After weeks of speculation as to what it will sell and to whom, bankrupt Nortel Networks has finally ripped the Band-Aid off, announcing the sale of its CDMA and LTE wireless carrier networks business to rival Nokia Siemens Networks for $650 million.
The agreement with NSN specifies that at least 2,500 employees would have the opportunity to continue with NSN. This represents a significant portion of the employees associated with the assets being sold, Nortel said.
The deal is the first sale of many, if Nortel is successful in its plan to sell off its assets, as announced late Friday.
“The value of Nortel’s wireless business is recognized throughout the industry. The agreement we are announcing today is solid proof of that value and represents the best path forward for our other businesses,” said CEO Mike Zafirovski. He noted that Nortel is in advancing discussions with external parties to sell its other businesses.
Nortel is the second-largest supplier of CDMA infrastructure in the world. It does business with three of the five top CDMA operators globally, including Verizon Wireless. Also, Nortel has done a significant amount of LTE testing for several carriers, including Verizon and T-Mobile AG.
“Seeking a strong and stable buyer is the best path forward for our CDMA business and LTE Access assets,” said Richard Lowe, president of Carrier Networks at Nortel, in a statement. “If successfully completed, this transaction would give many of our CDMA customers a clear roadmap for the future evolution of their networks and the opportunity to extend their relationship with a long-term partner. Further, we expect that a significant portion of the employees associated with the assets being sold would be able to continue their innovative work.”
Existing customers will continue to be supported, he added: “Throughout this sale process, our customers will continue to receive the highest quality support for their current networks. If successfully concluded, the buyer would gain access to leading edge technology, know-how, and embedded resources to support this significant customer base.”