Nortel’s Forgotten Business: GSM

By Mark Evans | Published: September 28, 2009

For all the attention on Nortel’s CDMA business, which was sold to Ericsson for $1.3-billion, most people are probably unaware that Nortel still has a GSM wireless business that had sales of $377-million during the first-half of the year.

Given that GSM has supplanted CDMA has the technology for most wireless carriers around the world, it will be interesting to see how much interest Nortel attracts for its GSM business, which was split off from the CDMA business earlier this year.

For all the talk about Nortel’s LTE patents, which could play a leading role in next-generation wireless networks, the GSM business is Nortel’s bastard child that gets no love and little attention.


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  • fishymcdonk

    The GSM business makes terrible General Tao chicken

  • TongueInCheek

    Perhaps someone from Nortel EMEA can offer more information.

    Source: Bloomberg – Nortel Wins Three-Month Delay for French Unit’s Sale (Update1), Aug 20.

    Aug. 20 (Bloomberg) — Nortel Networks Corp., the insolvent Canadian telephone equipment maker, won an extra three months from a court to find a buyer for its French research and development unit.

    The commercial court in Versailles, near Paris, approved a request by Michel Clement, general manager for Nortel’s French operations, for a one-time extension to Nov. 20, the company said today.

    “Within this new extended mandate, we will be able to at least get a secure offer for the business,” said Isabelle Tadmoury, a Nortel spokeswoman in France. Discussions are “advancing” with “multiple” possible buyers, she said, declining to name the interested parties.

    …. paragraphs omitted …

    Discussions concerning the French unit’s sale focus on its GSM, or global system for mobile communications, business. GSM is used in most of the rest of the world.

    Since this is a France based entity, North American auction procedures do not apply.

  • zeroman

    Money losing. Old technology. French labor laws. Who would want this mess.

  • Thieum

    The laid off 500 of the 700 french employees, so french labor laws is no longer an issue. Plus I may add they were much higher quality employees than their North America counterparts

  • NortelTragedy

    C'mon now, no need to get personal. Take a vacation, you surely get enough of it.

  • Thieum

    I haven't worked for Nortel for a long time and I do not work in France that is why I have to experience the lack of competency on this side of the Atlantic

  • rubdab

    Yeh, Nortel put over $4B into the UMTS in France and the frog fu***rs were not even able to sell this sh** in France.

  • bolombo

    Well, I just heard there are ongoing negotiations about the GSM unit. Not because of GSM itself because Nortel has got 5% of the GSM worldwide market but that is why because Nortel is market leader in GSM-R.
    So I would not be surprised if NSN would buy it because they are in the in 2nd place in GSM-R market.

  • felixmk

    Yea, pretty pathetic. None of the French operators would buy Nortel's designed-in-France UMTS gear. Luckily Alcatel was dumb enough to buy the product line from Nortel.

  • sauerkraut

    They were not dumb at all. In fact Alcatel-Lucent is replacing the Alcatel and also the Lucent UMTS gear in the field with the bought Nortel UMTS equipment.
    Also true: right after Nortel sold it to Alcatel, operators were asking for and buying the former Nortel UMTS gear which probably is the best in the field as of today. It wasn't the equipment they didn't want to buy but the company Nortel which they didn't trust. European Telcos were alarmed by the financial situation of Nortel and warned that this company might not exist anymore in a few years.
    Damn right!

  • felixmk

    I guess that's why ALU is in the top 3 in UMTS gear…NOT.

  • rubdab

    For $4B in R&D, it better be the best equipment available.
    By the way, the UMTS spending was the beginning of Nortel's end.

  • Teleguy

    They are afraid of the French employees. Given the fact that they've threatened to blow up their workplace and God knows what else, who wants to deal with them?? Nortel has enough headaches without that crap to deal with.

  • less

    Our bomb threats were so beyond sissy. Some cowboys we are.

  • nortelex

    You are absolutely right. These smart Frenchies work 30 hrs/week with 2 hrs lunch break band 2 months summer vacation…very smart.

  • exnortelpeon

    Don't worry Graham and his cronies will save the GSM business. Graham is pretty much just a bean counter who was lucky enough, or should I say Canadian enough, to land the job of GM.

  • sauerkraut

    That's the reason why Nortel never made it as a global company: a conplete lack of understanding of the Asian and European market and culture.
    The French employees were forced to do what they did because Nortel behave like the Neanderthal man. They simply faught for their rights.
    And in the rest of the world this is understood.

  • timbuktu

    Not Likely as this would leave NSN with 95% marketshare.
    GSM-R is a niche market – Lets see how it goes.

  • PeopleAreOurStrength

    Yep… You are damn right…. And US/Canadian Nortel brass were soooo good at keeping the Nortel GSM footprint in CANADA, the Nortel homeland (Nortel access+core gear was eventually miserably ripped by E/// in Microcell/Rogers “Fido” network, if I am not mistaken). And what about Nortel CDMA footprint in Canada ? Not so sure Nortel can be proud of its business over there…
    At least the so-called “frog fu**ers” have been able to gain and protect over many years a very significant market share of the wireless french market, for both GSM (FT/Orange & Bouygues Telecom; + also the GSM-R contract with french railways) and also more recently UMTS (ALU providing Nortel-designed UTRAN to Orange, and to SFR – the Vodafone french arm).
    Please stop the usual French bashing, and try to be honest and unbiased, ok?

