Ericsson trumps Nokia Siemens offer for Nortel wireless

Ericsson has trumped Nokia Siemens Networks’ $650 million bid for Nortel’s wireless equipment unit with a $1.13 billion cash offer.

The offer for the Canadian compnay’s CDMA and next generation LTE assets has been approved by US and Canadian bankruptcy courts. However, there is a bid underway, backed by fellow Canadian company RIM, makers of the BlackBerry, to block the deal on protectionist grounds.

According to reports, a multitude of bids following Nokia Siemens’ original offer, which it claimed had been succesful. The company’s chief markets operations officer Bosco Novak admitted the bid was “opportunistic”, and that the firm did not enter the process “with a win-at-all-costs mindset.”

If the acquisition does go ahead, it will give Ericcson, the world’s largest maker of wireless phone networks, a 30% boost in US market share.

While the CDMA standard is used widely in the US, Japan and Korea today, the technology is expected to become obsolete within 10 years as it is replaced with faster networks. However, analysts believe licensing royalties from LTE (long term evolution) technology could be worth $2.9 billion over the next 15 years.

Meanwhile, unified communications (UC) vendor Avaya, meanwhile, has put $475 million on the table for Nortel’s enterprise division, a move that will give it twice the market share of its nearest competitors and make it the UC sector’s resident gorilla.

Related Topics