Gasping for air, Nortel to sell off wireless tech

Nokia Siemens Networks will buy Nortel Networks' wireless technology business for $650 million.

Struggling Nortel, a one-time giant in telecommunications equipment, had filed for Chapter 11 bankruptcy in January in hopes of reorganizing. But that is unlikely now.

Nokia Siemens said Friday that it will use Nortel's CDMA and LTE technology to expand its presence in North America. CDMA, or code division multiple access, is one of the two major networks operating in the U.S. and is used by Verizon Wireless and Sprint. LTE, or Long Term Evolution, is 4G wireless technology that will potentially replace today's mobile networks.

"This agreement provides an important strategic opportunity for Nokia Siemens Networks to strengthen its position in two key areas, North America and LTE, at a price that makes good economic sense," Nokia Siemens CEO Simon Beresford-Wylie said in the statement.

As part of the deal, about 2,500 Nortel employees in the U.S., Canada, Mexico, and China can keep their jobs. Nortel said this represents a "significant portion" of the workers associated with that part of its business.

"Maximizing the value of our businesses in the face of a consolidating global market has been our most critical priority. We have determined the best way to do this is to find buyers for our businesses who can carry Nortel innovation forward, while preserving employment to the greatest extent possible," Nortel CEO Mike Zafirovski said in a statement.

Toronto-based Nortel also said that it is working toward selling off the other parts of its business and that it is applying to be delisted from the Toronto Stock Exchange.

The deal with Nokia Siemens, which is expected to close in the third quarter, must be approved by both U.S. Bankruptcy Court and the Ontario Superior Court of Justice.

Nortel was founded in 1895 as Northern Electric and Manufacturing and supplied telecommunications gear for Canada's young telephone system. At the height of its glory days about 10 years ago, Nortel was worth $250 billion and had more than 90,000 employees.

[upuaut]

Nortel is still around?

[theboyr]

From what I'm hearing from another telecom company, Avaya is going to pick up the rest of Nortel soon. They have such an overlapping product in the PBX market, they're going to be so far behind Cisco and Mitel in terms of going towards a more future thinking solution for communications, not just PBXs...

Not to mention Avaya and Nortel both bleed money left and right at the moment.

[lkrupp]

There are tens of thousands of Nortel DMS-100 telephone switches deployed all over North America in the eighties that are still in service. There will be a market for replacement parts and software for the foreseeable future. Somebody will have to pick that part up.

[TV James]

Our VPN and voicemail systems are by Nortel. The sooner Nortel turns out the lights, the better. The VPN shuts down all open processes (including the wireless or cellular connection) while connecting, and well, the voicemail is just evil.