYSE! Already made lowest lows ever on TSX! They call it a dog.

    Cisco’s John Chambers when pressed if he wanted even a part of Nortel on ROB-TV a few years ago side stepped the question a few times until cornered to say, no. He was polite, complimented the engineers, and claimed he would not know how to do a large acquisition; later claiming they do not work. However, they did great with good companies, like Scientific Atlanta. Nortel’s acquisitions blow. Forget a Cisco buyout, Nortel is losing employees and shareholders they claimed to be working for. Nortel blows.

    Remember ethic Gary Daichendt who came from Cisco and Nortel did nothing to dismiss the slander, he had to come out and clear his own name. Look at new auditors after so many insider only CFOS, ethics officer to regain trust walks, what is anyone to think?!

    Will Motorola even take them should they part with thei cash cow as board members sit on the voting audit committee. MOT termed their last dance partner, even with unreliable numbers? I question if the passed by green CEO has soured anything there by defrauding a formal written agreement on several written occasions. He sure has with his $20 buying opportunity, downplaying mega revisions that doubled AFTER ultimatum settlement, or promoting than firing his pal that outraged many female employees. Now they want even more money? C’mon, when will the punch lines cease for this laughing stock?

    Endless contradictions since BSNL, PEC, Neptune, Putian, etc., to now leapfrogging WiMax to LTE with no 3G customers to sell to years out with a year of cash left? C’mon.

    This is year 3 into this 3 to 5 and they wouldn’t even come out and say, said for us to calculate like Currie said draw your own conclusions once. Why, are they scared of busting a stitch laughing if they did.

    Sorry John, but the company is a mess since one of the largest fraud on earth and so many still there, look at all laughable events since, the stock price, and realistic outlook, contradictions, etc…

    You will do fine but can you remotely fathom the endless lives this company has touched and to what degree as part of the moral majority? Do the right thing, this topic is a step in the right direction.

    Anyways forget Cisco. As a matter of fact, forget Nortel too, it’s a trainwreck, we can go on forever. Too many contradictions lacking credibility for anyone to remotely trust or take seriously at this point. I think its over.

    March 11th, 2008 at 1:09 am by Dimitraki

51. I will not enter further in to any debates about the sales or marketing efforts of Nortel. I just feel compelled to emphasize that it’s unfortunate how Nortel started this thread but seems not to be participating in it. There has been a lot of good relevant comments during this debate - probably some of them are an expression of the frustration all us shareholders feel and probably some of them right on the point. Most of the comments have been negative, rightfully so or not (when it comes to the company - not it’s share performance…that’s beyond discussion), but it appears as if there is no response from the Nortel management (unless they hide under synonyms). I frankly don’t think this is the intention with a good blog - if you cannot finish it, don’t start it…cause the discussion is just gonna end in a negative spiral. Involve yourselves in the debate or don’t initiate it in the first place!

    March 11th, 2008 at 6:38 am by Torben

52. Nasdag up with more than 2%
    Nortel down with 0,5%

    !!! THIS IS NOT WORKING !!!

    Let’s all write some very positive things about Nortel and hope the share price will go up…

    

    March 11th, 2008 at 9:36 am by Torben

53. WRT#52… I can’t think of a single thing.

    March 11th, 2008 at 10:13 am by Bob

54. WRT#53…are you in the top-management of Nortel??

    March 11th, 2008 at 10:14 am by Torben

55. WRT#54 LOL!! We are on the same “wavelength” it would appear.

    March 11th, 2008 at 12:33 pm by Bob

56. LOL! At least Nortel is very differentiated today…probably the only bloody share that is losing value in a market that is up with 3% … and the “responsible” people still didn’t answer all the good comments on this thread…wonder if they read it?

    March 11th, 2008 at 2:15 pm by Torben

57. Great Day! Nasdaq up 4%, How about our Nortel?

    March 11th, 2008 at 3:10 pm by Dob

58. I think that all responders have a responsibility to discuss these issues in a clear and non antagonistic manner. If you want to throw around generalities like NT blows etc….well, that’s what “All about Nortel” is for. Let’s try to be a little more constructive and civil in our disagreements. Please!?

