Amid speculation of insider trading, Nortel Networks Corp. last month explained the resignation of CFO Terry Hungle after the executive’s stock trades came into question. The Brampton, Ont.-based telecom gear maker said Hungle transferred an investment of approximately US$78,000 from a Nortel-heavy stock fund to a fixed income fund in March 2001. Later that month Nortel said it would not meet its earnings expectations. In December, Hungle transferred US$86,300 from the fixed income fund back to the stock fund. Later that month, Nortel said it would not lose as much money as expected. In last month’s press release, Nortel said Hungle made the transactions “outside the trading windows imposed by the corporation.” Interim CEO Frank Dunn is quoted as saying that the matter “does not relate to the business, operations or financials of Nortel Networks.” The company notes that it volunteered the information concerning Hungle’s investments to the U.S. Securities and Exchange Commission and the Ontario Securities Commission. The hunt for a permanent replacement is afoot.
Goodbye to GSM gear
In other Nortel news, the company is $150 million richer after selling Global System for Mobile Communications (GSM) radio base stations and switching equipment to Microcell Connexions, a subsidiary of Microcell Telecommunications Inc. in Montreal. The buyer plans to use the gear for Enhanced Data rate for GSM Evolution (EDGE) and Adaptive Multi-Rate (AMR) services, which amount to “always on” wireless access for e-mail and other applications in Toronto and Montreal. The agreement spans three years and expands Microcell’s relationship with Nortel, the latter having built wireless infrastructure for the carrier in other parts of the country. Nortel is no newcomer in the wireless space. The company has built General Packet Radio Services on GSM (GPRS/GSM) networks in 40 countries, as well as Microcell’s “pre-paid” cell phone service. The companies have worked together since 1996.
Zink is good for Enterasys
Enterasys Networks Inc. has a new vice-president of its Canadian operations in Paul Zink. The network equipment manufacturer announced Zink’s appointment last month, saying his 21 years of experience in technology made him the right person for the job. Zink was last with Cisco Systems Inc. for nine years, most recently as senior regional manager in charge of sales, marketing and business development. He has held senior sales positions at General Datacomm and NCR Corp. Enterasys touts Zink as a “skilled strategist.” Zink, meanwhile, says it’s “satisfying” to join a company committed to Canadian customers.
Smaller group at GT
Group Telecom Inc., a telecommunications provider headquartered in Toronto, last month let go 350 employees from all levels in its drive towards profitability. The company said the staff cuts would reduce expenses by $30 million per year, adding that the move will cost $20 million in its second quarter, 2002. GT plans to be in the black on earnings before interest, taxes, depreciation and amortization (EBITDA) by Q4, but given the poor performance of the stock market it won’t happen without cost cuts, the company said. GT added that it will focus on selling high-speed data, Internet, application and voice services now that its network is up and running across Canada. In a press release, the company’s president said the reduction “is certainly not an action we take lightly,” but “we have a responsibility to our shareholders, customers and employees to ensure the company’s financial well-being.”
Q9 snags Exodus data centre
Q9 Networks Inc., a data hosting company in Toronto, has purchased a data centre in Brampton, Ont. from Exodus Communications Inc. Early last month Cable & Wireless plc purchased Exodus, and Exodus, in turn, sold its data centre to Q9. In a February press release, Q9 said the facility would help boost its profile in the Greater Toronto Area beyond the city’s core, adding that this was the plan all along as customers increased. Like Q9’s other data centres, the new facility offers redundant feeds, fire protection and heavy duty security with video cameras and biometric authentication. The building is attached to multiple Internet infrastructures and offers Q9’s disaster recovery service. The company said the building is the largest data centre in Canada at 160,000 square feet.
