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Nortel @ WiMax World
By Mark Evans | October 6, 2008
TD Securities analyst Chris Umiastowski’s faith in Nortel’s prospects disappeared when the company unveiled its intention to sell the metro Ethernet network business and reduced its revenue growth expectations.
So, it shouldn’t come a huge surprise that Umiastowski’s enthusiasm for Nortel at WiMax World last week was, at best, muted.
We did not see any significant changes from Nortel to excite us. They did demonstrate tight integration with Alvarion, but we are not convinced the
company’s momentum has changed. We understand why Nortel decided to abandon base station development by partnering with Alvarion. But given the supposed synergy that Nortel had between WiMAX and LTE, we wonder how long it will take the company to forma similar arrangement with an LTE partner.
Perhaps Motorola would be a good partner on LTE, but this could strain the Alvarion relationship since Motorola also competes with Alvarion in the WiMAX market. We are left feeling like Nortel’s next move in wireless is not obvious at all. We know they need to do something to de-risk their 4G investment strategy, but nothing jumps off the page at us as a clear winning strategy.
Update: While Umiastowski came away unimpressed with Nortel’s Wi-Max portfolio, Jeff Orr suggests Nortel is staging a Wi-Max rebound.
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