  • bssgsm

    TRUE!

  • Teleguy

    Nortel understood Euopean and Asian culture just fine, since many of their workers even in North America were from those parts of the world. Nothing wrong with fighting for your rights, but there is something wrong with threats of violence. And it was only in France that they did this – U.K. workers protested without threats of violence; same in Germany. Nortel should not have gone into France and I hope the new owners stay out of France.

  • felixmk

    Lets talk about the BSCE3. This product, a key component of the GSM product line, was **3 years late**. It was developed in France and was handled as a “Science Project”. The software had to be completely re-written from scratch because the first iteration was an unmaintainable poorly written buggy disaster. The delays resulted in Nortel being tossed out of BellSouth/Cingular, losing Voicestream/TMO market share, lost opportunities in Asiai, cost $100M in wasted R&D, and generally messed up the GSM business from 1999-2003. The loss of key market share when the US operators moved from TDMA to GSM during this period was costly. What is left of GSM business is what was salvaged between 2003 and 2008 by Graham and others.

  • unknownPath

    the only reason we couldn't employ the same tactics is we would be arrested as terrorists and prosecuted. North America is too “homeland security” happy for an utter of a threat even if there isn't nothing to back it up.

  • grindstone

    Wow, nice to see that there's a rational discussion going on and no finger pointing. Oh, wait.

    There were problems on both sides of the Atlantic, but once we fell behind with GSM Access, as felixmk points out, we lost any foothold we had. That just leaves GSM core and GSM-R — which share practically nothing and would be attractive to buyers for different reasons. GSM is just another example of Nortel's exec's jumping into the water but not committing to the swim.

  • Byebye

    Agreed the BSC E3 was a disaster, I think part of the reason is that Nortel at that time focused on UMTS. They ended up losing on both fronts, in GSM in North America as they lost Cingular and upset T-Mobile and had no chance for any UMTS contract (except that they had won AT&T Wireless but when Cingular bought it they had written off Nortel, I actually heard that hatred for Nortel at Cingular dated from the TDMA days). Then TMO did not want them for UMTS because there were so many issues with the product and support.
    In Europe they maintained only a few UMTS customer and had to sell to Alcatel-Lucent. I think the French management made mistake and so did the North American one that is for sure, otherwise the company would not be there. It started with the $7Billion to buy Bay Networks and other funky aquisitions from Mr John Roth

  • rubdab

    Sure, even BSNL that got $500 million discount (free GSM gear) couldn’t afford to run this crap and had to replace it later on with Ericsson gear.
    North American companies like Rogers, and AT&T would not be able to put up with something that never worked.
    GSM/UMTS sales were always peanuts when compared to the R&D spending in France.

  • felixmk

    Agree. Remember when Frank Plastina went to France and gave a big speech about UMTS being the next big thing to all the employees? No one wanted to work on GSM anymore so they left the BSCE3 to a few leftover employees and a bunch of incompetent contractors.

  • exnt_x_2

    Thieum is right, overall. There was a big difference between the French engineers in France and the N.A./Asian/Other engineers in N.A. The French have a better educational system overall.

  • timbuktu

    I have worked in France and can't recall what you say. Typically I would start at 9 am and finish around 8 pm – The lunch break some days did extend to 40 min. but usually stayed within the 30 min. which I believe is also common in US.

    Officially France have 37½ hour working per week + 2½ hour extra work per week wich accumulated over a year adds 3 vacation weeks on top of the standard 5 European vacation weeks.

    The reality is that most people in France work more than 40 hours per week – Most of my friends work at least 50 hours per week.

  • jazzymofo

    It's been announced that GSM/GSM-R will be sold via “open auction”;

    http://online.wsj.com/article/BT-CO-20090930-71…

    Note that in an open auction, the bidders are not revealed prior to bidding, like with stalking horse. Maybe NSN doesn't want E/// sneaking up on it?

  • NTRTP1

    One of the things that most people don't know is that when you take all of the financials involved with the Chateaufort site — real estate, salaries, benefits, etc. & weigh those against the revenue streams & R&D allocations that can be attributed to it, the site was hemorrhaging money every single day it's open. For years they've been trying to reduce the site, lessen the amount done there, to eventually close it down… but due to the way the French (and EU) labor laws are written it was always cost prohibitive.

  • NTRTP1

    One of the things that most people don't know is that when you take all of the financials involved with the Chateaufort site — real estate, salaries, benefits, etc. & weigh those against the revenue streams & R&D allocations that can be attributed to it, the site was hemorrhaging money every single day it's open. For years they've been trying to reduce the site, lessen the amount done there, to eventually close it down… but due to the way the French (and EU) labor laws are written it was always cost prohibitive.

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