Nokia Siemens Networks to acquire key Nortel assets

MANILA, Philippines - Nokia Siemens Networks has announced an agreement to acquire key assets from Canada-based Nortel Networks Corp. to step up its leadership in Long Term Evolution (LTE) next-generation wireless technology.

Last June 19, the financially strapped Nortel announced a bid from Nokia Siemens Networks to purchase its CDMA and LTE assets for $650 million.

The planned $650-million acquisition, which will bring together the highly complementary assets of the two companies in the field of mobile radio access, adds further key talent and resources to enhance Nokia Siemens Networks’ existing strength and momentum in LTE.

The acquisition of Nortel’s profitable CDMA business would significantly improve Nokia Siemens Networks’ presence in North America and make it a leading supplier of wireless infrastructure products in the region.

“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,” Simon Beresford-Wylie, chief executive officer of Nokia Siemens Networks, said in a press statement.

“It also represents stability for Nortel’s existing customers and offers a great opportunity for employees to move into a stable future with an industry winner. The R&D organization in Canada would become a long-term wireless center of excellence within Nokia Siemens Networks, complementing our other global sites,” he added.

The transaction would see more than 2,500 Nortel employees — largely located in Ottawa, Canada and Dallas, United States but also including employees in Mexico and China — transferred to Nokia Siemens Networks.

Some 400 of these employees are focused on LTE research and development, and would enhance the ability of Nokia Siemens Networks to provide innovation and strengthen its position in LTE, where it is already working with customers such as NTT DoCoMo in Japan.

The support and development of Nokia Siemens Networks’ existing product lines would be unaffected by this acquisition, company officials said.

Feedbacks from the customers of both companies regarding the transfer of technology ownership have been largely positive.

Verizon, Bell Mobility and Sprint, for example, all echoed their eagerness to see continued research and development in LTE by Nokia Siemens Networks as they rapidly build their advanced next-generation wireless networks.

Meanwhile, Nortel also announced that it would no longer likely emerge from bankruptcy protection, which it filed last Jan. 14 in the United States, Canada, and United Kingdom, and would be seeking to sell its remaining business units.

As of last June 22, Nortel has ceased trading its shares on the Toronto Stock Exchange and has applied to delist its shares.

In the late 1990s, Nortel’s company shares shot through the roof on speculations of significant profits from sales of fiber optic network gear. But when the Internet bubble burst, Nortel became one of the biggest casualties.

Local projects

Nokia Siemens Networks recently started to deploy a Service Quality Management Platform to optimize the end-to-end service environment of Smart Communications’ cellular network.

The two companies are also cooperating to implement capacity improvements in Smart’s network to prepare for the uptake of new services.

These measures are in line with Smart’s major service quality initiative to enhance customers’ service experience as it maximizes its traditional voice and text messaging services and moves toward a rich media environment.

Orlando Vea, Smart’s chief wireless advisor, said the company “has adopted the strategy of ‘slicing and dicing’ the market by developing services that address the specific needs of various segments of the cellular market. We are building up capacity and raising service quality to support this strategy. Smart’s operational organization is also undergoing changes and with the support of Nokia Siemens Networks, we see an opportunity to move to the next level of customer experience.”

Bosco Novak, chief marketing operations officer of Nokia Siemens Networks, on a recent visit to the Philippines, noted that Smart’s initiative maps directly onto Nokia Siemens Networks’ own strategy focus of delivering service efficiency to enhance the customer experience.

“Smart’s network connects a multitude of terminals to a wide variety of different applications. We at Nokia Siemens Networks will leverage our global experience to support Smart in optimizing its multi-radio network for superior end-customer experience,” Novak said. – Alma Buelva