June 24, 2009

Nokia Siemens Stakes Claim in North American Wireless

In a move to gain a greater presence in North America, Nokia Siemens Networks is purchasing the CDMA and Long Term Evolution (LTE) assets of Nortel Networks for a proposed purchase price of $650 million. (For the initial announcement, click here.) Nortel, a Canadian telecom equipment maker, declared bankruptcy in January.

By purchasing Nortel's CDMA and LTE mobile technologies, NSN is staking its claim in North America's wireless future.

In a media call Monday, NSN's CEO Simon Beresford-Wylie said: "This acquisition is not predicated on the need to find synergies. We (NSN) do not have a CDMA business. We plan to keep Canada absolutely at the heart of wireless research."

But CDMA may be just a stepping-stone to the real prize: North America's LTE market.

CDMA is profitable, "but is a declining market," said Beresford-Wylie. "The attractiveness is that it's a profitable business, but along with it comes a tremendous customer base ... that we will use as a springboard to grow in LTE."

Verizon Wireless is leading the charge for LTE in the United States and did not choose NSN as one of its primary equipment providers. (For more, click here and here.) Nevertheless, Beresford-Wylie said NSN does work with Verizon on IP Multimedia Subsystem (IMS) technology and remains hopeful that it will work with Verizon on LTE access deployment.

But NSN will get a jump on LTE deployments with its Japanese customer NTT-DOCOMO. Beresford-Wylie said the Japanese operator is "the company that is likely to be first with LTE." (For more, click here.)

If the Nortel asset acquisition passes all regulatory hurdles, the deal is expected to close in third quarter 2009.

- Linda Hardesty