New York Stock Exchange- and Toronto-listed Nortel sees the South African market as an opportunity to grow its regional business further.
Nortel`s president of Europe, Middle East and Africa, Darryl Edwards, said on the sidelines of a conference in London this week that SA is important to the company in terms of the strength that it has locally in the enterprise arena.
"I see SA as an opportunity for us in terms of market share," Edwards said.
In order to grow the company locally, he said Nortel would be keen to enter into partnerships that would give it access to a broader market. The company recently announced a partnership with Microsoft that aims to unify communications. Edwards said both companies are excited about the partnership, which fits Nortel`s growth ambitions.
Nortel will also put more resources into the region. "We want to accelerate growth in the region," he said.
The company has identified countries such as Russia and regions such as the Middle East as potential growth catalysts and will invest in these areas. The Europe, Middle East and Africa (EMEA) region is Nortel`s growth focus, Edwards said.
The region`s revenue from next-generation technologies and new growth areas already account for half its income. EMEA accounts for 25% of Nortel`s global income. Edwards sees 6% growth for the region this year, and as legacy infrastructure is replaced, he expects this to move to double digits.
Growth for the company is more likely to arise from partnerships that accelerate growth than through organic growth, noted Edwards. Partnerships have already been instrumental in growing the company in countries such as Greece and France.
Despite its push to grow through partnerships, Nortel also seeks to grow organically by investing in research and development. The first half of the year has already seen it free up $100 million to invest in what the company sees as high-growth areas.
"We are investing very heavily in new technology," said Edwards. He was referring specifically to Provider Backbone Transport, which is not at standards stage yet, but has already garnered interest from customers. In addition, the company is focusing on the wireless arena as a growth area in aspects such as OFDM-MIMO, 4G, WiMax and CDMA.
Nortel has been present in SA since Northern Telecom and Bay Networks merged in 1998. Its local customer base includes companies in the mining, retail, mobile telephony, financial, commercial, hospitality, government and educational markets.
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