Nortel Networks was first incorporated in 1895 under the name
"
Northern Electric and Manufacturing Company." It made
telephones, wind-up
gramophones, and street
call boxes for
police and fire departments.
In 1914, it merged
with The Imperial Wire and Cable Company to form "The Northern
Electric Company."
In 1976, the company changed its name to Northern Telecom. By
this point, Northern Telecom had decided to risk its future on the
potential of digital telephony. Northern Telecom focussed on
creating fully digital telephone switches--telephone switches which
would convert the analog voice signal coming from a subscriber's
telephone into digital data before routing the call. While
other telephone equipment manufacturers were loathe to abandon
tried-and-true analog telephony, digital telephony turned out to mean
big savings for the telcos that were Northern Telecom's customers.
Northern Telecom's early advocacy of digital technology enabled it to
get the jump on many of its larger competitors.
Since the company was informally known as "Nortel" both internally
and externally, in 1995 Northern Telecom changed its name officially
to "Nortel" in an effort to strengthen its corporate identity.
In 1998, Nortel sought to reposition itself as a supplier of
networking equipment for the blossoming Internet. Nortel acquired
Bay Networks and changed its name to "Nortel Networks."
The dot-com crash late in the year 2000 meant
disaster for Nortel Networks. The company laid off 44,000 employees
worldwide between 2000 and 2002--almost half its workforce. Nortel Networks stock on the New York Stock Exchange
plummeted from a high of $86 USD on July 26, 2000 to $2.47 USD on May
15, 2002. On April 4, 2002, Nortel Networks' credit rating was downgraded to junk bond status by Moody's Investors Service.