Nortel Networks Inc has terminated its commercial relationship with Avici Systems Inc, the company announced on Friday. Nortel will retain its 20% equity stake in privately-held Avici, it said, but will forfeit its seat on the company’s board. Separately, Nortel sold its 3.7% share in Juniper Networks Inc, the high speed router manufacturer that held its initial public offering Friday.
Avici is in the process of developing a terabit IP router/switch. It garnered $15.75m of first round funding in 1996, followed the following year by another $55.3m. Nortel took its 20% stake in the company in June 1998. Avici indicated that it wanted to retain its independence and had a different technology direction in mind from Nortel.
Last year, Nortel acquired Bay Networks Inc, with competing product lines. It had planned to group optical fiber transmission systems with datacoms products from Avici, Bay, and Aptis Communications Inc within its Carrier Packet Networks division.
Also on Friday, Lucent Technologies Inc agreed to pay around $900m for another Avici competitor, Nexabit Networks Inc.
