Nortel Networks Agrees to Sell CDMA Business and LTE Assets to Nokia Siemens

In a deal worth $650 million, Nortel Networks has agreed to sell its CDMA business and LTE assets to Nokia Siemens Networks, a move that would definitely increase Nokia’s presence in North America. There have been some positive reactions to this latest development in the inudstry, executives from Verizon, Sprint, and Bell Mobility have expressed their satisfaction in statements that the agreement is good news for wireless technology on the continent.
As the world’s second largest supplier of CDMA infrastructure, Nortel provides the 4G infrastructure products to three of the five top CDMA global operators, including Verizon Wireless. With the CDMA unit earning an  stimated $700 million a year, Nokia Siemens stands to earn its investment back in slightly more than a year.

The purchase of Nortel’s CDMA operation should help Nokia as it seeks to ramp up its handset sales in North America, where it has lagged in market share. Nokia dominates handset sales globally, accounting for more than the next three suppliers combined. Its presence, however, is not as strong in smartphones, and the CDMA unit — along with some Nortel R&D – could give it an advantage in some smartphone markets.
In the meantime, Nortel has filed for Chapter 11 bankruptcy protection. The transaction is subject to approval by U.S. and Canadian courts and should be heard in both countries at the end of this month.