Nortel Networks said it's dropping its mobile WiMax business and its partnership with WiMax base station provider Alvarion. Nortel, which filed for bankruptcy protection earlier this month, said it will focus its mobile wireless effort on its Long Term Evolution (LTE) technology.

The decision raises questions about the long-term viability of mobile WiMax as it gears up for full-fledged competition with LTE. In recent weeks, Google, Intel, and Time Warner have all written down their investments in Clearwire, which has been deploying a nationwide WiMax network. Initial users of Clearwire's mobile WiMax offerings in Baltimore and Portland, Ore., have generally been pleased with the service.

In an e-mail, a Nortel spokesman said the company's decision to discontinue its mobile WiMax business will not impact its existing fixed WiMax portfolio. "Nortel and Alvarion are working closely together to transition Nortel's mobile WiMax customers to Alvarion," he said.

Noting that its WiMax agreement with Nortel covers the resale by Nortel of Alvarion's WiMax access products, Alvarion said the collection of certain payments due it by Nortel is "uncertain." Tzvika Friedman, Alvarion's president and CEO, added that Alvarion's "industry position has never been stronger." The two companies had been cooperating on accelerating the development of Alvarion's WiMax base stations.

Their partnership called for the integration of Alvarion's radio access network technology with Nortel's core network solutions, including backhaul operations and global services.

Nortel said it will continue to work with Alvarion to ensure that WiMax customers are supported without interruption. "We will work closely with Alvarion to transition our mobile WiMax customers to them and assure customers that they will continue to benefit from leading-edge technology and high-quality service," said Richard Lowe, Nortel's president of carrier networks, in a statement.

In a reference to its LTE business, Lowe said: "We are taking rapid action to narrow our strategic focus to areas where we can drive maximum return on investment." Nortel has a contract to deliver LTE core technology to Japan's KDDI, and it has LTE trials with Verizon and T-Mobile.