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Breaking: Ericsson bids $730mm for Nortel’s CDMA, LTE assets

Ericsson has finally entered the Nortel fray, announcing their starting bid at $730 million for bankrupt vendor’s LTE and CDMA asset a day before the official auction is held. It will now be (at least) a three-horse race between Nokia Siemens Networks (NSN), private equity firm MatlinPatterson and Ericsson. While MatlinPatterson will likely bow out early, both equipment vendors have a lot to gain, particularly as they try to position themselves to win Verizon’s lucrative LTE business.

“There’s synergies, there’s scale, and both of them are part of the Verizon network to move to LTE,” said Akshay Sharma, research director at Gartner. He said both companies would benefit from being able to offer Verizon a smoother upgrade path to LTE, which could win some business from Alcatel-Lucent which already has as a strong advantage when it comes to LTE deployments.

According to the Wall Street Journal, Ericsson could be quite serious about capturing that advantage. “We are pursuing the deal because it seems to be an interesting opportunity and we are always looking for ways to create value for Ericsson,” the paper quoted a Ericsson statement, adding “we will pursue this opportunity to the point it makes sense.”

Further Reading:

• Nortel wireless fire sale delivers North American footprint to NSN
More LTE vendors join the 4G party (but no cake for Nortel!)
• Will Verizon’s LTE rollout stumble over a little DoJ review?

Nortel wireless fire sale delivers North American footprint to NSN

Nortel’s wireless carrier network infrastructure division may bring in a paltry $650 million if the Nokia Siemens Networks (NSN) deal goes through. By all accounts, NSN — the joint venture of Nokia Corp and Siemens AG — will be getting a really good deal out of Nortel’s bankruptcy. The deal sets a low bar, according to The Wall Street Journal, which is pretty clear, considering Nortel was once valued at $250 billion.

NSN stands to gain Nortel’s CDMA and LTE assets. Nortel’s CDMA unit earned $700 million a year – and that was while it was in decline, according to WSJ. The big 4G LTE migration is supposed to start next year, and NSN is gathering firepower for that.

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