Application accelerators? VPNs? Nortel has faced many challenges overthe years, but its incredibly broad portfolio would be difficult forany company to keep straight. Here’s a handful of surprises
Nortel NetworksCorp., which filed for bankruptcy protection this week, makes hundredsof different voice and data products for both the carrier andenterprise markets. d
In the carrier space, it’s famous for its optical switches, wavelength division multiplexers and CDMA wireless base stations.
Inthe enterprise space, it’s best known for phones and private branchexchanges and has lately been touting its unified communications andcontact centre technologies. But that’s not all.
WATCH THE SLIDE SHOW: 5 products you didn’t know Nortel made
For more background, read below or check out our in-depth Nortel coverage.
Financially struggling
Nortel Networks filed for Chapter 11 in U.S. bankruptcy court Wednesday.
TheToronto-based company is seeking creditor protection in the U.S.,Canada and EMEA (Europe, the Middle East and Africa), it said in astatement.
Nortel gave “fullconsideration to the alternatives” to bankruptcy, but given the currenteconomic downturn decided that bankruptcy is in the company’s bestinterest long term.
Thetelecommunications equipment vendor will undertake “a comprehensivebusiness and financial restructuring” and expects to emerge from thebankruptcy process “more focused, financially sound and competitive.”
Nortelhad a US$107 million bond payment due Thursday. Last month, the NewYork Stock Exchange informed the company it would be delisted if itsshare price did not rise above the minimum $1 within six months. Nortelshares ended Tuesday on the NYSE trading at $0.32, with trading haltedWednesday in New York and Toronto in the wake of the bankruptcy filing.
All last year,Nortel tried to get a handle on its dire financial situation, includingseveral rounds of layoffs, attempts to sell its Metro Ethernet unit anda WiMax deal with Alvarion, but so far nothing seems to have helped.
“Insome sense it’s not a complete surprise. Nortel has been strugglingbecause of its heavy exposure to CDMA combined with the overalldownturn,” said Mike Roberts, principal analyst at Informa Telecoms& Media, referring to the company’s heavy investment in CodeDivision Multiple Access technology.
Nortelhas also never quite recovered from a financial meltdown around 2000,according to Roberts. Many telecom vendors are struggling.Alcatel-Lucent is also having a hard time, but it has more scale in theinfrastructure segment than Nortel and leads in some markets, Robertssaid.
Just asAlcatel and Lucent merged, that option is one possibility for Nortel,but how that might play out is hard to guess, according to Roberts.”There have always deals that have been worked on and kicked aroundinvolving Nortel,” said Roberts.
Partof Nortel’s business was linked with Huawei Technologies, and therehave been rumors regarding Nortel and Motorola’s network units pairingup, but that hasn’t transpired, according to Roberts.
Nortel hired lawyers late last year to consider filing for bankruptcy,but announced in December that it would stick with a cost-cutting planlaid out in November. However, financial analyst Nikos Theodosopoulosof UBS soon after in December said that a bankruptcy filing early thisyear could be the best plan for Nortel to pursue.
-with files from IDG News Service
