As much as Nortel is talking the talk about Wi-Max being a strategic priority, the big question – and one that is being asked by a growing number of people – is whether Nortel has a legitimate shot of becoming one of the leading Wi-Max suppliers. This issue has gained more momentum since Nortel was not among the suppliers selected to provide Sprint with equipment for its multi-billion dollar Wi-Max contract recently. Network World’s Jim Duffy has an interesting story in which he quotes CIBC analyst Itai Kidron, who says Nortel needs to become more aggressive and make some Wi-Max-related acquisitions or it needs to get out of the business and focus on areas where there is a better ROI opportunity.
“Nortel needs to still focus its strategy and narrow its business activities to a smaller number of opportunities which should be pursued more aggressively,†Kidron in a recent research report.
Stepping back, another question is what happens to Nortel’s wireless business if it doesn’t gain a lot of traction with Wi-Max. Nortel got out of the UMTS business last year when it sold the unit to Alcatel-Lucent; its CDMA business is a distant second to Alcatel-Lucent, and its GSM business has relatively minor market share. While CEO Mike Zafirovski has played it safe so far when it comes to acquisitions – not a bad strategy when you’re trying to restructure a $10-billion company – the time may come for him to make a bold move to get Nortel’s back in the game- be it wireless or another business.
Nortel is taking the Prince approach and doing WIMAX “like its 1999″. Except things have changed: Nortel is no longer a major vendor, the Chinese are involved, there are less customers, you cannot be late and get by with a superior product. Nortel cannot compete head to head in the current environment, and certainly not with a late product. Don’t go home, don’t go high, carve out a unique market niche.
Not Observer
I guess we are at the point where it doesn’t matter what Nortel does in the marketplace, there will always be complaints and criticisms regarding their actions. Just imagine the criticisms Nortel would face from this blog if they made the choice to avoid the WiMAX market.
Other than Sprint/Nextel I have yet to see any other Tier-1 Carrier anywhere in the world begin the adoption of WiMAX. There are a few key reasons for this such as;
1 – These carriers do not want to cannibalize their existing revenue streams in high-speed access and mobility solutions.
2 – Some of these carriers, such as Telus in Canada, do not even have rights to 4G/WiMAX spectrum.
The WiMAX market is beginning much like the CLEC market back in the late 90s. It’s the new competitive carriers that can create a market differentiation with a WiMAX service, application and content offer. One of the leading WiMAX applications is for Municipal Services. These competitive providers have first-mover advantage in this market compared to the traditional Tier-1 Carriers.
Sprint made the decision to use vendors that have both infrastructure and consumer device components. Nortel today does not direct own consumer devices. Instead they have device relationships with Kyocera and LG etc. Once Intel produces and embeds WiMAX Radio Chips into their product offerings, the need to consumer devices is going to decline.
Tier-1 Carriers with CDMA and/or GSM networks will also need to consider a migration to CDMA-Rev. C or GSM/UMTS-LTE as their 4G alternative. Nortel is active in both markets with important patents for these markets.
At least Nortel is bold enough and smart enough to recognize a market opportunity.
It was only 6 weeks ago that your buddy Apple suggested right on this blog that WiMAX wouldn’t be seen until 2010. Now we know that that was a false and misleading statement.
The psychiatrist
good insight not observer
apple along with observer are paid bashers from over on the yahoo NT board,his 24/7 is the dead giveaway,where gross inaccuracies are the norm.
touche
Observer
There are no such things as paid bashers, yet you pump with a relentless interest like the clever ID post above totally neglecting Samsung in the grand scheme of things.
You feel this provides “good insight” into WiMax where even Sprint mooned them like BT using anyone but them. CDMA is set to take a major hit in 2008 that accounts for 80-90% of their current EBT, expect ALA+LU to come out wotht their own WiMax, as Nortel sinks deeper into the abyss, we see the trend, outlook, who you Nortel-holic cheerleaders trying to fool here?
Who’s been right over the last 3 years, proven critics or unethical cheerleaders with suspect vested interest all the way down?
Nortel has nothing, like your false accusations with a vested interest and many stalking IDs.
Wi-Max: Should Nortel Go Home or Go High?
As much as Nortel is talking the talk about Wi-Max being a strategic priority, the big question – and one that is being asked by a growing number of people – is whether Nortel has a legitimate shot of becoming one of the leading Wi-Max suppliers. This issue has gained more momentum since Nortel was not among the suppliers selected to provide Sprint with equipment for its multi-billion dollar Wi-Max contract recently. Network World’s Jim Duffy has an interesting story in which he quotes CIBC analyst Itai Kidron, who says Nortel needs to become more aggressive and make some Wi-Max-related acquisitions or it needs to get out of the business and focus on areas where there is a better ROI opportunity.
“Nortel needs to still focus its strategy and narrow its business activities to a smaller number of opportunities which should be pursued more aggressively,†Kidron in a recent research report.
Stepping back, another question is what happens to Nortel’s wireless business if it doesn’t gain a lot of traction with Wi-Max. Nortel got out of the UMTS business last year when it sold the unit to Alcatel-Lucent; its CDMA business is a distant second to Alcatel-Lucent, and its GSM business has relatively minor market share. While CEO Mike Zafirovski has played it safe so far when it comes to acquisitions – not a bad strategy when you’re trying to restructure a $10-billion company – the time may come for him to make a bold move to get Nortel’s back in the game- be it wireless or another business.