Nortel Networks to spend US$540 million on Sonoma Systems

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Nortel Networks has announced an intention to buy Sonoma Systems – a vendor of high-speed integrated video, data and voice communications – for up to US$540 million in Nortel Networks common shares.

This will allow Nortel to tie the bandwidth of the optical internet to the access solutions of the local internet. The Yankee Group estimates that the market for delivering these carrier-managed services will reach more than US$18 billion by 2002, up from US$10 billion this year.

Sonoma integrated access devices allow service providers to extend new services, including high-speed Local Internet access, video services and Internet Telephony, to business customers.

Said Steve Schilling, president of Access Networks, Nortel, “This acquisition represents another building block in our Local Internet capabilities that will enable service providers to offer new, profitable services directly to businesses and consumers.”

“Nortel Networks is leading the charge in delivering the high-performance Internet,” said Gregory Koss, Sonoma president. “Sonoma Systems integrated access solutions will extend Nortel Networks leadership in the Local Internet, giving service providers the infrastructure to deliver high-performance Internet and converged services to business customers of all sizes, while allowing Sonoma Systems to leverage Nortel Networks market presence, resources and sales channel around the globe.”

Sonoma Systems customers include SAVVIS Communications, Electric Lightwave, Telecom Soluciones, SoftAware, FiberNet, Madison River and Stream.

Sonoma Systems is headquartered in Marina del Rey, California, with a technology center in Marlborough, Massachusetts, and sales and support offices located throughout North America and in the UK.

Nortel Networks had 1999 US GAAP revenues of US$21.3 billion and serves carrier, service provider and enterprise customers globally.

Nortel Networks

Sonoma Systems

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