Nortel Networks: Soon, No More?

Posted by: Olga Kharif on June 22, 2009

On June 19, telecom gearmaker Nortel Networks announced it will sell some of its key assets to Nokia Siemens. The company also said “that it is advancing in its discussions with external parties to sell its other businesses.”

Essentially, all of Nortel is up for sale. If all these sales go through, as expected, Nortel will be no more. Until now Nortel’s execs have claimed that they will only sell a few divisions, and Nortel will emerge out of bankruptcy phoenix-like.

But industry insiders have long doubted viability of this scenario. It takes scale to compete against giants like Alcatel-Lucent and Ericsson in telecom equipment nowadays. And with every business sale, Nortel is losing its scale. At some point, it simply makes sense to liquidate the company than to try to be a minor player in a market where giants get all the customer wins.

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Reader Comments

Jim

June 22, 2009 12:15 PM

Nokia is getting bigger and bigger. It's a good company that made cheap phones available to 3rd world Countries

zamin husain

June 24, 2009 10:52 AM

Nokia Siemens is buying “substantially all” of the CDMA business, but leaving behind some unprofitable international contracts. The unit had $2.2 billion in sales last year, and people familiar with the matter estimated its operating profit at around $700 million. Gone from the deal was Nortel’s market-leading VoIP business, used to transmit voice calls over the Internet, and a legacy voice technology known as TDM. Given the offering price, Nortel decided to separately sell those assets, bundled into a unit called Carrier Valued Added Services.

zamin husain

June 24, 2009 10:58 AM

the beginning of the end for Nortel Networks Corp. A 114-year-old dynasty that slipped into bankruptcy protection five months ago and will now be sold off, piece by piece

Employee

June 24, 2009 06:28 PM

Being still an employee of Nortel, however not in NA but in EMEA, I need to state that Mike Z. left us behind already a while ago. He stated that we would not go to file end of 2008. Beginning 2009 we filed. Then he said there would be no split of the company, now we know. Then he said we sell some part but we do not go for liquidation (this was actually ~4 days ago, now we do. It was fairly obvious since quite a while, but the guy telling that 'people are our strenght' lets us and even our customers completely down.

As an employee working at Nortel since a really long time I would have expected to get treated with the same respect and loyality as I (and most of the others I'm working with since years all over EMEA) showed it throughout the years to the company.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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