Nokia Siemens Networks, Avaya, and Siemens Enterprise Communications are moving in to buy parts of troubled Nortel Networks, the Wall Street Journal reported Wednesday, citing unnamed sources.
Nortel filed for bankruptcy protection in January after years of financial scandal and losses, but the maker of carrier and enterprise communications equipment still has strong technology and a healthy position in the North American market. Even since its bankruptcy filing, the company has said it wanted to keep all or part of its operations intact, but some industry observers believe it will have to sell significant pieces to satisfy shareholders.
Nokia Siemens made an unsolicited bid last month for large parts of Nortel's carrier equipment business, the Journal reported. They include Nortel's successful CDMA (Code-Division Multiple Access) cellular unit, its older TDM (Time-Division Multiplexing) mobile division, and the research division working on upcoming LTE (Long-Term Evolution) fourth-generation technology. The company is also interested in Nortel's VoIP business, the report said. Nokia Siemens is a joint venture of Nokia and Siemens focused on telecommunications infrastructure.
Competitors are also interested in Nortel's enterprise telecommunications business, according to the Journal. Siemens Enterprise Communications and Avaya submitted offers last week, as well as Golden Gate Capital, a private equity firm based in San Francisco. Cisco Systems has not bid for that division.
Another possible suitor, Genband, is interested in the Nortel unit that makes gateways between the traditional and IP telecommunications networks, the Journal reported. Genband's own products are distributed by Nortel today.
Nortel has been ailing since the telecommunications crash early in this decade. Carrier mergers are now shrinking the customer base for its products, while Chinese rivals such as Huawei and ZTE gain ground with lower prices. The company has already left the mobile WiMax business and sold its application acceleration unit, but it recently said it was reconsidering the sale of its metropolitan Ethernet unit.