Nortel Hushes on LG Deal

Canadian vendor Nortel Networks Ltd. (NYSE/Toronto: NT) is keeping its spokeslips firmly sealed on speculation surrounding an imminent joint venture with Korean CDMA network vendor LG Electronics Inc. (London: LGLD; Korea: 6657.KS).

Media reports suggest LG is eager to spin off its telecom network division via a partnership deal with Nortel before the end of this year.

“The alliance has not been completely finalized, but we are negotiating with Nortel in good faith,” says an LG spokesperson, according to The Korea Times. “Tangible results like a memorandum of understanding will be possible later this year.”

Nortel’s official line is less effusive. “Nortel Networks cannot comment on market rumors and speculation,” declares a company spokeswoman.

To date LG has achieved limited success in the wireless infrastructure market. It scored a high-profile international win with EV-DO carrier Monet Mobile Networks Inc., before the U.S. service provider was forced to file for Chapter 11 bankruptcy protection earlier this year (see Monet Closes EV-DO Network). LG is now left with a handful of customers in Korea and emerging markets.

Analysts believe the vendor is in need of a severe shakeup. “LGE’s marketing and messaging around wireless infrastructure is almost non-existent,” writes Current Analysis’s Peter Jarich in a recent report. “LGE should take a page from UTStarcom and develop broader international channels for its wireless infrastructure business.”

— Justin Springham, Senior Editor, Europe, Unstrung

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