Jun 24, 2009 1:54 PM,

Nortel selling it all, including its name

By Kevin Fitchard

Carrier networks president says the Nortel brand could be a key bargaining chip in and business unit sale

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The Nortel Networks (TSE:NT) name could live on long after the demise of the company. Along with its metro Ethernet, enterprise and wireless assets, it could sell its brand name in its impending break-up, said Richard Lowe, Nortel president of carrier networks.

“Nortel as a brand could very well continue to exist,” Lowe said. “It could as part of one of the business sales, given the brand recognition Nortel has.”
After spending most of this year under Chapter 11 bankruptcy protection, Nortel is eschewing its once-planned restructuring, announcing last Friday that the best course for the company, its creditors, customers and employees is to break up its individual components and sell them off. Nokia Siemens Networks (NYSE:NOK, NYSE:SI) has already bid on its CDMA business unit and long-term evolution (LTE) technology, but there are still plenty of assets on the table.

On the top of that list are its Enterprise business unit, which could attract multiple bidders, and its Metro Ethernet Networks business, which Nortel made plans to sell last year but later rescinded. The rights to the Nortel name could go with either division. But Nortel has several other assets including its global services division as well as the sizable chunk of its wireless portfolio that NSN didn’t bid on.

NSN’s $650 million offer is only for Nortel’s CDMA business unit and its LTE radio technology assets, leaving Nortel’s substantial GSM/UMTS switching and GSM radio business on the block, as well as well as the packet core side of its LTE technology. Bidders could choose to slice and dice Nortel’s businesses depending on their needs. For instance a vendor could bid solely on Nortel’s optical business, which encompasses about 80% of its metro Ethernet business.

While Nortel wants to complete the break-up quickly (NSN is hoping to take possession of CDMA and LTE as soon as August), Nortel as an entity will likely exist for some time as it sells off the various pieces that don’t immediately get scooped up, Lowe said. A business services group will be established to “settle the estate,” Lowe said.