Nortel management shakeup

Telecom equipment marker Nortel Networks has stepped up its search for a new chief executive officer as the company's CEO, John Roth, announced he will retire next year and its chief operating officer, already on medical leave, has resigned.

Nortel said its COO, Clarence Chandran, is leaving for medical reasons. Chandran has been on medical leave since March due to complications that arose from an incident in a June 1997 stabbing attack in Singapore.

"Since Clarence is no longer available in our succession planning, I'll be working with our board of directors to undertake a search for my successor," Roth said. "Our priority is to have my successor in place well before I retire to ensure a smooth and orderly transition."

Roth, who will take over Chandran's duties, said he will retire in April 2002. Roth was appointed chief executive in 1997 and has been credited with leading Nortel's push into fibre-optic, wireless and data technologies.

Nortel's management shakeup comes at a time when the company is exiting the high-speed digital subscriber line (DSL) business. Nortel said that as part of its focus on high-growth business lines, it would close its DSL unit and other copper-based voice and broadband local access products, as they do not "meet our business criteria for high-growth markets".

Nortel had acquired the DSL technology through its purchase last year of Promatory Communications. Current customers will continue to get support under warranty, the company said, but they will not be able to buy any more DSL products from Nortel. The company ranked fifth in the market behind leader Alcatel.

Nortel, whose stock is down 70 per cent in the past year, said its first quarter loss widened and sales fell as demand waned for fibre-optic and older phone equipment.