Optical/IP Networks

Poll: Huawei Likely Nortel Wireless Biz Buyer

As Nortel Networks Ltd. hunkers down to restructure itself, many in the industry believe that Huawei Technologies Co. Ltd. is the company most likely to pick up the Canadian vendor's wireless assets if Nortel decides to sell.

That's what Unstrung readers say in the early results of our latest poll, which asks for your opinion on what will become of Nortel's wireless business. (Add your vote by clicking on this link.)

So far, 32 percent of respondents say Huawei is the most likely buyer, while 24 percent say that no one will buy the wireless business.

The votes for "no one" could have different interpretations here, as in: No one in their right mind would want to buy Nortel's wireless business; or no one will get a chance to buy because Nortel won't sell.

After Huawei and "no one," 18 percent of poll takers said the most likely buyer would be some company other than Huawei, Alcatel-Lucent (NYSE: ALU), Motorola Inc. (NYSE: MOT), NEC Corp. (Tokyo: 6701), Nokia Networks , or ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763).

Looking beyond the wireless infrastructure vendors, who would be interested? Private equity firms? Google (Nasdaq: GOOG)? Maybe Moosehead, or Wal-Mart? [Ed note: No, wait, we've done that joke.] (See Huawei Seen as Likely Nortel Suitor and Nortel to Sell Carrier Ethernet, Optical Biz.)

So what does Nortel have in wireless? Since Nortel sold its UMTS business to Alcatel-Lucent (NYSE: ALU), stopped making WiMax equipment, and said that it is seeking partners to develop Long-Term Evolution (LTE) gear, what's left is CDMA and GSM -- and some UMTS from the LG-Ericsson Co. Ltd. joint venture with LG Electronics Inc. (London: LGLD; Korea: 6657.KS) . (See Good News for Nortel!, Nortel Flunks WiMax, Nortel Fleshes Out WiMax Strategy, and Nortel Wins CDMA Deal.)

In the first nine months of 2008, ended September 30, Nortel reported CDMA solutions revenues of $1.4 billion, and GSM and UMTS solutions revenues of $1.2 billion. But those revenues are shrinking as the vendor's third-quarter results showed. Third-quarter CDMA revenues were down 29 percent year-on-year to $423 million. And GSM and UMTS revenues were down 13 percent year-on-year to $297 million. (See Crunch Time for Nortel and Nortel Culls 1,300 Jobs, Loses $3.4B.)

Perhaps it's too early to speculate on how Nortel's wireless business emerges from the restructuring when the vendor first has to work out what to do with the whole company. (See Nortel Appoints EMEA Administrator, Nortel for the Long Jump?, Spooky Nortel Anagram, Nortel Files for Bankruptcy Protection, and Should Nortel Be Sold for Parts?)

The poll is still open, so click here to cast your vote and see the results.

— Michelle Donegan, European Editor, Unstrung

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