Nortel could suffer most on enterprise side

Nortel Networks has been searching for a buyer for its Metro Ethernet business unit (which also includes its optical business), implying that, if a sale were completed, the longtime telecom equipment vendor could end up looking more like a chiefly enterprise vendor, such as Cisco Systems.

But according to an analyst at investment firm Oppenheimer & Company, its Nortel’s enterprise business that could be in greater jeopardy, due to the vendor’s presently tenuous financial state.

“We believe Nortel's enterprise business could deteriorate faster than its carrier business,” Oppenheimer analyst Ittai Kidron wrote in a research note last week.

That assessment is largely due to recent reports that Nortel is considering bankrupcty, Kidron wrote, a development that -- whether or not it actually occurs -- may already be prompting Nortel’s enterprise channel partners (the companies that sell Nortel’s enterprise gear) to look for alternatives. “We expect competitors to aggressively poach Nortel's channels and enterprise business," Kidron wrote.

In particular, Kidron believes Juniper Networks is already moving quickly to convert Nortel’s partners.