Nortel Networks to Buy Promatory for $778 Million

Moving in for a foothold in next generation DSL deployment, Nortel
Networks Thursday said it will spend to $778 million on the acquisition of a DSL platform developer.

The company has acquired U.S.-based Promatory
Communications in an all-stock deal.

Promatory’s DSL solutions enable ordinary copper telephone wires to carry
Internet traffic at speeds of up to eight megabits per second, 150 times
faster than today’s conventional analog modems.

Nortel also expects the buy to strengthen its voice-over-DSL (VoDSL) service, allowing the company to sell various voice and Net solutions simultaneously.

The company boasts custom-designed services for business and consumer users which increase the
revenue generation potential of DSL for service providers while reducing
costs.

“The addition of Promatory’s next generation DSL platform to Nortel Networks
leading first-mile access solutions, combined with the Optical Internet,
Internet telephony, and Nortel Networks services and applications will allow
us to make high-speed Internet access a reality for homes and businesses
everywhere,” said Clarence Chandran,
executive vice president and president, Nortel Networks Service Provider and
Carrier Group.

Promatory also Thursday started shipment of its multiservice broadband access platform, targeting business DSL services with the capacity to integrate with an optical Internet backbone.

Analysts forecast that the entire DSL market is set to take off, with
projections of seven million DSL lines in service by 2002 compared with
fewer than one million today. By 2003, the market is expected to rise to
US$4 billion, almost 40 times last year’s estimated total of US$103 million.