Nortel's revenue in the first quarter rose slightly from a year earlier, but the telecommunications and networking equipment vendor lost money, according to a regulatory filing it made on Tuesday.

In the quarter ended March 31, the Brampton, Ontario, company had revenue of $2.54 billion, compared with $2.44 billion in the first quarter of 2004. Revenue was flat or down in most product segments but grew in its GSM and Universal Mobile Telecommunications Service (UMTS) business. Nortel attributed most of this gain to a deal signed last year with Bharat Sanchar Nigram to build a wireless network in India.

Nortel had a net loss of $49 million in the quarter after net income of $59 million a year earlier. Its per-share loss was .01 cent, compared with earnings of .01 cent per share in last year's first quarter.

Nortel is still on the rebound from the telecommunication industry's downturn as well as an accounting scandal that caused a management shakeup and forced the company to restate several quarters of financial results. In the year ahead, it sees continued consolidation of carriers, especially in the U.S., and expects that trend to reduce spending by its carrier customers as they seek efficiencies, according to comments in the Form 10-Q that Nortel filed with the U.S. Securities and Exchange Commission. However, the company also said it sees potentially significant growth in China and India this year.

The Tuesday filing "represents a return to current financial reporting," Chief Executive Officer Bill Owens said in a conference call with analysts on Wednesday.

Looking ahead, "We will be a timely filer for 2005," he said. Since April 2004, Nortel has been restating its accounts for earlier years, and this delayed its filings throughout last year.

Chief Financial Officer Peter Currie expects that in 2005 the company will grow between 4% and 6% compared to last year, in line with the market.

The company aims to grow fastest in Asia, Owens said, adding that although competition from Chinese vendors there is very strong, Nortel will be helped by its reputation for quality and reliability.

Nevertheless, to remain competitive in such markets, "We must lower our cost structure," he said.

While Nortel will continue to invest "considerable sums" in R&D, Owens expects to keep R&D spending controlled by partnering with other companies when appropriate, and perhaps consolidating its R&D facilities. The company has 30 R&D sites, far more than comparable companies, as a result of previous acquisitions, he said.

The IDG News Service is a Network World affiliate.