Comments on: Richards Bullish on Nortel’s China Prospects

By: less

less — Fri, 29 Aug 2008 17:38:44 +0000

I take this to mean that the Chinese better understand Canadian, i.e. global culture than the Americans?

In that vein: Nortel's sucking up to China is a pretty decent quick fix, but China is still a Commie country, which means that once they are up technologically to speed they could easily pull a Chavez and nationalize, say, Nortel's assets there – to stem the imperialist tide, of course – emulating Japan's modus to become tech leaders.

China has nothing to fear from Canadians, who are but tender world beat poets at heart.

By: less

less — Fri, 29 Aug 2008 13:38:44 +0000

I take this to mean that the Chinese better understand Canadian, i.e. global culture than the Americans?

China has nothing to fear from Canadians, who are but tender world beat poets at heart.

By: JoeFriday

JoeFriday — Fri, 29 Aug 2008 03:32:38 +0000

You can't count CDMA out yet.
Just because Nortel did not get anything off the bat with China means nothing.
Nortel has a massive R@D campus in Beijing, second only to Ottawa in terms
of importance and Nortel has moved alot of product and development (albeit limited
in terms of development) to China. You will see them highly rewarded in China.
That you can count on. They've invested alot and are in bed very much with the Chinese and will make huge gains. If they don't there is no reason for them to stay there. Alot of equipment Alcatel use in 3G is from Nortel. Anybody who thinks CDMA at Nortel is doomed is simply not with it, although they could probably trim some fat out of that organization in North America anyway.
Selling UTMS was not a mistake. Even though they only got 300 million, they desperately needed the cash and could not really float UTMS due to budgeting and fiscal problems created by the accounting fiasco. They really had no choice at the time. When you don't have deep pockets like Cisco what can you do. At the time Alcatel was deep also, but they have big problems now due to their merger.
They have got to hack alot of people, most likely in North America.

By: protospherical1

protospherical1 — Fri, 29 Aug 2008 00:47:14 +0000

"China Unicom, for example, said earlier this month it could invest as much as $14.6 billion (100 billion yuan) over the next two years to build a 3G wireless, while China Telecom plans to spend $11.7 billion."

This demand for $26.3B in spending begs the question who will get the business.

Given Huawei and ZTE won most of a recent CDMA order in their own backyards, it is interesting to note Alcatel was selected than Nortel's given CDMA is Nortel's highest earnings business with plenty of room to perhaps reduce margins should it have been price sensitive. Was Alcatel more cost competitive or did having 3G offerings play a role, or both?

This reminds me of BT that initially used everyone except Nortel in its $19B tender, Nortel claimed it had no product for., They cannot say that this time with CDMA?

The last large order Nortel got was years ago and it lost many millions with BSNL during their single digit revenue year of $9.8B. Revenues are important for Nortel, we see them move money into Q406 to make 2006 numbers, buying PEC which is worth less than half now, LG, etc., to more recent legally deferred revenues we can not peg a cost with....

They strive to maintain revenues where i anticipate selling 3G/UMTS for around #300 million may come as somewhat of a blow and bad decision when considering the customer migration to 4G from their now boasted LTE after killing long boasted WiMax. There's also long boasted Neptune, Putian and endless other past aspirations let alone billions of dolalrs in in past acquisitions that do little to boost confidence or credibility. I guess the barely $3B in cash today sounds better than the $2B something after selling so may billions in paper and assets with their costs. This is where I, as well as potential customers and Alzman's score, question will they be around to sell anything in the not too distant future.

I suggest this analyst should re-examine the multiple he is claiming now trading at 50ish cents presplit and making new 52 week lows before perhaps seeking employment elsewhere. I still remember Genovese or Mike's 20 buck buying opportunity last year, to average down at 7... and now 5ish?

If Nortel out of anyone did not get any of this CDMA Asian business now, given it accounts for 80 to 90% of their EBT, how can we expect them to get anything later?

$26 billion is not peanuts, and this analyst has every reason to be excited, if it wasn't for overlooking what Nortel can sell and will sell into this market., The trend is not their friend and there are sadly no miracles looming on the horizon.