The Nokia-Nortel Deal That Should Have Happened

By Mark Evans | Published: July 6, 2009

With the spotlight on Nokia Siemens’ proposed $650-million bid for Nortel’s CDMA wireless business and LTE R&D unit, it’s interesting to note it was four years ago that Nokia and Nortel nearly entered into a wireless joint venture.

If the deal was had consummated, Nortel would have not only made a lot more money but it would have given Nortel the strategic focus and financial ammunition. Instead, the Nokia-Nortel JV was cast aside from then-CEO Bill Owens and the board.

In any event, here’s how the deal would have gone down:

JV 1: GSM/UMTS


•Nortel exits G/U RAN business
•Nokia provides all GSM/UMTS RAN technology / products

•Nokia assumes control of Nortel’s G / U development facilities in France
•Nortel provides Gateways/Voice Call Center platforms
•Nortel becomes CDMA product supplier to Nokia
•Nortel receives substantial compensation / ‘buy out’ from Nokia

JV 2: CMS/ HLR Development

•Develop ‘joint’ CMS and HLR platforms
•Nortel puts platforms/personnel into JV

Device Technology Partnership

•Nortel provides technology under license to Nokia for its Dual Mode Devices


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  • Moose_Chaser

    Who CARES ?!!

    If this blog is now just about “coulda-woulda-shoulda”, then it is
    time to shut it down !!

    MC

  • horace_grimswold

    Respectfully disagree. If the Bored & CEO gets egg on its face as a consequence of Mark's research & investigation, more power to him.

  • less

    “Those who cannot remember the past are condemned to repeat it”
    …or, no, was it….
    “Those who forget history are doomed to repeat it”

    I forget… but, wait, I do remember one thing:

    “There's a sucker born every minute.” And Nortel has banked on this fact for a while now, and to historic heights. History, unfortunately, has misdirected the above quotation. Barnum never did say it. Actually, it was said by his competitor.

    I'm not sure why this old story is even on the Internt anymore:

    http://www.historybuff.com/library/refbarnum.html

  • protosphere

    So much for being “the acquirer and not the acquiree”

    There is the possibility today that Nortel can trade their debt for an equity stake by an investment firm to keep Nortel an going concern. We will know by June 24th if this will be entertained.

    Being cursed with Murphy's Law over the years, NSN will probably acquire them, not able to have sold assets earlier, and after dumping UMTS.

    Interesting many still see value when they couldn't juggle strategy or forecasts over the last half decade.

  • TongueInCheek

    Digging up old information for the purpose of being critical against Nortel and their executives is an effective business model. This business model drives increased traffic which generates more advertising revenues. This blog is part of a business and every business needs revenues. I highly doubt this blog is a public service.

    We could always go back 68 years to when Northern Electric made military supplies and create all sorts of negative comments to drive more traffic and revenues.

  • brett5

    If the debt to equity option isn't going to be considered until July 24, then we won't hear of a stalking horse for any of the other pieces of business until then either, right?

  • bulletproof

    News from France: strike is declared in Chateaufort (concerns about social plan).

  • AnotherSlave

    I thought they were all laid off?

  • less

    I must all strive better to emulate the visionary Mike Z's business model, which took Nortel's reins and never looked back, focusing instead on them, uh, 12-18 months ahead.

    The world is rushing to embrace mobile communications, but some of the biggest suppliers of telecommunications equipment are struggling to stay ahead.

    For Nortel Networks Corp., survival is no longer even an issue. The company has agreed to sell its lucrative wireless business for $650-million (U.S.) to Nokia Siemens Networks, and is in late-stage negotiations to sell its corporate networks unit to another firm, most likely Avaya Inc. In the months ahead, a group of several dozen executives, lawyers and accountants will preside over a transition services group to dispose of Nortel's last asset. Creditors will be left to fight over the financial remains.

    http://www.theglobeandmail.com/report-on-busine…

  • less

    We could also wait for a Z-mail with investment money in hand, ready to invest wisely based on the master's hard, objective data.

    Sho nuff. Nortel stock has surged +15% since you posted:

    $0.08

    Change +0.01 +15.38%

    Volume 9.17m

    Jul 6, 2009 1:16 p.m.

    Quotes are delayed by 20 min

  • oz_ex_nt

    Coulda, Woulda, Shoulda – DIDN'T………fact

  • A_Peon

    not yet.
    the Nortel plan is to liquidate the french entity to have the government pay for the legal severance and have a new lighter organization that is going to be more attractive for the potential buyers. this way the money of the sale will not go the the laid off employees but back to execs for more bonus.
    we are just trying to fight the company not to be part of their plan

  • protosphere

    I dunno… I guess they would have to trump the stalking horse bid and allow NSN to come back with one higher, then the other people's money they are gambling with would have to in turn agree to trump NSN's second bid too is it went that far… not sure but I can't see them convincing others to invest for NSN to have top raise their bid. I may be wrong but that's a lot of cash to pay debtors to take on a risk.

  • JlouisMeneghetti

    Not completely exact. The Governement agency should pay the severance indemnities, for sure, but it expects to get its money back thanks to the sale of Nortel Networks SA (my company… sob…). The money of the sale shall go to this agency first, then for creditors in France, possibly if there is some euros left to the ex-employees. I do not expect this money going out of France.

  • JlouisMeneghetti

    Not completely exact. The Governement agency should pay the severance indemnities, for sure, but it expects to get its money back thanks to the sale of Nortel Networks SA (my company… sob…). The money of the sale shall go to this agency first, then for creditors in France, possibly if there is some euros left to the ex-employees. I do not expect this money going out of France.

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