Mike Zafirovski, president of Nortel Networks Corp., says “the stars are aligning” for the technology giant and he's counting on the growth of Internet video to provide opportunities for his firm.
“I do believe as 2006 winds down, this will show a nice improvement over 2005,” Zafirovski said Monday during a speech to the Canadian Club in Montreal.
Nortel took a huge hit in its 2005 fiscal year order to settle two related U.S. shareholder suits in a deal initially valued at about $2.5-billion (U.S.) when it was announced last February.
It lost a whopping $2.6-billion last year, compared to $207-million in 2004.
Zafirovski admitted Nortel was “in the form of a perfect storm during the last four or five years, and we do see a place where the stars are aligning for Nortel to come back very strong”.
The Nortel CEO said he was counting on a number of the technological trends like “hyperconnectivity” to help play to the strengths of the company.
“Virtually everything that can be connected will be connected, going forward,” Zafirovski said.
“Whether it's your cellphone, whether it's your BlackBerry, whether it's your car, your shipments, movies, video ... everything is becoming digitized.”
Video on the Internet will “dramatically change” the opportunities for Nortel, Zafirovski said.
Philippe Morin, president of Nortel Metro Ethernet, agreed video applications are creating more need for bandwidth.
“And that's the good news for companies like Nortel, because now we got the opportunity to provide more equipment,” Morin, who attended the speech, said in an interview.
He pointed to Internet video-sharing pioneer YouTube Inc., which Google Inc. plans to buy for $1.65-billion, as an example of a business opportunity.
“What you're seeing in the market with YouTube.com where 100 million users are going in and downloading video streaming and spending 45 minutes on average per day to watch video streams, will have an impact in terms of demand of equipment into the network,” said Morin.
The executive also said Internet service providers will have to stay ahead of the growth in bandwidth.
“I think most networks today have a good solid base foundation and now as it starts evolving, networks will have to evolve,” Morin added.
