Nortel curtailing Carrier Ethernet switch/router investment

Nortel this week said is winding down its investment in Carrier Ethernet switch/routers (CESR) in favor of packet optical transport platforms.

Nortel said the decision will let the company focus investment on an area where it is realizing momentum and stability. Nortel filed for Chapter 11 bankruptcy protection from creditors as it attempts to restructure the company operationally and financially, and last week it fired 3,200 more people. 

Affected product lines include the Metro Ethernet Routing Switch 8600, Metro Ethernet Services Unit 1800 and the Metro Ethernet Manager element and domain management system. Nortel says it has dedicated resources to continue to work with customers, and that it will continue to service, support, and ship products to its CESR installed base.

Nortel recently took its Metro Ethernet Networks business unit off the selling block as it undergoes its Chapter 11 restructuring (http://www.networkworld.com/news/2009/020409-nortel.html).

Products not affected by the move include Ethernet access and aggregation systems, and the company’s enterprise Ether Routing Switch 8600 portfolio.

“We are not abandoning our Carrier Ethernet technology innovation, but simply focusing our Carrier Ethernet investment away from the switch/router segment,” a company spokesman stated in an e-mail to Network World. “This decision supports the goal to make Nortel a more focused company.”

The spokesman added that Nortel will continue to offer transport products to meet the bandwidth demands of Ethernet service providers.

CESR was a $4.6 billion market in 2007, growing 30% from the year before, according to Dell’Oro Group. It was a $4.2 billion market by the end of the third quarter in 2008.

Nortel lost revenue and market share in optical transport after three quarters of 2008, according to Dell’Oro. The company’s revenue slid 6% to $802 million and its share to 10% from 8% during that period, according to the firm.

Nortel has been encouraged, however, by recent momentum it is 40G/100G optical business.