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10/2/2009
02:28 PM
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Nortel To Sell GSM Business

The company's GSM and GSM-R operations are not expected to draw as much as the $1.13 billion Ericsson paid for Nortel's CDMA, LTE units.

Nortel continues its break-up process and the company is seeking court approval to put its GSM business up for sale.

The company filed for bankruptcy protection in January, and it is in the middle of liquidating its assets. It will now be auctioning off its GSM assets and relevant patents, which include connections with more than 100 mobile operators in 65 countries. This business unit also comprises its GSM-R operations, which handle communications for railway control centers and trains.

The bidders will have to submit an offer by Nov. 5, and the auction is expected to be completed four days later. The deal will be subject to approval by U.S. and Canadian regulators.

"The proposed sale process will provide a timeline for identifying the successful bidder for our valuable GSM/GSM-R assets," said Pavi Binning, chief restructuring officer for Nortel, in a statement. "We have seen interest in this business during extensive initial discussions."

It is unclear which companies will bid for its GSM business, but industry watchers expect this business to sell for less than the $1.13 billion Ericsson paid to acquire Nortel's CDMA and LTE businesses. Huawei and ZTE could be possible bidders for the GSM operations because it would give the companies a stronger foothold in the North American market.

Nortel also recently sold off its Enterprise Solutions unit to Avaya for about $900 million. Avaya outbid Siemens Enterprise Communication, private equity groups, and intervention from Verizon Communications to acquire this business, and it makes Avaya the largest enterprise phone equipment maker in North America.


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