    March 11th, 2008 at 5:02 pm by Larry

59. WRT#56 >

    Best guess is yes (at least the admin does.) It will be interesting to see what the next post brings.

    WRT#57 >

    A pretty good day …at least we didn’t go DOWN ;>)

    March 11th, 2008 at 5:51 pm by Bob

60. Wonder how “the pizza” was?

    http://blogs.nortel.com/buzzboard/2008/03/10/pr-field-trip/

    March 11th, 2008 at 6:22 pm by Bob

61. I agree with one of the comments above, if Nortel’s management really believe in their ability they should start a share buy back program. I understand they have debt burden but they also have indicated about possible acquisitions. Acquisitions price always come with a premium and it takes long time to integrate the two companies. Nortel shares are trading at all time low and it may be a good time to retire some shares through buy back plan to boost earnings per shares. A buy back of $1Billion will result in 30% reduction of outstanding shares. Again there is a big IF, buyback will only pay off if the company can start generating cash soon.

    March 11th, 2008 at 11:16 pm by Nasir

62. pleasw buy back or say something positive

    March 12th, 2008 at 6:00 am by Didier giaimo

63. Please Mr Z stop this madness and get this stock moving upward. Nortel has cost so many people so much.
    Enough

    March 12th, 2008 at 4:03 pm by Phil

64. How sad. The audience is almost begging for dialog and the blogger is silent. Unbelievable. Not surprising, just unbelievable for a company that so desperately needs to rebuild investor confidence.

    March 12th, 2008 at 6:34 pm by Another Nortel Watcher

65. please,please ,please buyback now brfore it:s too late

    March 12th, 2008 at 7:02 pm by Didier giaimo

66. please,please ,please buyback now before it:s too late
    thank you a very unhappy shareholder

    March 12th, 2008 at 7:04 pm by Didier giaimo

67. …good news today?

    http://blogs.nortel.com/buzzboard/2008/03/12/how-about-a-little-rational-exuberance/

    March 12th, 2008 at 7:30 pm by Bob

68. Well the rage is slowly simmering and by this years annual meeting at Ottawa in May. I am sure it will be at the boiling point. Say what you will about Nortel’s recovery the bottom line is the share price. Confidence will move the price upward. I see NO confidence in Nortel, the share price proves it.
    Mr Z said Nortel would be a “great company again” and the “share price would increase by many multiples” when he announced his 3-5 year transformation plan. I cannot stomach the total collapse of Nortel’s sahre price and market cap. What a sham, what a dog and pony show Mr Z. is running, it’s all smoke and mirrors. But the final straw was the pay increase. Now that took balls.

    March 12th, 2008 at 10:05 pm by Mike

69. Bob - yes it’s a good development, but let’s not overplay it. Nortel needs 5 or 6 of these to sustain and grow the business. This is a 2010+ play and I’ve not seen any market size forecasts.

    March 12th, 2008 at 11:46 pm by Another Nortel Watcher

70. mike z were are you please talk from one european to an other

    March 13th, 2008 at 5:38 am by Didier giaimo

71. Which came first, the chicken or the egg? I won’t guess, but with Nortel I do know that employee layoffs always precede downward spirals in company profits.

    March 14th, 2008 at 4:55 pm by Gary

72. Keeping in step with the current topic of Marketing ads, I would add that I remember the ads Nortel made during the 90’s. They were wonderful! Many an employee wondered why they were shown on places like CNN and who the intended audience was; but, I loved them and was so proud of my company. Made us really sit up and feel great.

    March 14th, 2008 at 5:45 pm by Gary

73. Unfortunately Gary

    The public viewpoint, as well as the financial market, view Nortel as a disaster. Mr. Z’s leadership is pathetic…. time he demonstarted true leadership qualities and address the issues…but he won’t

    March 15th, 2008 at 2:54 pm by Brad

74. John, it has been 73 comments and 9 days since this blog subject posted and no C-level participants have come forward to make a contribution. Very disappointing.

    Number 48 - Optimistic about Nortel - there’s more here than meets the eye to guess why you are so optimistic.

