Nortel acquires DSL vendor Promatory

Nortel Networks’ recent acquisition of Promatory Communications Inc. is a move that will provide Nortel with much needed market share in DSL platforms for high-speed Internet access, according to one analyst.

“Nortel really needs something to flesh out its offerings in the DSL area. Last year, Lucent did this and acquired Ascend (Communications) and picked up all the Ascend products along with the new Stinger products, that they launched not too long after the acquisition. Nortel has not had a real strong market share in the DSL space for central office equipment. This will give them something that will possibly help their market share opportunity,” Kathy Hackler, principal analyst with Dataquest Inc. in San Jose, Calif., said.

Promatory’s platform is a next generation platform that will accept any kind of DSL, ADSL, and up to VDSL, Hackler said.

She added that the Promatory acquisition gives Nortel instant market presence.

“I think it’s better than them trying to design and manufacture something within Nortel. It certainly has a range of capabilities that Nortel doesn’t have today on one platform,” Hackler said.

Hackler said the DSL market is just beginning to take off. Dataquest has forecasted 17 million DSL modems will be shipped worldwide by 2003. By comparison, Dataquest has forecasted 10 million cable modems will be shipped in 2003.

Scott Bell, director of strategic product marketing for the access group of Nortel Networks said the acquisition of Promatory is a key one, because the industry is trying to increase the Internet bandwidth of DSL to accommodate multiple network services.

Promatory’s chief product is a DSL Mux (a DSL aggregation muxer or multiplexer).

“What Promatory allows us to do is deliver the next generation solution by delivering multiple network services,” Bell said.

Promatory’s platform, unlike that of its competitors, is an ATM switch combined with DSlam, Bell said. He added the switch has Internet quality of service built in to allow different services to ride across the same DSL.

“Now we can take things like voice over DSL. In addition to that Internet bandwidth running across the same pipe we can also have things like streaming video. If you want a Webcast or direct link to a corporate site at the same time as you’re talking…and at the same time as you’ve got a web site up, we can have that same quality of service metric-wide — right across that link,” Bell explained.

“Its really that business quality, Internet data, and voice over data service as we start looking at next generation DSL and Promatory will really leverage in a lot of attributes with that,” he added.

Bell said the plan is to sell network solutions to CLECs.

According to Bell, Promatory acts as an edge ATM switch.

“It’s a great way for CLECs and ILECs to push that switching technology much farther in their networking and get the efficiencies,” Bell said.

Promatory has been shipping its product for the last month.

Nortel will combine Promatory’s box with Shasta gateways. Bell said by combining Shasta and Promatory, Nortel Networks can now provide secure VPNs. Shasta provides firewalls for DSL modems so that every cable or DSL modem can have a firewall for extra security.

“We can actually now start looking at migrating frame relay network services onto a DSL network and we call that business class DSL, but it’s really getting into those value-added services,” Bell said.