Nortel Bails Out of Wi-Max

Not a surprise to me.

I'm sorry but who is going to have the BILLIONs required and the willingness to take on a new unproven tech such as WiMax? Rolling out a new network requires access to easy credit which isn't out there anymore.

I knew trouble was ahead when Sprint pruned their $5 Billion WiMax Deal to $3 Bill to $ 1Bill then 0 and no one else wanted to do the same.

More showcasing the strategic wisdom of Mike Zero.

Who did the breaking up in this relationship? The company in bankruptcy, or the company that was being brought down due to its association with a bankrupt backstabber?

Can Nortel lay off employees from Alvarion?

Peter Mackinnon was the cancer in this business. Mackinnon was blowing smoke at Lowe and Zafirovski ever since he took over this business and they were not smart enough to see through it. Now Mackinnon is hiding as the “grand pooba” of the LGNT JV where he has no real responsibilities. He does love the job title. Mackinnon contiinues to travel back and forth to Korea first class avoiding Mike and distancing himself from the Wimax disaster. This is his mode of operation from screwing up wireless applications to screwing up UMTS/GSM to screwing up the Cingular account for Nortel. Mackinnon has a knack for blaming others for his disasters and fooling execs like Mike Z and Dennis Carey.

You think the LG NT Joint Venture will croak soon?

Hey, you're giving Cancer a bad name.

This Alvarion thing never worked…

What Lowe called a “partnership” was Nortel’s middle-man twisted vision of the perfect supply chain: add no value to your customer and still mark it up 30%.

Alvarion engineers were not eager at all in sharing any technical information and regularly missed meeting with Customers without any advance notice. When manufacturing orders had to be placed, it was a mess because Alvarion codes had to be translated (yeah, you read it right, translated) to the Nortel PEC codes.

So “bailing out of Wi-Max” means what? Absolutely nothing.

Sounds like the Mike I know; (must) tell him what he wants to hear…–bb

“We are taking rapid action to narrow our strategic focus to areas where we can drive maximum return on investment,” Richard Lowe, Nortel’s president of carrier networks said in a statement, adding that “Our continued success in the wireless business requires us to focus our energy on opportunities with long-standing customers. What he meant to say:
“We are doing whatever Mike Z wishes to strategically preserve cash so we can hang on in our senior exec positions as long as possible and position ourselves for the coming liquidation. We remain committed to making sure that senior toady execs get their $$ while pensioners, suppliers, stockholders, people on severance, and bondholders wait to see what's left”

Does this quote from the Illinois Senate sum up Nortel's leadership?
“During comments that preceded the vote, the Senate members condemned Blagojevich, variously calling him “devious,” “cynical,” “crass,” “corrupt,” “inept,” “a liar,” “a hypocrite” and “irresponsible.”"

Depends. Somewhere between 1-3K I suspect.

No, I don't know how restructuring would work unless we cleave off the top 3 layers of “management” and the board.

Old school … RL

Amid the happy talk of greater focus, investors may want to take note of the amended disclosure:

http://biz.yahoo.com/iw/090129/0470089.html

; the failure of Nortel to obtain the requisite approvals of affected creditors or the courts for any restructuring plan, or to successfully implement such a plan or obtain sufficient exit financing, if required, within the time granted by any court, which could result in substantially all of its debt obligations becoming immediately due and payable or subject to immediate acceleration, leading to the likely liquidation of the Applicants' assets; that Nortel's existing common shares and Nortel Networks Limited's existing preferred shares could have no material value in, and following the approval of, a restructuring plan and could be cancelled; and the potential that the TSX may suspend trading or delist any of Nortel's securities on or from the TSX as a result of the Insolvency Proceedings, and the impact of the NYSE's suspension and delisting.

_________________________________

As for WiMax, one of their largest customers, Sprint. selected an other for WiMax long ago. The writing was on the wall.

Same old good news / bad news press release, what's changed?