    March 16th, 2008 at 7:16 pm by nortel watcher

75. Will Nortel bankrupt soon? Try to sell Nortel
    to Huawei or ZTE. Please.

    March 17th, 2008 at 12:22 pm by Tom

76. Since NT beat expectations in November, the stock has proceeded in an almost straight line from 19 to 6. At no point during this slide did the stock retrace to the upside more than $2.

    And at no point has management seriously addressed the price decline. Mr. Z and company have simply acquiesced to the market’s erasure of 2/3 of NT’s equity.

    That inaction is almost as striking as the severity of the price decline.

    At current stock prices, NT’s equity is valued at about 18 months’ worth of current R&D expenses. And almost exactly at annual SG&A expenses.

    Despite the talk of cost-cutting, these expenditures are now wildly out of proportion to reality.

    You might think I’m wrong. But if you’re going to argue that R&D is the future, you have to explain the disconnect between past R&D expenditures and the current equity valuation: NT has spent about $5.5B on R&D over the past 3 years. Today, the market values the totality of NT’s equity at $2.6B, or a little less than half this amount. If the R&D is so productive, why aren’t the results manifest in the share price?

    And if you’re going to argue that the market isn’t properly valuing this R&D effort, you have to explain the disconnect between the current valuation and management’s complete acquiescence to the recent price performance. If the market doesn’t “get it,” why isn’t management either helping the market understand the company or stepping in with a share purchase of other strategic action to unlock NT’s value?

    Either the market or management is right, and management isn’t doing anything to help us understand why it’s right.

    The sad truth is that a GE-pedigree isn’t worth what we all thought it was worth and Mr. Z is a failure. There, I’ve said it and it’s out in the open. Failure. Unmitigated disaster. Ruiner of companies and ruiner of lives.

    Maybe the situation was unsalvagable. Maybe there was absolutely no strategic decision Mr. Z could have made to save NT. Maybe NT was destined for the bankruptcy courts all along and Mr. Z fought the good fight for as long as he could. I doubt it, but I’m willing to acknowledge the possibility.

    What is beyond question is that Mr. Z is not a leader. At least not a leader of Nortel. He is clearly not connecting with all of the stakeholders he needs to connect with to support his company.

    If you disagree with me, explain how Mr. Z demonstrated leadership while 2/3 of the equity value of his company evaporated. Listening to the crickets chirp while your stock declines 5% per day is not leadership.

    I throw down the gauntlet Mr. Z, climb out from under the rock you are hiding beneath and show me, show us all, that you are capable of leading a company.

    Take action. Either advance or retreat, but do not just sit and get pounded. While they don’t have honorary PhD’s, every boot camp jarhead knows that.

    I am nominating you for two awards: Worst GE-alumni CEO ever, and Worst CEO, 2008. The bad news is that the market has already seconded my nomination and is voting daily. The good news is that your fate is in your hands. Do something. Put that big brain to work. And either make me out to be the fool, or acknowledge that you are one yourself.

    March 17th, 2008 at 1:30 pm by Mr. Market

77. I could not agree more, Zafirovski has turned out to be an unmitigated and colossal failure. The stock market has had it with him and his management team. The 1.1 billion dollar unexpected tax charge in the last quarter was the very last straw. The market is telling you every day clear as a bell that they want to see him gone. He has absolutely no credibility left. Since he took over quarter after quarter after quarter of not only missed expectations, but WILDLY missed expectations. No more excuses, NONE. The honeymoon is long over. Time to pack up your bags and leave.

