Hitachi Takes Nortel's LTE Packet Core

Hitachi Ltd. (NYSE: HIT; Paris: PHA) is putting up $10 million to acquire some of Nortel Networks Ltd. 's packet core assets, the companies announced today.

Hitachi is snapping up Nortel's Long-Term Evolution (LTE) packet core assets, a.k.a. Evolved Packet Core (EPC), or "certain assets associated with the development of next generation packet core network components," as the press release states. The assets do not include legacy packet core elements from Nortel's GSM and UMTS businesses. (See Hitachi to Buy Nortel's Packet Core.)

The deal -- which includes licenses to some patents but not the patents themselves -- was conducted as an auction, but was not subject to the stalking-horse bidding process unlike larger pieces of Nortel's business that have been sold off, such as the CDMA business and LTE assets and the enterprise business. But the sale still has to be approved by U.S. bankruptcy court and the Ontario Superior Court of Justice. (See Avaya's $900M Bid Wins Nortel Auction, Nortel Wireless Winner: It's Ericsson!, and Nortel Could Sell LTE Patents Separately.)

Unstrung reported that Hitachi was a potential bidder for Nortel's LTE core assets when the Canadian vendor announced its intention to sell them last month. (See Nortel's Next Auction: The Packet Core.)

Hitachi was a likely candidate, though, as it had collaborated with Nortel on developing a Mobility Management Element (MME) for KDDI Corp. 's LTE packet core and had recently opened an LTE research center in Dallas. It is understood that the assets Hitachi has bid for are those that the two companies were working on together for KDDI. (See Nortel Snares LTE Core Deal, Hitachi Does LTE R&D in Dallas, and Core Network Challenges LTE Vendors.)

— Craig Matsumoto, West Coast Editor, Light Reading