Ericsson Wins Auction for Nortel’s Wireless Division

11:10 pm on July 25, 2009 | Category: Business, Cellular, Corporate, Wireless Technology

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Swedish telecom equipment giant, Ericsson, emerged victorious in yesterday’s auction for Nortel’s flagship wireless division, bidding $1.13 billion for the bankrupt firm.

Ericsson will assume ownership of Nortel’s CDMA assets, as well as intellectual property related to Long Term Evolution (LTE) technology, putting it in a strong competitive position as wireless carriers around the world plan to adopt the new 4G technology.

“This is both a sad story for Nortel and a happy story for Ericsson,” wrote independent telecom analyst, Jeff Kagan, in a note to clients. “Rather than competing with Nortel, Ericsson has won.”

Ericsson’s successful bid virtually guarantees that Nortel will be sold off in pieces, rather than emerging from bankruptcy protection as a single company.

“I believe this is the right outcome at this point in time,” said Nortel’s president of carrier operations, Richard Lowe, in an interview earlier today. “An orderly disposal of the assets of Nortel is the best outcome for the stakeholders.”

Nortel and Ericsson expect the deal to close sometime later this year.

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    Published by TeleClick Enterprises
    Edited by Jeremy Maddock