    March 17th, 2008 at 5:55 pm by Disgusted

78. I have been reading these post over the last couple weeks and thought I would post one of my own. Regarding #77 I agree but the final straw was the huge pay increase Mr Z took for himself. Can you imagine a guy with his performance recored over the last 29 months feeling he deserved an increase? The right thing to do would be to give back a large percentage of last years salary as a token of good leadership but I would hesitate a guess Mike needed the inrease to pay for that 1 million dollar stock purchase last year. Remember that “buying opportunity.” I always wonder why more execs did not follow Mike’s lead but now I realize why. These guys have created a doomsday approach to running Nortel and with the moral so low it is no wonder the stock has plunged. I am also a firm believer in stock manipulation and feel that hedge funds also control the downward spiral of Nortel shares.
    Take today for example, the stock closed @6.00 down .35. In afterhours with avolume of 300 shares the stock dropped another 13% or .77. That is a $1800 sell that dropped the stock that much. Give me a break. Nortel like all tech stocks have seen way better days but Nortel is always the % leader in decline day after day. Mr Z and BOD have got to do something to get this stock up by the “many multiples” Mr Z predicted back when the stock was $31. Shareholders have had enough and maybe we should all show up to the annual meeting in May up in Ottawa and let them know how we really feel.

    March 17th, 2008 at 6:38 pm by Mad as Hell

79. I’d like to nominate MZ for one more award - worst CEO hiring. Instead of surrounding himself with industry experts, he surrounded himself with people like himself, that I guess he felt comfortable with. That’s like setting up shop in Beijing and hiring a cabinet of English-speaking ex-pats and wondering why the business isn’t growing.

    March 17th, 2008 at 7:33 pm by Another Nortel Watcher

80. I would like an explanation or some answers from the management team of NT. I have been holding this stock for a long time and refuse to let go because I beleived in the company. Now I am in a position that it’s not really possible for me to sell because I have already lost nearly 90% of my investment at this point and will lose the remaining 10% in hopes there is a miracle that turns the company around and at least lets me recover some of my losses. I am sure the company is working hard to restore the business, but given the companies performance, why would the CEO feel deserving of his paycheck? Please NT, tell your investors what you are doing for them. I guess I have lost all hope for the company and its future but I will be here to sink with the ship.

    March 18th, 2008 at 3:56 am by Ted

81. Actually, I think it is sunk. We just do not realize it yet.

    March 18th, 2008 at 3:59 am by Ted

82. I want to know if Nortel is expecting to meet its debt obligation of $698 million in Sept of 2008. If someone can get the answer out of the CEO at the shareholders meeting and he indicates the company is not insolvent than I will hold on and ride out the storm for years if need be. Someone should asked why the insiders and not buying the stock and if the BOD is considering a BUY BACK of stock.

    March 18th, 2008 at 10:59 am by Jerry

83. Hey Guys, lighten up. Seems to me that the current stock value is about right for the shell of a company that Northern Telecom was before John Roth.

    The Man walked away with almost a half billion dollars in total compensation while paying for it by cutting sixty thousand jobs. His CFO then continued the tradition afterwards.

    There doesn’t seem like we have much to hope for now days. I don’t believe there is anyone out there that has the wisdom of a Solomon, the courage and charisma of a David, or the integrity and vision of a Daniel.

    The only thing I hope for is a modern day Nehemia who can “restore the breach” and “rebuild the old waste places”. However, that can never happen with someone who sees layoffs as the solution to every stock slump.

    The only thing I get some perverse pleasure out of getting older is the realization the our grandmothers were right about so many things; especially the part about “what goes around comes around”, and “the hole you dig for others you will probably end up in”.

    March 18th, 2008 at 4:43 pm by Gary

84. Deutsche Bank Valuation $28.00 on Nortel.

    http://www.allaboutnortel.com/2008/03/12/deutsche-banks-28-valuation/

    March 18th, 2008 at 8:19 pm by Jerry

85. Jerry - These numbers once again tell the story that this company needs to spin-off Enterprise and allow the segments with the best market penetration, lowest cost-of-sale, and highest margins to run as their own organization. If Nortel’s enterprise division did not have to deal with all of the Carrier Division baggage and lousy 3% margins then this would present a much different balance sheet.

    March 19th, 2008 at 11:53 am by Former_Lifer

86. What do you have to say about Nortel’s Managedd Services business strategy and how far or behind are you from your competitirs like Cisco, Aspect, Avaya etc.

    March 19th, 2008 at 12:58 pm by Alok

87. Our stock price was down 43.55% in 2007, and thus far into 2008 our stock price is down almost 57%.

    Where is Mike Zafirovski?

