Nortel Networks Acquires Optical Switching Firm

In a move to bolster its optical Net strategy, Nortel Networks Tuesday bought
photonic switching firm Xros for $3.25 billion.

Based upon a determined price of Nortel Networks (NT)
common shares of approximately $118.12, the acquisition will result in
Nortel Networks issuing an expected 27.5 million shares on a fully diluted

Nortel plans to absorb Xros’ micro-mirror technology, which allows data
to be switched through optical networks in the form of light. Xros provides
the capability to scale network hubs with hundreds of times greater capacity. The solution will also act in conjunction with
Nortel’s Qtera ULTRA solution to deliver Nortel’s all-optical network, which the company claims will be the world’s first.

Xros’ technology is designed to operate at today’s industry standard, 10
Gigabits per second (Gbps), as well as the future optical Internet speeds of
40 Gbps and 80 Gbps, capabilities that Nortel has announced for introduction
to the marketplace next year.

“An all-optical Internet will deliver millions of instant Internet sessions,
thousands of video channels, and vast amounts of
e-business transactions on an unprecedented scale,” said Clarence Chandran,
president, service provider and carrier group, Nortel Networks.

Nortel Networks is a world leader in optical Internet, with more than 75
percent of North American Internet backbone traffic traveling across
Nortel’s systems.

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