Nortel's margins are significantly lower than competitors Lucent and Ericsson (nasdaq: ERICY - news - people ), and the company needs to cut costs, he says.

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It acquired a research lab in India from Swedish telecom titan Ericsson (nasdaq: ERICY - news - people ) and a telecom-chip design firm in Austria.

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Nearly half that sum is being spent to transform a million-square-foot former Ericsson (nasdaq: ERICY - news - people ) plant bordering the campus into a new law school and a larger site for the church.

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