Mitel Corporation: Voice Over IP Just Got Better
By Matt Paolucci

Real-time voice over-the-Internet is one challenge that still prevents us from the perfect Internet experience. Signal delays and poor sound quality are enough to drive a person crazy. But Mitel Corporation (MLT) is hoping to bring voice- over-the-Internet one-step closer to perfection.

Ontario-based Mitel is a global provider of converging voice and data systems and applications, and specialty semiconductors for the communications industry. Mitel operates through two principal business segments: Mitel Communications Systems and Mitel Semiconductor. Mitel Communications Systems' products are primarily customer premises-based communications systems that are used in networks that enable businesses to communicate within and between locations to support the needs of branch offices, mobile workers and tele- workers.

Mitel Semiconductor manufactures and markets semiconductor products for the communications, telephony, ASICs, home gateway, wireless access, WAN Internetworking, optical and medical arenas. The Company also provides foundry services to third parties on a contract basis.

Mitel has recently made a push to increase its Internet product offerings; particularly the PBX or private branch exchange market. Mitel currently has an 8 percent share in the PBX market, dominated by Lucent Technologies, with a 33.7 percent share. A PBX device enables people using an ordinary telephone, attached to an existing business phone system, to place and receive calls over the Internet. This is where MLT is focusing its efforts.

Today, the Company unveiled its Ipera 2000, the industry's first IP (Internet protocol) solution offering 99.999 percent reliable call control. The Ipera 2000 is the first Voice-over- IP (VoIP) product to make voice and data network convergence a viable alternative for enterprise communications. The technology means that phone sets will be able to carry e-mail headlines or stock quotes, for example, while voice commands could be used to open a corporate database on a computer.

``You can use your phone in harmony with your desktop computer so you can start navigating Web sites, as an example, by using your voice instead of using the mouse,'' Paul Butcher, Mitel senior vice-president, said. Combining voice and data systems over a network using Internet Protocol means corporations can simplify their network connections and cut costs.

Mitel said Ipera 2000 will be available for sale by month's end, and is aimed at companies with up to 200 staff or groups within large corporations. Trials began about two weeks ago. Further products are slated for launch this fall. ``The magnitude of what Mitel is announcing is far in advance of what our competition (is offering),'' stated Butcher.

Wall Street seems to have taken a liking to Mitel's Internet push. On top of its Internet efforts, the Company has also divested itself of some non-core businesses, proving to Wall Street that it is serious about becoming a leader in IP technology. Out of eight analysts currently covering shares of MLT, six have either a Strong Buy rating or Moderate Buy rating. In the last two months, the number of Strong Buy ratings has jumped from two to five.

Earnings estimates for the March quarter have risen from 17 cents to 22 cents, and full year 2000 estimates have gone from 52 cents to 65 cents per share. Fiscal 2001 estimates have also risen from 62 cents to 79 cents per share.

Shares of MLT currently trade for $25, down from a recent 52- week high of $34.25.