Nokia Siemens Networks has agreed to buy the wireless operations of Canada's Nortel Networks Corp. in a $650 million (¤465 million) deal as the more than century-old Nortel looks for buyers for the rest of its assets, AP reported. The Finnish-German joint venture said Saturday it was buying the LTE and CDMA assets of Nortel, a former telecommunications equipment powerhouse that sought bankruptcy protection in January and now plans to liquidate its business. The deal is subject to court approvals. Nokia Siemens is looking to strengthen its position in North American markets. Nortel, on the other hand, is winding down a company with a 127-year history in Canada and said it is in advanced talks to sell the rest of its operations. Nortel CEO Mike Zafirovski had hoped to restructure and preserve Nortel but he had struggled to sell assets since seeking bankruptcy protection in Canada and the United States. «After careful review Nortel has decided the sale of its businesses is the best path for Nortel to deliver on its stated objectives of maximizing value while preserving innovation, customer relationships and jobs to the greatest extent possible,» Nortel spokesman Mohammed Nakhooda said. «The process is well under way and the company is advancing in its discussions with external parties to sell its other businesses,» he said. Zafirovski said their enterprise business, their optical Metro Internet business and their carrier voice over IP and application business as well as part of the wireless business are among the assets still up for sale. Nortel also said it will ask to have its shares delisted from the Toronto Stock Exchange. Nortel employs more than 25,000 people around the world. During the 1990s telecom and Internet boom, Nortel had more than 95,000 employees. At one point in 2000 it accounted for one-third of the market value on the entire Toronto Stock Exchange. After the dot-com bust, Nortel had problems of its own: an accounting crisis that sparked shareholder lawsuits, regulatory investigations and the firing of key executives, including CEO Frank Dunn. Zafirovski, a former executive at Motorola Inc. and General Electric Co., was named CEO in late 2005. The next year, Nortel paid $2.5 billion to settle shareholder litigation over the bookkeeping scandal. Zafirovski has presided over a disheartening series of work force cuts and restructurings in his effort to, as he regularly put it, «re-create a great company.» Nokia Siemens Networks is a joint venture of the Finland's Nokia Corp., the world's top mobile phone maker, and Germany's Siemens AG. It employs 60,000 people worldwide. Nokia Siemens hopes to get court approvals for its deal soon. It described the planned acquisition as «a significant step towards strengthening its leadership» in Long Term Evolution, or LTE, technology. «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,» the Espoo, Finland-based company said. CDMA, or code division multiple access, is a rival standard to the dominant cellular standard GSM, or global system for mobile, while LTE is a next-generation wireless network technology. Under the deal more than 2,500 Nortel employees, mostly in Canada and the United States, would be transferred to Nokia Siemens Networks. Canada's government-owned export credit agency, Export Development Canada, would support the transaction with a $300 million loan commitment, Nokia Siemens said. Nortel reported a first-quarter net loss this year of $507 million with revenue falling by 37 percent from 2008 to $1.7 billion. Nortel's customers, including Bell _ Canada's leading telecommunications company _ welcomed the deal which Nokia Siemens said would ensure the continuation of Nortel's research and development sector. «As Nortel's largest customer in Canada, Bell supports Nokia Siemens' plan to continue to foster Nortel's long history of research and development in Canada,» said Stephen Howe, spokesman for Bell Mobility. «This news eliminates industry uncertainty and enhances CDMA ... today and in the future,» said Dan Hesse, CEO of Kansas City-based Sprint Nextel.
