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March 14, 1988

STC LOOKS TO ITS NORTHERN TELECOM RELATIONSHIP TO TAKE IT INTO US MARKET

By CBR Staff Writer

STC Plc is looking for its new partnership with 27.8% shareholder, Canadian telecommunications giant Northern Telecom Ltd to take the company into the US market, where Northern Telecom does the lion’s share of its business. Three key areas have been earmarked for STC’s American adventure, and chief executive Arthur Walsh names the three as fibre optic access systems; intelligent networking systems; and Integrated Services Digital Networking. STC has already picked up UKP70m of business from British Telecom’s drive to cable the City with optical fibre and STC – the pioneer of fibre optic cable in the UK at its Standard Telecommunications Laboratories in Harlow, reckons that with the US market lagging behind the UK in this field, big market opportunities should be opening up across the Atlantic soon. STC is also pinning its export hopes on an ISDN chip that will operate with analogue or digital transmission on a variety of transmission media. The chip therefore delivers ISDN capability for converged voice and data without a PTT having to modernise its network first, a big selling point, the company reckons. STC said that negotiations are already under way with some of the regional Bell operating companies in the US but stressed that the key priority of STC at present is to integrate its research and development with that of its new ally to market future products. STC is already confidently proclaiming that the recent deal which puts it in control of Northern Telecom’s UK business, has laid the foundation for establishing STC’s role in the next decade. Northern Telecom’s support would mean enhanced research and development backing and therefore more attractive opportunities in the future claimed Walsh. Meanwhile STC now has UKP196m in cash to spend, but there will be no hasty acquistions that may be repented at leisure: chairman Lord Keith has promised not to let it burn a hole in his pocket.

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