    There are various business news channels here in the States, and there are business news outlets in Canada as well.

    It seems appropriate to expect to see the Nortel CEO, Mike Zafirovski, championing the Nortel cause. Where is he?

    March 24th, 2008 at 3:19 pm by LAWRENCE POLLOCK

88. No one should be encouraged or excited because the CEO recently bought 83,500 shares. He needs to be reminded of all the shareholders he frightened out of the stock when it hit $5.73 with substantial losses. This is just a smoke screen. The company has real financial issues. He can afford to loose he recent purchase of shares in a bankruptcy. Why didn’t he buy the shares when the stock was nose diving after the FEB 27th earnings report if he felt so good about the financial stability of the company. Give me a break.

    March 26th, 2008 at 5:42 pm by Jerry

89. Now look at this DIRECTOR from Home Depot. He belives in the financial stability of the his company. The CEO of Nortel is risking a mere pittance. Don’t be fooled.

    Perhaps David Batchelder, a director of Home Depot, was inspired by the Easter theme of the resurrection when he decided earlier this week to spend more than $28 million to purchase 1.1 million shares of the home improvement retailer’s stock. Batchelder now owns 1.9% of Home Depot. Not surprisingly news of the transaction sent shares of the beleaguered retailer sharply higher in Thursday’s trading.

    March 26th, 2008 at 6:15 pm by Jerry

90. Jerry…good points. The cost to MZ of the shares he purchased is almost covered by the raise he was awarded while the share price was losing most of its value, so forgive me everyone if I remain a little cynical. I promise to change my attitude when the stock is north of $35 and trending upward. I will even adjust my attitude if I see solid evidence of real steps being taken to regain market share and turn things around. The LSS noise and all the grand statements about what’s going on in the industry are just jibber jabber.

    March 26th, 2008 at 7:00 pm by Another Nortel Watcher

91. I notice a number of comments about the purchase of stock by Mike Z and other Nortel executives. Early comments are related to “why isn’t Mike Z buying?” More recent ones (#88 above) question why he didn’t buy it earlier. For the record … publicly traded companies typically have policies that restrict when “insiders” can actually trade (buy or sell). Mike (and other insiders) can only trade within a very small, specified window of time, which is what he did. Nortel’s policy is set out in the company’s publicly available proxy, page 91, which says:

    “Use of Material Non Public Information and Equity Monetization Policy: All employees, officers, and members of the boards of directors are subject to insider trading laws generally. In accordance with applicable corporate policy, there are certain individuals who, by virtue of their role, are “deemed insiders”. Because they may have knowledge of, or access to, material information, the trading activities of these individuals are restricted by Nortel. Such individuals may not engage in any trading activity for specified periods of time throughout the year, known as “black out periods”. These deemed insiders can only trade during prescribed “window periods”, and even then, only if they do not have knowledge of any Nortel material non-public information at that time. Generally, deemed insiders are officers, directors, senior executives and other leaders, and employees who frequently have access to material information. In addition, applicable corporate policy generally prohibits deemed insiders from participating in any equity monetization program with respect to securities of the Company and NNL.”

    Mike is obviously required to trade in Nortel securities in accordance with Nortel’s policies and procedures, which include a specified window period, and this is what he did.

    March 27th, 2008 at 1:00 pm by Nortel Insider

92. Hey # 91 you should show me the exact document and post it here that supports your posted comments. I just don’t believe he had to wait until it got that low. Mike Z needs to brace himslef for an angry group of shareholders at the meeting on May 7th. By the way, it will be web cast for those that can’t attend.

    March 27th, 2008 at 5:36 pm by Jerry

93. In response to #92 … Nortel’s proxy is available through both EDGAR and SEDAR, and is posted on Nortel’s website at:
    http://www.nortel.com/corporate/investor/pc.html

    March 28th, 2008 at 8:52 am by Nortel Insider

94. In response to #93. Attention Shareholders. All shareholders who read this blog should check back from time to time to see if NORTEL will be honest and respond to this comment.

