Telecom Timeout

Jul 23 2009   3:50PM GMT

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

WPeterson William Peterson Profile: WPeterson

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.”

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