Nokia Siemens Networks plans to keep 800 employees from Nortel Networks Corp.’s carrier wireless assets in Canada, and is optimistic it can complete its acquisition by the end of November.
NSN Friday announced it has entered a “definitive agreement” to acquire for US$650 million the Nortel business that makes wireless technologies using the code division multiple access (CDMA) and Long Term Evolution (LTE) standards. The deal is subject to approval by bankruptcy courts in both Canada and the U.S.
The acquisition, for NSN, is about “having a deeper base in Canada,” said Simon Beresford-Wylie, chief executive officer of Nokia Siemens Networks.
On a conference call Monday morning, Beresford-Wylie said Nokia Siemens Networks now has offices in Vancouver, Calgary, Toronto and Montreal.
If the deal to buy Nortel’s CDMA and LTE assets is approved, Nokia Siemens Networks would inherit “a large site in Ottawa and “several other small sites,” Beresford-Wylie said. These employees would focus on development, product management, operations, sales, service and LTE trials, he added.
“We plan to keep Canada absolutely at the heart of wireless research,” Beresford-Wylie said, adding Canada has a “very fine reputation in the telecom sector for innovation, fine products and customer services.”
NSN officials would not comment on reports the company is interested in other Nortel business units. On Friday Nortel said it was in “advanced discussions” to sell its other units and has asked the Toronto Stock Exchange to delist its shares, which were trading at 18 cents last week, down from $123 in the summer of 2000 (before a ten-for-one consolidation).
Nortel “has made a significant contribution to Canada’s high tech capabilities,” Beresford-Wylie said Monday.
NSN officials acknowledged CDMA sales are dropping as wireless carriers migrate their networks to third and fourth-generation technologies, but Beresford-Wylie said CDMA was profitable for Nortel. “Along with it comes a tremendous customer base,” he said.
Sue Spradley, president for North America at Nokia Siemens Networks, was also on the conference call. She said while carriers may be moving away from CDMA, “many will take their time doing that.” Therefore, Spradley said, acquiring Nortel CDMA customers will give NSN the opportunity to sell them services and products to migrate their networks to next generation.
NSN plans to keep “the majority” of current Nortel CDMA and LTE employees, meaning about 2,500 would be offered jobs with NSN, about 800 of those in Canada. Of the 800 in Canada, “the bulk of those” would work in Ottawa, Beresford-Wylie said, adding NSN expect those 800 are the “bulk of” current Nortel CDMA and LTE workers in Canada.
But it will be up to Nortel to pay them any pension or retirement health care benefits for their years of service with Nortel, Beresford-Wylie said.