News | December 22, 2000

3Com creates CommWorks subsidiary

Source: 3COM
Santa Clara, CA-based 3COM Corp. has created the CommWorks Corp., a wholly owned subsidiary serving the service provider market. CommWorks, which will contain 3Com's Carrier Network Business, builds IP networks for network service providers around the world. These networks allow service providers to deliver enhanced data and voice services to their end users through dial, wireless, cable and digital subscriber line (DSL) access. Irfan Ali has been named president of the new company. Ali served previously as senior vice president and general manager of 3Com Carrier Networks Business.

"CommWorks will have the freedom and resources necessary for success in the carrier marketplace while leveraging the financial and technical strengths of 3Com Corp.," said Bruce Claflin, 3Com's president and chief operating officer.

3Com's remaining Commercial/Consumer Business will continue providing networking solutions for the commercial and consumer markets. The Commercial/Consumer Business and CommWorks will be realigning their respective operating structures to enhance the focus and cost effectiveness in serving their markets. 3Com will take a one-time charge estimated to be between US$40 million and US$60 million in its fiscal third quarter ending March 2, 2001 in conjunction with this restructuring. When completed, 3Com is targeting savings of between US$200 million to US$250 million per year. These actions, coupled with modest growth in revenue, are expected to result in operating profitability in the first fiscal quarter of FY02.

"3Com intends to have two growth businesses, each of which generates superior financial returns," Claflin said. "We are committed to obtaining the benefits of focus, while investing in leadership products and services which drive profitable growth. All these actions are intended to create increased shareholder value."

Strategy
The new subsidiary supplies the access infrastructures and IP services platforms that open new business opportunities for service providers and helps them establish positions in an increasingly competitive marketplace. With flexible multi-service hardware platforms and modular software components, the company will make it possible for service providers to integrate existing infrastructures with innovative technologies to deliver an array of next-generation IP-based enhanced services.

"CommWorks networking solutions are already deployed by many of the world's leading carriers and service providers," said Irfan Ali, president, CommWorks Corporation. "We will build on these successes to deliver new and advanced networking solutions to enable carriers to reduce time to market, differentiate their services from competitive offerings and cost effectively migrate to next-generation networks."

Edited by Ellen Jensen
Managing Editor, Wireless Networks Online