    The 2008 Proxy Statement is long and a little confusing to most individual shareholders.

    http://www.nortel.com/corporate/investor/proxy_collateral/1_proxy_circular_and_proxy_statement_english_feb08.pdf

    Would you be so kind as to copy and paste the paragraph(s) that pertain to the CEO’S choice to buy the 83,500 shares on March 24,2008 at about $500,000.00 when he could have bought them sooner after the Feb 27,2008 earnings report when the stock was $11.45 on Feb 26,2008.

    http://sec.gov/Archives/edgar/data/72911/000090342308000262/xslF345X02/zafirovski-f4_0325ex.xml

    In particular, what are the dates he could have chosen to buy the stock and let shareholders decide for themselves the motivation.

    He could have bought much sooner and prevented the stock from going into a tailspin. Do you think you can be honest enough with shareholders to explain why he bought at the near company low? If he was required to do that please explain.

    It is always perception that counts and it looks like he was aware of what would happen to the stock price after the Feb 27th earnings report.

    How do you explain the activity and NORTEL SEC filing with respect to the CONVERTIBLE SENIOR NOTES on the same day?

    DID THE PRICE OF THE STOCK TRIGGER A COVENANT IN THE SENIOR NOTE AGREEMENT? Was there a technical default on the note when the stock price got that low?

    http://www.sec.gov/Archives/edgar/data/72911/000090956708000247/o39598e424xbyx7y.htm

    THANKS

    March 30th, 2008 at 1:11 pm by Jerry

95. I think this Nortel Blog is a new form of fraud by Nortel. It does nothing to allay the fears and frustration of the sharholders. I post a lot and feel the anger of the shareholders. I am infuriated.

    I lost a substantial amount money (80%).

    All I need is some encouraging comments from Nortel to reassure me the company is solvent and can pay the debt due in Sept 2008 which is $698 million.

    I would even tolerate a few years for the turn around to materialize. I understand SEC restrictions on answering individual questions in this blog and any information that affects the compnay must be descimated to all news agencyies at the same time.

    In my view,there is absolutely no reason the CEO can’t give a news conference to explain any progress or plans that are showing signs of a turn around.

    The Dec 31,2007 earnings report doesn’t reveal the future reality since the stock price dropped from $11.45 on Feb 26th 2008 to the all time low of $5.73. That is really bad and time for shareholder panic.

    His buying shares gave a tempory boost to the share price. It appears to be in another sell off.

    I honestly believe the the ability of the company to repay the debt due in Sept 2008 is a real problem problem.

    I am going to contact my broker to help me understand what effect the senior convertible notes filed with the SEC in March has had a the cash balance of the company and if that further complicates Nortel’s ability to pay the outstsnding debt.

    Thanks to anyone who can help me understnd.

    The company debt is 4.5 billion and the company market cap is $2.44 billion. I really need someone to help me understand this lingering fear I have.

    It would be nice if someone in the know could explain the issues and options Noretl may face in paying off or refinancing debt.

    The below is the SEC filing document on the Nortel SEC web site that the holders of the senior convertible notes exercised.

    http://www.sec.gov/Archives/edgar/data/72911/000090956708000247/o39598e424xbyx7y.htm

    March 30th, 2008 at 2:21 pm by Jerry

96. I read with utter disbelief that Zafirovski is a Director at Boeing. How could this total abject failure of a CEO be on the board of this legendary company and what could he possibly contribute?

    March 30th, 2008 at 5:52 pm by Digusted

97. Recovery Report: Nortel Networks Ltd.’s Recovery Rating Profile

    Recovery Report: Nortel Networks Ltd.’s Recovery Rating Profile Primary Credit Analyst: Madhav Hari, CFA, Toronto (1) 416-507-2522; Recovery Analyst: Allyn Arden, CFA, New York (1) 212-438-7832; Publication date: 19-Mar-08, 11:35:08 EST Reprinted from Standard & Poor’s Ratings Services today assigned its recovery ratings to the unsecured debt issues of Nortel Networks Ltd. (NNL), Nortel Net… The issue-level ratings on the remaining unsecured debt at Nortel Networks Ltd. and Nortel Networks Corp. are unchanged at ‘B-’ and a recovery rating of ‘4′ was assigned to this debt, indicating the expectation for average (30%-50%) recovery in the event of payment default. Nortel Networks Ltd.–Credit Profile Corporate credit rating B-/Stable/B-2 Estimated gross enterprise value at default $2.3 bil.
    Date: 2008-03-19

