Nortel has reassured Australian customers that it's business as usual for its local operation, despite filing for bankruptcy protection in North America and entering administration in the United Kingdom.
In Australia from an impact point of view we see no change in the day-to-day operations
Nortel's Anthony Mclachlan
Nortel's Australian customers have included the University of Western Sydney, Sydney's Macquarie University, Perth's Edith Cowan University and the Royal Melbourne Institute of Technology, St George Bank, Queensland Cotton, Kleenmaid, Austock and Wannon Water and law firm Middletons, as well as major local telcos such as Telstra and Optus.
The company's Australian and New Zealand chief, Mark Stevens, was not available to comment, but the company's vice president of Asian carrier sales, Anthony Mclachlan told ZDNet.com.au that local customers wouldn't see a change in the status quo as Australia and Asia Pacific were not included in the Chapter 11 proceedings.
"Customers have been nervous, they're looking for reassurance as to what our plans are. That's a fair thing," he said. "What they're interested in is the ability to support their networks and supply."
"Particularly in Australia from an impact point of view we see no change in the day-to-day operations," Mclachlan added. The company has been talking with customers about the situation.
"While we have a solid cash position in our business, this is to be able to focus on restructuring our legacy financing," he continued, talking about the company's long term debt. "We've picked the time to do it now." Nortel has about US$2.6 billion in cash.
Supply was secure, he reassured, with the company amending an agreement with major supplier Flextronics to make sure the company will continue to supply Nortel.
When asked if he believed the Chapter 11 announcement would have a negative effect on future sales in the region, Mclachlan said he thought customers appreciated the company being transparent. "We are still developing new products; we're still winning new business. Many in the Australian market are still rolling out," he said.
What the planned financial and business restructuring would mean for Nortel jobs was uncertain, with Mclachlan reiterating that there have been no announcements made about employees. The company announced plans to cut 1,300 jobs last November after having a tough quarter.
Nortel's last posted Australian financial results showed the company in a sharp revenue decline for the year ended 31 December 2007. Revenue dropped 20.5 per cent in the period to $198.4 million, mainly due to Telstra's decision to use the UMTS standard (which Nortel does not support) when it built its Next G mobile network; Telstra's CDMA network had been supplied by Nortel.
At that time Nortel had 473 employees in Australia.
Nortel is a basket case. The Defence organisations in Aust and NZ that have made big bets on the success of Nortel and heavily built their core and base networks around a company that has been struggling since the dot com crash of 2001. So Claude, are you starting to feel nervous yet??? All your corrupt decisions are coming back to haunt you.