Nortel signs $650m deal with Nokia Siemens

• Source: Global Times
• [07:42 June 22 2009]
• Comments

Telecom equipment maker Nortel Networks announced over the weekend that it will sell its advanced wireless technology business to Nokia Siemens Networks (NSN) for $650 million. Nortel also said it is progressing in talks to sell other divisions.

Nortel, once the largest North American maker of telecommunications equipment, collapsed into bankruptcy in January, blaming the economic crisis for derailing a turnaround effort that began in 2005.

The deal will allow Nokia Siemens to expand its presence in North America and make it a leading supplier of wireless infrastructure products in the region, Nokia Siemens said in a separate statement.

The transaction with Nokia includes Nortel’s CDMA business and LTE (Long Term Evolution) assets.

CDMA is the technology that lost the battle for global dominance but still has a strong position in some markets, including North America. Nortel has a roughly 30-percent share of the global CDMA market.

LTE is a new high-speed wireless technology that is intended to replace current mobile networks. LTE networks are slated to be deployed in the coming years by large wireless carriers such as Vodafone and Verizon.

Under the terms of the deal, at least 2,500 Nortel employees in Canada, the United States, Mexico and China have the opportunity to keep their jobs under NSN ownership.

Declining to give a specific percentage, a Nortel spokesman said this represented “a majority” of the employees associated with the assets.

The deal is subject to approval by both a US bankruptcy court and the Ontario Superior Court of Justice, Nokia Siemens said in a statement. Final sale hearings are expected July 28 in the United States and July 30 in Canada. The sale is expected to close in the third quarter.

Reuters