Cabletron and 3Com 'in trouble': Cisco

Cabletron and 3Com 'in trouble': Cisco

Cabletron and 3Com will be lucky to survive another 12 months as standalone companies, Cisco Systems Australia/New Zealand managing director Terry Walsh has claimed.

Speaking at a Cisco media briefing, Walsh said networking companies that have not yet been acquired may be "in serious trouble" in the future or "will just go away quietly".

"I do believe Cabletron and 3Com will be struggling to survive unless they are acquired. There's a reasonable chance they will be acquired or in trouble," he said, but was unable to predict how quickly the companies would disappear or be swallowed.

Walsh said Cisco's main competitors will be Lucent and Nortel who are "not going away" but face transitional hurdles as they continue to merge with acquired companies and transform from circuit-switched based vendors to the IP-centric world.

Ian Fewtrell, Cabletron's Australian managing director, dismissed Walsh's comments as "childish rhetoric" saying Cabletron is performing strongly, especially in the ISP space and will be investing heavily in Australia.

"We may not be a $400 billion company, but we're certainly a $7 billion company and we have more cash in the bank than all the network integrators in Australia - it's not like we're going to go bust," Fewtrell said.

"Every company on the stock market is a potential for acquisition - it just depends on what price. When dealing with a multibillion-dollar company, it doesn't matter if they are going to be acquired or not because it's the solutions that matter," he said.

In other news, Cisco announced yesterday second quarter results for the period ending on January 29. The company reported a sales increase of 53 per cent for fiscal Q2 2000 from $US2.85 billion in last year to $4.35 billion. Walsh said this is the 37th consecutive quarter Cisco has beaten analyst forecasts.

3Com managing director Archie Wilson could not be contacted before press time.

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