Nortel to abandon carrier Ethernet, optical

According to Cooperson, possible acquirers could include Huawei Technologies (to quickly gain North American market share), Cisco Systems or Juniper Networks (to more deeply penetrate the optical market) or smaller optical vendors such as Sycamore Networks, ECI Telecom, Ciena, Adva Optical Networking or even Infinera, which has recently voiced a desire to branch out more into the metro networking market.

“Last I checked, both Sycamore and Ciena were sitting on a fair amount of cash, but if Nortel is…expecting cash, the possible list of suitors--particularly the smaller suitors--given the trouble with the credit markets, will have a hard time getting it,” Cooperson wrote. “And I still have a hard time imagining Huawei being a realistic acquirer, given its spotty success with [joint ventures] and acquisitions to date as well as the huge cultural wall Huawei would have to scale for success.”

And cash is Nortel’s preference. In answer to an analyst’s question on today’s call, Zafirovski said, “It is a very safe assumption to say our strong preference would be a transaction involving cash.”

Nortel also said it would move to “mitigate risk” in the company’s chosen 4G wireless strategy but wouldn’t offer specifics.

“LTE is a terrific technology,” Zafirovski said. “But with 8, 9, 10 players competing in that environment, industry dynamics will require various forms of cooperation, and we are pursuing those discussions.”