I wonder if this derisking may have been prompted by any bankruptcy implications with Alvarion?
“Our priority is to minimize the effect on customers,” said Tzvika Friedman, president and CEO, Alvarion. “We will work closely with Nortel to ensure that the transition will be as smooth as possible.”

Hard to tell thanks to bureaucratic name games. I figure at least a 1K because of the folks who transferred there from Global Ops/engineering and a few from R&D. I took a stab considering the additional 1-2K would come from sales and the Supply chain.

Until mid 08, WiMax had a lot of resources (money and manpower) poured into it. It was the hot spot where a lot of ambitious types wanted to join up thinking it was secure.

Also knowing how things work at NT, the Table of Organization for the “In” thing tends to bloat up with a lot of hangers on.

You left out: “In addition, having previously worked with President Obama highlights Mr. Blagojevich’s world-class experience, which will help to position Nortel as the dominant global player.” …– bb

is Airvana gone too?

From the email to employees:

“Today’s decision will have a very real impact on our WiMAX customers, our suppliers, our partners, and our employees. We have an opportunity throughout this process to demonstrate that even in the midst of so much change, we can still maintain our focus and professionalism. “

Nice to see employees rank as the least of Lowe's priorities here.

Here's a clue, management. You don't need to care about the employees. You don't even need to look as though you care. But you should look as though you're trying to look as if you care.

Big impact.. ha ha! EPIC FAIL!

They only had 3% of the market… and in statistics we'd call that “statistically irrelevant”, which is what the WiMAX business for Nortel is.

Next up, LTE. I have a gut feeling LTE will be the next “victim” of the restructuring. Real revenue generation on 4G is a long way off, especially with the recession going on. Best would be for them to spin the LTE guys out to someone who has market share and give them a chance to “swing for the fences” without Nortel holding them back.

Guys: Let's get real here. Unspin Lowe's yada-yada. The Wi-Max thing completely lost its purpose when the Sprint deal went south. It was also useful to the Nortel PR machine when 3G was dumped and Nortel “leaped” to 4G

So, in summary:
a) this is no news at all.
b) Alvarion interests were solely digging potential customers via Nortel sales force.

Does anybody disagree?

what happened to not disrupting NT customers and NT will still be committed to them – paraphrased from mr. Zero in his video on chap 11.

Bo. What are you trying to say? Is it: “Customers, don't worry. Nortel sill has a foot on the Wi-Max arena with .16d.”?

What about Lowe's statement “we are taking rapid action to narrow our strategic focus to areas where we can drive maximum return on investment”.

What Customer wins Nortel has with .16d and what are the strategic plans for the future to keep Airspan on board (and not Alvarion)?

Should Airspan also be worried that they might be dumped soon?

I'm not sure what message Nortel is trying to pass to the market. All I can perceive from my perspective is a dubious message.

Nortel has little credibility left. The market isn't listening anymore.

Bo – it looks like more Nortel dabbling to me. Still no clear strategy, still no beef. Just a bunch of seemingly unrelated efforts bumping along.

Bo–sorry dude, nobody cares…-bb

During the late 90’s I founded the first VC-backed WiMax company (Malibu Networks) and developed the first (lab only) working prototype of OFDM modem. We were early, I sold my shares to the VCs and two years later they closed shop.

So, I take my deep technology experience and market expertise to John Roese who gives me hyper-babble about mobile WiMax. I then sent Mr. Z. a 4-page report on WiMax and why Nortel’s strategy is deeply flawed (supporting only one technology before the market had even an opportunity to decide), in effect validating my earlier correctly-articulated points and his response (I quote): “Oh yeah, that was a mistake”. A MISTAKE!!!!???!? He bets the family farm on a ‘growth imperative’ supporting an idiot that could not tell wireless from clueless and the best he could say was ‘that was a mistake’. How many billions of potential revenues did that mistake cost Nortel we will never know. A mistake, my @$$; more like the deaf, dumb and blind leading the blind. Gotta know your $#!t or you’ll just end-up hurting people and their families. The WORST I Have EVER seen and that includes sugar-free Mac, John Scully…–bb