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Nokia Siemens Networks Bids for Nortel

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April 08, 2009

Nokia Siemens Networks Bids for Nortel

By Gary Kim, Contributing Editor

Nokia Siemens Networks, the world’s second-largest supplier of communications infrastructure, reportedly has offered to buy large pieces of Nortel Networks Corp., including much of its profitable carrier networks unit.

A purchase would give Nokia Siemens (News - Alert) immediate entry into the U.S. market, something Nokia Siemens preently is pursuing. Though a global competitor in the top ranks, Nokia Siemens has had less share in the U.S. market.
The dismantling of Nortel (News - Alert), once Canada’s largest company in terms of stock market value, represents an inglorious end for a firm that once played Avis to Lucent’s Hertz in the U.S. telecom market, and will rearrange not only market share rankings but the competitive landscape. Other firms once in Nortel’s shadow, such as MetaSwitch (News - Alert), now have a chance to assert new levels of leadership. In recent years, MetaSwitch sales people have faced Nortel as a primary competitor for new softswitch contracts.
At the very least, there will be an integration period where potential customers will have hesitations about the new Nokia Siemens, potentail changes of product roadmap, support and personnel. Sonus also likely faces a changed competitive landscape, and for many of the same reasons. At least temporarily, greater risk will be associated with any new commitments to former-Nortel platforms.
Still, for Nokia Siemens, gaining Nortel’s installed base of North American customers would be a huge step, immediately vaulting Nokia Siemens into a key role at hundreds of companies that use Nortel Class 5 switches, and making Nokia Siemens a major player in the U.S. carrier market, overnight.
Separately, Nortel’s enterprise unit has gotten bids from traditional competitors Avaya (News - Alert) Inc. and Siemens Enterprise Communications.
Nortel has sold parts of its application delivery business to Radware.
It is yet one more clear sign of the “end of the world as we know it.”

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Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Michael Dinan

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