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Compaq Plans N. Texas Telecom Site

October 11, 1999

GENEVA (AP) _ Compaq Computer Corp. announced the formation of a new telecommunications unit on Monday, unveiling a powerful new data system as part of the struggling company’s bid to lessen its dependence on the personal computer market.

The announcement by Michael D. Capellas, Compaq’s new president and chief executive, came during a keynote address at Telecom 99, a major trade show this week in Switzerland.

The company will reorganize its telecom operations under a new unit based in the ``Telecom Corridor″ in the north Dallas suburb of Plano, Compaq spokesman Alan Hodel said.

The new Compaq Telecommunications will bring together 2,000 Compaq employees currently working in other divisions. Half of the staff would stationed in the United States.

Larry S. Schwartz, previously general manager of Compaq Telecom Network Solutions, will serve as the new group’s general manager.

Compaq’s new telecom engine for tracking telephone calls and billing customers can handle 15,000 transactions per second as well as up to 40,000 customer service operators.

Compaq, the world’s largest personal computer maker, expanded its telecom operations two years ago when it bought Tandem Computers Inc. Compaq also makes network systems for automatic banking, securities trading and other activities.

In July, the company announced plans to cut up to 8,000 jobs after price wars and slowing sales left the computer maker with a $184 million loss in the second quarter and forced the ouster of top management.

Hodel said Compaq is relying on telecom and other large-scale computing customers to help get the company back on track. Compaq now derives more than half of its revenue from large-scale, non-PC products designed to drive networks and other large operations.

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