Following news that it was not selected as a preferred supplier for British Telecom’s huge 21st Century Network project, U.K. equipment vendor Marconi Corp. said it will lay off workers, refocus its business and continue to examine its strategic alternatives.
“BT’s omission of Marconi from its list of preferred vendors for its 21st Century Network has made a huge impact on the company,” said Julian Hewett, chief analyst at Ovum. Hewett noted the company’s stock has fallen 40 percent since the announcement.
“Substantial job cuts are expected, and the future of Marconi as an independent business seems uncertain,” said Hewett. “The hard fact is that telecoms equipment is a global market. And a global footprint will become even more important in an `all-IP, next-generation’ world in which the basic components are standardized.
“In our view, Marconi now has no future as an independent telecom equipment vendor,” said Hewett, who mentioned L.M. Ericsson, Siemens AG and Alcatel Alsthom as the most obvious potential acquirers, as well as Cisco Systems, Lucent Technologies Inc., Nortel Networks Ltd. and Huawei as more distant possibilities. “Its credibility with other telcos has been shattered by failing to get on BT’s preferred list of vendors.”
In a statement, Marconi reiterated that it has several contracts with leading telecom operators, including other contracts for equipment and services with BT that remain in place. The company said it plans to shortly announce the results of its headcount and operations review. The company’s full-year and fourth-quarter financial results are expected to be released May 17.
“This is a disappointing outcome from a very competitive tender process,” said Mike Parton, chief executive of Marconi, in response to BT’s decision. “Our products performed extremely well technically, but we have been unable to meet BT’s commercial requirements.”
BT, the leading U.K. fixed-line carrier, said it selected eight telecom equipment suppliers for its next-generation 21st Century Network that will see phones that work over both fixed and mobile networks, among other services.
BT plans to spend $19 billion on the network during the next five years.
Japan’s Fujitsu and China’s Huawei will supply the access domain that will link BT’s existing access network with the new network. Huawei and Ciena were chosen to supply the optical electronics in the transmission domain.
Alcatel, Cisco and Siemens are preferred suppliers for metro nodes to provide routing and signaling for the new network.
Lucent is a preferred supplier for core nodes providing high capacity and cost-efficient connections between metro nodes. Lucent will work with Juniper Networks on the network.
Ericsson was selected in the i-node domain, the intelligence that controls the services.
