The Nortel Breakup Continues

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

A purchase would give Nokia Siemens entry into the U.S. market, something Nokia Siemens is pursuing.

The dismantling of Nortel, once Canada’s largest company in terms of stock market value, represents an inglorious end for the firm, and will rearrange not only market share rankings but the competitive landscape. Other firms once in Nortel’s shadow, 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.

For Nokia Siemens, gaining Nortel’s installed base of North American customers would be a huge step, immediately sending 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.

Nortel’s enterprise unit has had bids from traditional competitors Avaya, and Siemens Enterprise Communications.

Nortel has already sold parts of its application delivery business to Radware.

Ian