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Ascend CEO looks ahead

Now that the Cascade merger is complete, the company is ready to tackle bandwidth bottlenecks, its chief said.

    SAN FRANCISCO--Ascend Communications (ASND) may make a variety of powerful equipment that connects users to service providers and corporate networks, but its CEO believes no one is currently building the gear to handle the exponential growth in data traffic across the Net.

    Fear not.

    Though current equipment does not meet the demands of users, Ascend president and CEO Mory Ejabat--speaking at a remote-access industry conference here--said a new generation of gear will wipe out bottlenecks by the year 2000 for remote users connecting to corporate networks and the Net.

    That gear, supporting high-speed 56K modem, ISDN (integrated services digital network), and DSL (digital subscriber line) technology, will pave the way for the stable of remote workers that grows larger by the day, he said.

    To coincide with the conference, market researcher IDC/LINK released a study that shows telecommuters will reach 7.6 million by the end of this year, with more than 60 percent of the group employed by firms with fewer than 100 employees. A recent Gartner Group study predicted there will be 55 million users of remote-access technology worldwide by the year 2000, doubling two years later.

    After the CEO's presentation, Ejabat commented on the state of Ascend in the aftermath of the company's $3.7 billion merger with Cascade Communications and the recent drop in the company's fortunes on Wall Street.

    "Our hope is the problems are behind us at this point," Ejabat said of his company's stock travails.

    Ascend reported revised earnings for its recently completed 1997 fiscal third quarter of 20 cents per share, results that fell below those of the previous year. For a once high-flying company like Ascend, a decrease in earnings--as well as revenue--worries Wall Street, and the company's stock has been battered as a result. After trading at nearly $80 per share at the start of the calendar year, Ascend shares are now trading for around $30.

    But Ejabat said the primary causes of the downturn--sluggish sales in southern Europe and Japan and slow deployment of Ascend technology internationally--have been addressed. And despite increased competition from the likes of Cisco Systems and 3Com in the remote-access hardware market, the CEO remains bullish on his company's prospects.

    "The sales cycle has gotten longer but we haven't lost any customers to competitors," he said.