Ernst & Young, the court-appointed monitor of Nortel NetworksCorp., revealed this week some un-named carriers decided not to buyLong Term Evolution (LTE) gear from Nortel despite successful trials.
Inits 14th report to the Ontario Superior Court of Justice (CommercialList), Ernst & Young stated that after Nortel filed forcreditor protection last January, “Nortel learned that it was not beingselected for commercial opportunities by potential key lead customersdespite having positive trial results with several of these customers.”
Whatisn’t clear is whether the un-named carriers decided not to buyNortel’s LTE gear because of the Nortel name, or whether they decidedit was too early to be buying LTE. It brings to mind recent commentsmade by Nadir Mohamed, chief executive officer of Rogers CommunicationsInc. When asked at the Canadian Telecom Summit for detailsof Rogers' LTE plans, he would only say the technology is a“few years” out and Rogers is still trying to get the most out of itsHigh Speed Packet Access (HSPA) network.
Nortel continues todevelop LTE products, but as a result of its failure to close somedeals, “Nortel’s plans to offer end-to-end LTE commercial solutionswere suspended,” according to Ernst & Young’s report.
Ernst& Young got the monitor job after Nortel filed for protectionin Canada under the Companies Creditors Arrangement Act and the U.S.under Chapter 11. The 14th report dealt mainly with the agreementto sell the CMDA and LTE business to Nokia Siemens Networks,announced last Friday.
Some more tidbits of information from this report:
-AlthoughNokia Siemens Networks has previously stated it intendsto offer jobs to about 2,500 Nortel workers (about two-thirdsof them in Canada), this is actually one of the conditions of the saleto Nokia Siemens Networks. The terms of the agreement states NokiaSiemens Networks “shall extend written offers of employment to at least2,500 employees” and those offers “shall be … on terms and conditionsno less favourable, in the aggregate, than those the employeescurrently have, but subject to certain adjustments to confirm to (NokiaSiemens Networks) standard employment policies ….”
-The deadlinefor competing bids to buy Nortel’s CDMA and LTE business is 4:00 pmEastern Time July 21. Nortel may, “after consultation with the(Official Committee of Unsecured Creditors), the Bondholder Group and(Ernst & Young),” extend the bid deadline.
-An un-namedvendor (i.e., we don’t know for a fact it was LM Ericsson of Stockholm)was talking to Nortel about buying the business Nokia Siemens Networkshas agreed to acquire. “The Monitor is advised that given the nature ofthe Business and the consolidation occurring in the global market,there are likely to be a limited number of parities interesting inacquiring the business,” Ernst & Young stated in its report.“The Monitor is further advised that the applicants have previouslyengaged in discussions with certain of these parties and the Monitorhas observed the extensive discussions held to date with Nokia Siemensand one other primary competitor.”
The deal to sell the CDMA andLTE business to Nokia Siemens Networks still has some hurdles to clear. Whether the company goes through a similar exercise with theenterprise unit remains to be seen. Despite rumours that Avaya istalking about buying the unit, and Nortel’s announcement it is in“advanced discussions” to sell its other units, the report states: “Thecompany will assess other restructuring alternatives for thesebusinesses in the even it is unable to maximize value through sales.”