Soaring demand for games, video and music will stretch the Internet to its limits, Canada’s Nortel Networks Corp. says, and it expects service providers will make big investments in its technology to avoid a crunch.
But the telecom equipment giant, still struggling to turn its fortunes round after the tech bubble burst, is treading carefully as it prepares for what it sees as a looming buildout of capacity by telecommunications companies.
Massive overbuild of Internet bandwidth capacity helped lead to the meltdown six years ago, and the company says it doesn’t want things to go wrong again.
“It’s driven by caution, because none of us want to repeat the mistakes of 1999 to 2001,” Nortel’s chief technology officer, John Roese, told Reuters in a recent interview.
The mistakes he refers to saw billions of dollars in Nortel losses, as well as tens of thousands of job cuts and a precipitous plunge in its stock price. Nortel stock peaked at more than C$120 a share in 2000. They are worth about C$2.50 a share today.
