Nortel Networks R&D breaks Cdn$6 billion

Nortel Networks Corp has increased its grip as Canada's dominant corporate R&D spender with explosive new data contained in its year-end results. For FY00 ending December 31, the Mississauga ON-based telecommunications giant racked up Cdn$6.072 billion in R&D expenditures, an impressive 39.3% increase from FY99 when it spent $4.4 billion. That's the largest year-over-year increase for at least seven years and a testament to its determination to strengthen its global leadership position.

Despite Nortel impressive R&D performance, its revenue growth grew even faster, resulting in a decrease in R&D as a percentage of revenue from 14.1% in FY99 to 13.2% last year. Revenue for FY00 was $45.9 billion, up 42% from $32.3 billion in FY99. Whether Nortel will be able to maintain the increases it achieved in FY00 is the focus of intense speculation as the North American economy shows strong signs of a significant slowdown. Its revenue projections for the next year have been modified somewhat to account for the slowing markets.

Network infrastructure accounted for $35.3 billion or 77% of total Nortel sales, with hefty increases in the optical inter-city, local Internet and wireless Internet markets. Photonic components experienced a year-over-year jump of 198% from$1.2 billion to $3.7 billion.

Geographically, more than half of sales were in the US, where it sold $27.5 billion worth of goods, a 42% increase. Sales in Canada were up 16% to $2.5 billion, while the rest of the world increased 47% to $15.9 billion.

Nortel has more than 20,000 employees in Canada, most of whom are engaged in R&D.

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