Nortel loss widens on restructuring charges

Canadian equipment vendor Nortel reported an increase in net losses to $113m in the second quarter of 2008, compared to a loss of $37m in the same period last year.

Nortel said the shift was largely due to expenses associated with restructuring. In June, the company announced plans to shift its 4G focus to LTE, rather than WiMAX.

Revenue for the second quarter increased slightly to $2.62bn, compared to $2.56bn in the same period last year, on the back of increased sales in Global Services, Metro Ethernet and Enterprise. Although Carrier Networks revenue, which provides the lion’s share of sales, fell 2 per cent year on year and 15 per cent sequentially to just over $1bn.

As part of its refocus, Nortel will offload its WiMAX initiative into a strategic agreement with WiMAX kit vendor Alvarion, supplying core network solutions, backhaul, applications, and global services, to be supported by Alvarion’s radio access technology.

The Canadian firm said the move will allow it to achieve faster time to market with WiMAX at a lower cost. At the same time the company will be able to accelerate its LTE development to meet a demand, which it claims is emerging faster than the industry originally predicted.