14 DAY TRIAL // Nortel announced that it has signed a non-binding Memorandum of Understanding for the sale of its UMTS access business to Alcatel for US $320 million, a move that will enable Nortel to simplify its business and strategically focus its investments for leadership in key markets while ensuring its customers' UMTS access requirements will continue to be met.
"Nortel is sharpening its focus on the markets in which we intend to lead. Our UMTS access business lacks the scale and momentum needed to become profitable," said Mike Zafirovski, president and chief executive officer, Nortel.
As part of its ongoing mobility business, Nortel will continue to develop and support solutions for the evolution of GSM access and core, GSM-R, GPRS and EDGE technologies as well as CDMA access and core and UMTS core.
The proposed sale includes Nortel's UMTS access product portfolio made up of the Radio Network Controller and Node B products and OAM solutions, related services and associated assets. It is anticipated that the significant majority of employees of Nortel's UMTS access business will transfer to Alcatel. Completion of the transaction is subject to, among other things, the negotiation and execution of a definitive agreement between Nortel and Alcatel, completion of consultations with work councils and other employee representatives, and customary closing conditions including regulatory approvals. The parties are targeting completion of the transaction in the fourth quarter of 2006.
"The expertise of Nortel's UMTS team is well-known, and I am confident that our combined forces will pave the way for further success in the wireless market," said Marc Rouanne, president of Alcatel's mobile communications activities. "We are committed to support and evolve our extended customer base."