Nortel may spin off UMTS business

Industry analysts are speculating that Canadian vendor Nortel may be planning to spin off its UMTS business following rumours of organisational changes within the company.

Nikos Theodosopoulos, analyst with investment bank UBS, said that he has received information which suggests that Nortel has organisationally separated the GSM and UMTS access businesses, “a move that may presage a potential spin-off/disposal of the UMTS access business”.

Nortel is one of the largest vendors which has remained noticeably uninvolved in the recent spate of equipment manufacturer mergers. The recently announced four year strategic alliance between Nortel and Microsoft as well as a focus on enterprise channel partnerships, indicate that the enterprise space continues to be an area of increasing focus.

Motorola is another manufacturer that has not participated in any of the mega-mergers that have seen Lucent and Alcatel and Nokia and Siemens come together in recent months. But the vendor yesterday formed a UMTS kit partnership with Chinese vendor Huawei, which could be an indicator of future strategy.

Nortel has also been wrong-footed this week by the departure of the vice president and general managers for WiMAX and Converged Core Networks including IMS. No replacements have yet been identified and the developments could put Nortel in a predicament as UBS points out that both IMS and WiMAX are two of three key strategic areas of focus for Nortel.