Nortel extends multi-billion dollar contract with WorldCom.
Nortel Networks is extending its purchase agreement with WorldCom for an extra year and a half, bringing additional billions in possible sales.
The contract will let Nortel continue to sell a variety of networking products to WorldCom. Nortel did not give the precise value of the 19-month extension, but estimated it would be worth multiple billions US to the company.
WorldCom, a U.S.-based telecommunications company, is building a global network. It has about 77,000 employees in more than 65 countries.
Nortel's stock was down $1.90 to close at $113.35 in Toronto.
The deal is another indication of Nortel's strong presence in the fibre optic networking market. Nortel shareholders are looking for the company to strengthen ties with existing customers, as well as to sign new customers.
"Nortel Networks plays a critical role in enabling us to rapidly and cost-effectively provide our customers with the highest quality advanced products and services possible," said Fred Briggs, WorldCom's chief technology officer.
Nortel made a similar announcement on Tuesday with its customer Williams Communications. Williams is building a fibre optic network in the United States and Nortel said the contract extension was worth $1.5 billion US.