Uncommon Wisdom

Nov 18 2009   2:09PM GMT

Bidding for Nortel’s Ethernet assets highlights NSN’s needs

Tom Nolle Tom Nolle Profile: Tom Nolle

Yesterday was the final date for the submission of bids for Nortel’s metro Ethernet assets. Financial analysts are generally saying that the deal would be favorable for Ciena at its straw-man bid price, but of course the favorable outcome demands it getting the bid.

Nortel, whose latest quarter showed more bloodletting, is in the process of self-dismemberment down to a minimalist piece nobody can quite identify yet. NSN is also widely expected to bid for the unit to rekindle its chances in North America, where rival Ericsson’s win of the Nortel wireless unit has given it a leg up. The Ericsson CEO did a bit of crowing over its position in North America, in fact.

With Alcatel-Lucent winning many of the AT&T procurement zones and Ericsson strong in wireless, NSN needs to get effective in a hurry. We don’t think that the Nortel deal will do enough; NSN should look to broader M&A and strategy changes quickly.

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