The new head of Nortel Networks says customers and resellers haven’t expressed any hesitation about buying company’s products despite its shaky finances.
“”I hear rumours,”” CEO William Owens told industry reporters Wednesday,
“”but I have not heard from a single one who has talked to me about that, and I talk to a lot (of them). And so I’m a little surprised that I haven’t heard more.””
Owens, appointed to step down from the board of directors to run the company in April because financial results for the last four years will have to be restated, was in Toronto to address a telecom summit.
But he also took time to meet with business and technology reporters to repeat a message of assurance he’s been issuing for months to customers, partners and investors: Nortel is still in business, still investing in research and development, that the problems are with bookkeeping not products, and that it will get over what he admits is a trying time.
Industry and financial analysts have hammered the company for its continued bookkeeping instability.
This time of critical scrutiny won’t end soon. Owens refused to say when the corrected financials will be issued, except to say some 650 people inside the company are working on the numbers, along with the help of an outside accounting firm.
This week the company issued another in its biweekly updates mandated by the Ontario Securities Commission, but it amounted to saying it’s still crunching figures.
However, as he acknowledged yesterday “”it’s terribly important we get those audited financials behind us.””
To some degree it already has, noted Brian Sharwood, a telecom analyst with the SeaBoard Group. Nortel has scored big deals with Bell Canada here and Verizon in the U.S., and, since April, other telcos around the world.
“”The people who actually purchase this stuff, especially in other countries, don’t look at the stock prices,”” he said.
Still, Sharwood noted office phone manufacturers such as Avaya and Mitel and eagerly pushing into Nortel’s markets, and even Owens admitted that Asian telecom manufacturers are mounting serious challenges.
Dressed in a charcoal grey suit, a blue shirt and a red tie with blue horses, Owens talked in soothing tones about how seriously the troubled company is taking on the burden.
“”We have devoted a lot of time and effort to being truthful with our customers about where we are and what we’ve done. We knew as a board what we were doing when we made the decisions we made. It because it was the right thing to do and we will now get on with looking after the future of Nortel.
“”We know we will be tested, and I’m prepared to be tested.””
He spoke generally of new areas the company is concentrating on, including DSL, carrier grade voice-and-video-over-IP, the U.S. government and wireless. And he dipped vaguely into the future.
“”There are new worlds out there, for example packet switched networks and automobiles. We have some people who think about this.””
But in the shorter term the strategy is to maintain customer loyalty by trying to deliver to them the best quality solutions, he said.
“”Our customers seem to have a lot of admiration for Nortel, because of decades of having provided them innovative products, and sticking with them. We’ve had some products that haven’t worked particularly well, and Nortel has a reputation of handing in there with them even when Nortel is losing money on that particular product.
“”This will pass,”” he said of the current storm,”” he added. “”We know this is a journey to credibility. The company is built on a history of integrity and trust, the actions that were taken came from inside Nortel management and board, and we’re committed to doing the right things going forward, and we will.””
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