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Nortel-Huawei Joint Venture
By Mark Evans | February 1, 2006
Now, this is interesting news: Nortel and Huawei have signed an MOU to create a joint venture that will develop ultra-fast broadband technology. Nortel will bring its voice and broadband networking expertise, while Huawei will supply its broadband access technology (and presumably low-labour) to create products that will carry voice, video, data and wireless data to business and residential customers on one IP platform. The JV will be majority-owned by Nortel and headquartered in Ottawa. Joint development work has already started even though the JV won’t be finalized until Q3. If deal makes a lot of sense if you look at how Huawei has made such strong inroads in the telecom equipment market with low costs and attractive financing plans provided by the Chinese government. Instead of continuing to go head-to-head, Nortel CEO Mike Zafirovski has decided join ‘em rather than fight ‘em. If this deal - and similar JV deals such as the one with LG in South Korea - is what it takes for Nortel to thrive within the current competitve landscape, then JV away, Mr. Z. Telephony Online and The Street.com’s Scott Moritz offer up their takes on the deal. Here’s what TD Securities Chris Umiastowski said about the deal: “We think it makes a lot of sense for Nortel to partner with the world’s most relevant Chinese competitor for broadband gear. Nortel wants to win its way back into the broadband access market and Huawei would like to increase its global sales.”
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Topics: Rivals, Technology |
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