Nortel Networks has gotten Internet religion. Since its 1998 acquisition of 
Bay Networks, the Canadian telecom giant has surged in supplying gear used to 
connect companies and individuals to the Net. Nortel's largest business remains 
traditional phone equipment--but that's also the slowest-growing sector in 
communications today.


NORTEL'S
1998 REVENUES
AND GROWTH            MARKET

TELEPHONE EQUIPMENT   Nortel and archrivals Lucent, Alcatel, Siemens, and
$6.6 billion          Fujitsu dominate this huge but slower-growth market.7.2% 
growth                All are scrambling to add Net products. Nortel's ace:
                      its Succession system, a hybrid of phone and Net gear
                      now being tested by major carriers.

CORPORATE NETWORKING  Bay Networks helped beef up Nortel's share of this $25
$2.4 billion          billion market, from almost nothing to about 10%. 
18.1% growth          But Cisco Systems is so dominant that Nortel can only hope
                      to hold its ground.

BROADBAND             Getting onto the Web faster--via cable modems,
$4.5 billion          digital subscriber lines, and fiber optics--is33.9% 
growth                all the rage. Nortel picked up strong products
                      from Bay but faces tough competition from Lucent
                      and others.

WIRELESS              Connecting to the Web via wireless cell phones
$3.7 billion          is the next wave. Nortel's stake in
8.3% growth           wireless is growing. Expect a battle royal
                      with rivals Lucent, Motorola, Ericsson, Nokia, and newcomer
                      Cisco.


DATA: COMPANY REPORTS, BUSINESS WEEK