Nortel, Huawei plan joint broadband venture

Canada's Nortel Networks Corp. and China's Huawei Technologies Co. Ltd. have agreed to establish a joint venture company that will target service providers with broadband access equipment, they announced Wednesday.

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Under a memorandum of understanding signed by the companies, Nortel will own a majority of the joint venture company, which will have headquarters in Ottowa, the companies said.

Joint development of new products is already under way, the companies said. The joint venture will focus on enhancing Huawei's current broadband access products, which include IP-DSLAM ports, and developing new "ultra broadband" products, they said.

Nortel and Huawei will have exclusive rights to sell the products. They will offer them to service providers for delivering voice, video, data and wireless services to businesses and home users on a common Internet Protocol-based platform that supports copper, fiber and fixed wireless networks, they said.

The companies, which are both rivals of Cisco Systems Inc., have also signed a supply agreement under which Nortel will sell Huawei's broadband access products.

The companies expect to complete formation of the new company in the third quarter, when they will also be ready to start selling jointly-developed products, they said.