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Stocks N / Nortel Networks Corp.
|Subject: How Nortel bankruptcy could change vendor landsc||Date: 1/21/2009 2:42 PM|
|Author: mendomann||Number: 5024 of 5026|
How Nortel bankruptcy could change vendor landscape
January 16, 1009
Though Nortel Networks is vowing to return from bankruptcy as a stronger, healthier version of its current self, it’s more likely the company will be broken apart and/or acquired by other equipment vendors, which could significantly re-order the landscape of today’s telecom suppliers, according to Dana Cooperson and Matt Walker, analysts at Ovum, a consultancy.
Because Nortel reorganized itself in recent months into three units seemingly tailored for separation – enterprise, carrier networks and metro Ethernet networks (or MEN, which includes optical gear), it’s unclear at this point which assets might remain with Nortel after it restructures. How it is divided – if it is divided -- may depend in part on gaps in the product portfolios of vendors bidding for assets.
“For example, Ericsson and [Nokia Siemens Networks] both have gaps in their wireline portfolios and little position in enterprise,” the Ovum analysts said in a research note today. “Acquiring significant chunks of Nortel may be attractive to both, and their relatively high cash reserves could make it possible: As of September 2008, both vendors had just under $10 billion in cash and short-term investments.”
Meanwhile, Nortel’s 4G wireless technology, based on Long-Term Evolution (LTE), may be useful to Alcatel-Lucent, NEC or ZTE. Verizon Wireless and T-Mobile Germany have both trialed