Nortel, Bay set up unified shop

Company execs call their merger, a telecom and data equipment combination, a marriage that sets them apart from competitors.

Executives from Northern Telecom and Bay Networks basked in the afterglow of the completion of their merger today, calling the telecommunications and data equipment combination a marriage that sets them apart from competitors.

The new almost $18 billion networking powerhouse set up shop yesterday under a unified Nortel brand name. The merger, announced after countless rumors this past June, is one of the most obvious examples of change underway in the networking industry.

Under the new Nortel umbrella, the combined entity will now be able to offer a wide array of telecommunications equipment and data devices to corporations and service providers, executives said.

Increasingly data and telecommunications-focused equipment providers have been reacting to a trend among service providers to combine voice and data-based communications across a common network infrastructure, a movement that has far-reaching implications for networking companies and the devices they manufacture.

Others gunning for the same opportunity include Cisco Systems, Ascend Communications, and Lucent Technologies, among a slew of voice and data-based aspirants.

Plans call for Bay to be combined with Nortel's own enterprise data networks line of business. The name Bay Networks will remain in place and the line of business will be headquartered where Bay currently resides in Santa Clara, California. David House, former CEO of Bay and now president of the combined entity, will remain in charge of this division.

Bay technology will also be rolled into a new carrier packet networks line of business, covering service provider and carrier customers with next-generation networks. The unit also features technology from Nortel's recent Aptis Communications acquisition and its equity investment in Avici Systems. It will be headquartered in Billerica, Massachusetts.

Under the realignment, a carrier networks business unit has also been formed, headed by Ian Craig, formerly president of Nortel's broadband networks. Nortel's wireless and voice business unit structure has not been changed.

Nortel CEO John Roth said the combined firm received their first order today for $6 million worth of equipment.