Nortel Keeps LTE Dream Alive

Nortel Networks Ltd. is hanging on to its aspirations to be a player in next-generation mobile broadband technology Long-Term Evolution (LTE), Unstrung has learned.

After filing for Chapter 11 bankruptcy creditor protection and exiting the mobile WiMax market last month, Nortel has pinned its wireless hopes on LTE. The Canadian vendor says it is intent on finding a partner for its LTE program and keeping its other wireless assets in GSM and CDMA. (See Nortel Files for Bankruptcy Protection, Nortel Kills Mobile WiMax Biz, and Nortel: Bye, WiMax.)

And the new plan could possibly involve the Metro Ethernet Networks (MEN) business that the company has been trying to sell since September last year. (See Nortel to Sell Carrier Ethernet, Optical Biz.)

Richard Lowe, Nortel's president of carrier networks, tells Unstrung that the vendor is seeking LTE partners.

"With LTE, no doubt there's a significant investment," he says. "We continue to look for ways to improve our leverage… also, to leverage my MEN business for backhaul. We'll continue to seek partnerships."

So, the strategy to "de-risk" the investment in LTE that CEO Mike Zafirovski announced in September has not changed since Nortel started its restructuring process. (See Nortel 4G Plans Up in the Air.)

"My plan is to cultivate those partnerships, get a green light and move forward," he says. "[We want] a credible plan with appropriate partner support… Everyone is looking for ways to de-risk the investment for LTE."

But Lowe would not specify what size or shape such a partnership might take. He pointed to the vendor's relationship with Hitachi Ltd. (NYSE: HIT; Paris: PHA) in Japan, where the two companies have teamed to develop and deliver Evolved Packet Core equipment for KDDI Corp. 's LTE network. (See Nortel Snares LTE Core Deal.)

"We're not precluding structural alliances, but I can't comment or be more specific," he says. [Ed. note: I don't know what a structural alliance is either.]

On its own, Nortel is one of the six vendors Verizon Wireless and Vodafone Group plc (NYSE: VOD) have selected for their joint LTE trial. (See Verizon Goes LTE and Huawei Joins Vodafone LTE Trial.)

Lowe says Nortel is responding to requests for proposal (RFPs) for LTE at AT&T Inc. (NYSE: T) and T-Mobile International AG . According to Lowe, AT&T issued an RFP for LTE base stations and access gateways before the Christmas holiday.

An AT&T spokeswoman told Unstrung in an email reply that the operator doesn't comment on such matters, and a T-Mobile spokesperson could not be reached as this article was published.

And at the Mobile World Congress in Barcelona later this month, T-Mobile will use Nortel equipment for its live LTE demo. (See Good News for Nortel! and T-Mobile Beefs Up LTE Plans.)

Nortel wants to stay in wireless
According to an Unstrung reader poll about Nortel's wireless future, Huawei Technologies Co. Ltd. is seen as the likely buyer of Nortel's wireless business, but not by a large margin. 29 percent of respondents said Huawei is the likeliest buyer, while 21 percent said no one would buy the business, and another 21 percent said the buyer was most likely to be a company other than Huawei, Alcatel-Lucent (NYSE: ALU), Motorola Inc. (NYSE: MOT), NEC Corp. (Tokyo: 6701), Nokia Siemens Networks , or ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763).

But that's not how Lowe sees it:

"Our wireless asset remains a key part of our carrier customer base. We have a good position in CDMA; we're continuing to do business in GSM and UMTS core. But both businesses are relatively flat. Our intent is to continue to leverage our wireless installed bases and invest in LTE."

That's the intent.

And if Nortel can't find the appropriate LTE partners? Well, Lowe says that would be a conversation for another day.

— Michelle Donegan, European Editor, Unstrung