Summary
1. With talks apparently going on between Verizon Wireless and Nokia about an LTE device agreement, the latter could be very interested in further bolstering its negotiating position with the former through a buyout of Nortel’s wireless product line. 2. There is no doubt that Verizon wants a supplier that it can count on to further support and upgrade its 3G EV-DO network. 3. There can be little argument that Nortel would receive “a lot more value [this way] rather than emerging.”
Analysis
Nortel really does not have a choice. Its brand name means almost nothing at this point. Nortel will be able to rehabilitate itself a lot more effectively with only one or two core businesses.
Back in 2007, Nokia Siemens made a concerted effort to have stronger ties with Verizon Wireless. Early this year it was reported by MarketWatch that the vendor was confident about significantly increasing its business in the U.S. Weakened competition was mentioned as a primary reason. The supplier was recently awarded with a contract for IMS from Verizon.
Gaining Nortel’s core wireless-gear business would help it to expand internationally as well.
