Nortel Waits on WiMax

Nortel Networks Ltd. (NYSE/Toronto: NT) is unwilling to jump on the WiMAX wireless metropolitan area network (MAN) bandwagon just yet, mirroring a strategy adopted by cellular network rival LM Ericsson (Nasdaq: ERICY) (see Ericsson Cool on WiMax).

Speaking to Unstrung today, the Canadian vendor says it is keeping a close eye on 802.16 technology but believes it is too early to determine its long-term market potential (see Working for the MAN for more detail on the technology).

"We think this could be a very important technology, but it still has a ways to go before we reach the cost efficiencies needed to be competitive with alternative wireless technologies," claims a company spokesperson.

To date Nortel has not joined the WiMAX Forum, the industry body aiming to promote and certify the compatibility and interoperability of WiMAX-branded wireless products employing the latest revisions of the 802.16 standard from the Institute of Electrical and Electronics Engineers Inc. (IEEE).

"We are not members, but we are considering joining. We are supportive of standardization for obvious benefits to all, and are also supportive of regulatory policies that allow license flexibility and support technology choice."

Nortel's viewpoint contrasts with recent announcements from network rivals Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and Siemens AG (NYSE: SI; Frankfurt: SIE). Both vendors have outlined plans to move into the market in 2005, using silicon from Intel Corp. (Nasdaq: INTC) (see WiMax Gets Serious).

Meanwhile, Nokia Corp. (NYSE: NOK) has rejoined the WiMAX Forum, claiming that the technology could play a major role in the vendor's future plans (see Nokia Rejoins WiMax Forum). Motorola Inc. (NYSE: MOT) has also committed to the industry body (see Moto Joins WiMax Forum).

Last November, Nortel sold its fixed wireless access business to Airspan Networks, but it has recently ramped up its presence in the wireless networking space following an 802.11 mesh trial with BT Group plc (NYSE: BTY; London: BTA) and the Massachusetts Institute of Technology (MIT) (see Airspan Acquires Nortel Sub and Nortel: Another Fine Mesh).

— Justin Springham, Senior Editor, Europe, Unstrung

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