    The below URL is very enlightening on enterprise value.

    http://beginnersinvest.about.com/od/financialratio/a/aa052405.htm

    March 30th, 2008 at 6:52 pm by Jerry

98. hey, jerry..,nt refinanced the converts months ago with new converts. they will use the cash proceeds from that offering to pay off the 2008 converts. relax. they have net debt of around 900 million. thats all.

    April 1st, 2008 at 5:13 pm by Larry

99. Nortel-BSNL: Round II
    March 25th, 2008 | by Mark Evans |

    The last time Nortel did business with India’s BSNL, Nortel lost its shirt….along with more than $260-million.

    Nevertheless, Nortel is taking another shot at getting a bigger foothold in the oh-so-large but oh-so-competitive Indian telecom equipment market by taking on a $100-million deal to supply BSNL with GSM lines.

    “India represents an enormous opportunity for Nortel in the carrier space, with its consistently high growth rates and increasingly mobile population,” said Richard Lowe, president of Nortel’s carrier networks division. “We have redesigned our GSM portfolio with this kind of opportunity in mind, making our solution much more cost competitive, without compromising the performance, capacity and coverage.”

    Last September, Ericsson was a $1.3-billion contract to supply BSNL with 13.1 million wireless lines but Ericsson and Nokia-Siemens, which had the second-lowest bid, passed on the other 9.9 million lines.

    Nortel’s earlier foray into India was driven by ex-CEO Bill Owens. The contract was worth about $500-million but it soon became apparent it was going to be a major loss-leader for Nortel. When Gary Daichendt was hired as COO in 2006, he battled with Owens to get out of India but lost that argument and, shortly afterward, resigned.

    Technorati Tags: BSNL, India

    April 1st, 2008 at 7:51 pm by Jerry

100. Hey Larry #98. This is from the Dec.31,2007 Form 10K. What part of this don’t I understand?

     Our high level of debt could materially and adversely affect our business, results of operations, financial condition and liquidity. In order to finance our business, we have incurred significant levels of debt.

     As of December 31, 2007, we had approximately $4.5 billion of debt. In the future, we may need to obtain additional sources of funding, which may include
     debt or convertible debt financing. A high level of debt, arduous or restrictive terms and conditions related to accessing certain sources of funding, or any significant reduction in, or access to, the EDC Support Facility, could place us at a competitive disadvantage compared to competitors that have less debt and could materially and adversely affect our ability to fund the operations of our business; borrow money in the future or access other sources of funding; refinance our existing debt, should we decide to do so; pay interest, or judgments, settlements, fines or other penalties; and maintain our flexibility in planning for or reacting to economic downturns, adverse industry conditions and adverse developments in our business, and our ability to withstand such events.

     April 1st, 2008 at 8:14 pm by Jerry

101. I just have one very simple question. How does Mike Z. justify his 10 million (base around 2 and deferred comp in stock around 8 a year)salary while Nortel employees aren’t getting raises, the company is laying people off, and the company loses money every quarter?

     April 5th, 2008 at 3:56 pm by t.shulman

102. To #01 ABOVE They take their multi-million dollars and retire in Monte Carlo before they bankrupt the company or do a Bear Sterns and sell the company for $2.00 a share.

     April 8th, 2008 at 12:42 pm by Jerry

103. In a current SEC filing, it was disclosed that Wellington Management owns 541,000 shares of Nortel. However, Wellington Management owned, at the end of 2007, 27,863,323. Getting the word out about Nortel? Someone forgot to tell Wellington Management, or maybe Wellington did not believe the transformation process.

     Nortel’s stock price is down nearly 52% thus far in 2008!

     WHERE IS MIKE ZAFIROVSKI?

     April 10th, 2008 at 3:42 pm by LAWRENCE POLLOCK

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