Nortel’s DSL joint venture with Huawei should target small to mid-sized firms

Whether that confidence is well-founded remains to be seen, and Nortel could very well have one division competing with another if it’s successful in marketing WiMAX products to carriers.

The first WiMAX products (using the IEEE 802.16 standards) were certified in late December, and Nortel is keen to enter this market, which will initially be dominated by carriers offering the 40 Mbps-plus bandwidth as an alternative to wireline-based high-speed access technologies.

Last month, Shenzhen, China-based Huawei agreed to let Nortel sell its broadband products, and the two manufacturers decided to set up a joint venture in that market.

It’s an opportunity for Nortel to sell products to Canadian customers without requiring a heavy R&D investment, but any growth relies on a perception that DSL is the best high-speed option not only for data, but for voice and video.

Selling high-speed to small shops
The most obvious market is consumer, but to really take off, the carriers need to convince small to mid-sized companies that DSL is their best option if they don’t want to pay for fibre to the premises. Nortel and Huawei are unlikely to gain much benefit from consumers who want a save a few dollars a month using VoIP, or who, for whatever reason, decide they would rather watch TV over a DSL connection than over a traditional coax cable, which has worked well for decades. Instead, the partnership will depend on small firms that have been reluctant to purchase high-speed service in the past – either because Web access wasn’t critical for their business or because they were concerned employees would be wasting time shopping on eBay or gawking at porn. As for video, Nortel needs to make the case this is a must-have, not just a cool thing.

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