NSN to buy Nortel’s wireless assets

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Nokia Siemens Networks CEO Simon Beresford-Wylie said the deal would boost the vendor’s presence in North America.

Nokia Siemens Networks (NSN) announced yesterday that it has struck a deal to acquire two wireless divisions from struggling Canadian vendor Nortel.

The planned US$650 million acquisition, which will be funded by a loan from Canada’s government-owned export credit agency, will see Nortel’s LTE team and its CDMA division become part of NSN.

LTE (long term evolution) is a next generation technology that a handful of operators around the world have already committed to using, while CDMA (code division multiple access) is a rival to dominant cellular standard GSM.

In a message to Nortel staff, Nokia Siemens Networks chief executive officer, Simon Beresford-Wylie, explained some of the reasons behind the decision: “It is no secret that Nokia Siemens Networks has a lower market share in North America than we do in other parts of the world – and adding all of you from the CDMA team would help us gain scale in the region. Critically, it would also help us build stronger, deeper relationships with key customers.”

And he said that while NSN already has “a strong LTE team”, he pointed out that it is primarily based in Europe.

“We’d like to have Ottawa (where Nortel’s research and development team is based) become a long-term wireless center of excellence within Nokia Siemens Networks, complementing our other global sites.”

In a statement, NSN said the transaction would see more than 2,500 Nortel employees - largely located in Ottawa, Canada and Dallas, United States but also including employees in Mexico and China - transferred to Nokia Siemens Networks. Approximately 400 of those employees are focused on LTE research and development.

The deal is subject to approval by Canadian and US courts as Nortel is currently operating under bankruptcy protection.

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