Nortel stocks surge on news of Verizon deal

Shares in Canadian equipment vendor Nortel Networks yesterday made their biggest gain since October 2002 after the company revealed it was on the verge of signing a five-year deal to upgrade the network of US wireline carrier Verizon Communications with new packet switching infrastructure. Shares in the Ontario-based company rose by 19% to USD5.67 in New York Stock Exchange composite trading, still a far cry from the USD89 stock price the company boasted at the height of the telecoms boom in mid-2000. Nevertheless, the deal is the latest sign that the network equipment market is emerging from the doldrums of the last three years, during which time Nortel and its competitors have reported losses running to billions of dollars.

Nortel is expected to announce a profit for 2003, having recently secured a number of major network expansion deals with carriers in the US, the Cayman Islands, Pakistan and Israel. The Verizon contract is the largest US order Nortel has received to date for Voice over Internet Protocol (VoIP) equipment, although the company has yet to disclose the value of the deal.