Looking for Clarity in Nortel's Government Strategy
EETimes has a story about Nortel's U.S. government strategy based on an interview with Chuck Saffell, an ex-U.S. Air Force Rear Admiral. Saffell talks about a $65-billion market growing at 4% a year, focused on the U.S. government's need for increased security technology. Meanwhile, Nortel CEO Bill Owens talks about Nortel going after $10-billion of U.S. government business growing at 20% a year. Owens contends Nortel's $448-million acquisition of PEC Solutions Inc., a mid-tier systems integrator, will allow it go after $1-billion contracts but there have been few details on specific deals that PEC has pursued or won in the past.
Clearly, there are many strategic questions that have gone unanswered. If I were a Nortel investor, I'd be looking for more insight into the competitive landscape. What other telecom equipment suppliers are active in the U.S. government market? What kind of strategic arrangements do they have - joint ventures, system integration arms, etc. Maybe with Nortel's financial books back in shape, Nortel will start to articulate its new strategic direction. From what I've heard since the first-quarter results were issued last week, there's been a lot of talk from Nortel senior executives about being “bullish”, “enthusiastic” and excited about opportunities in India but few specifics. For a company that was in strategic limbo for nearly two years, the market needs to hear more.
