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July 22, 1994

FIBRE-TO-THE-KERB: RAYCHEM PUTS RAYNET INTO VENTURE WITH ERICSSON

By CBR Staff Writer

In May, Raychem Corp called in Morgan Stanley & Co to advise it on whether to sell its Raynet Corp fibre-to-the-kerb technology pioneer or put it into a joint venture, and the rest became history yesterday when L M Ericsson Telefon AB announced that it had journeyed to Menlo Park, California to agree a joint venture with Raychem – and the joint venture, which will design, manufacture and market fibre optic access network systems worldwide, will take over and continue the operations of the Raynet subsidiary. Raynet should have a big future as a pioneer of introducing an economical fibre-based system to deliver speech, data and video to subscribers – its fibre-to-the-kerb system enables the existing copper wire into the house to be used, rather than requiring fibre right into the home. The joint venture plan to supply a broad portfolio of cost-effective fibre optic speech, video and data distribution systems for narrow, wide and broadband applications, including network management and operations support systems. The joint venture will be owned 51% by Ericsson and 49% by Raychem, but terms of the transaction were not given. Raychem, also based in Menlo Park, where the joint venture will live, employs 11,000 people in over 40 countries and reported sales of $1,500m in fiscal 1994. It specialises in materials science and does product design and process engineering to develop, manufacture and market high-performance products for electronics, industrial and telecommunications applications.

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