The assets include software, intellectual property, non-exclusive licenses, property, and equipment related to transitioning data from 3G networks to the next generation of mobile data networks. The companies expect the deal to close by the end of the year, and it does not include legacy packet core components for Nortel's UMTS and GSM businesses.
The deal comes as many telecom providers are looking to position themselves for the move to 4G networks. Sprint Nextel and Clearwire have already lit up WiMax networks in multiple markets that deliver average download speeds of 3 to 6 Mbps on-the-go. The companies plan to cover more than 120 million customers with WiMax by the end of 2010.
While WiMax is gaining some traction, the majority of mobile operators around the world have locked in on LTE for their 4G networks. Verizon Wireless has one of the most aggressive rollout plans, as it plans to have LTE networks in 25 to 30 markets by the end of 2010, with a nationwide network by the end of 2015. AT&T plans to upgrade its 3G network to High Speed Packet Access 7.2 first, and it will begin rolling out its LTE network in 2011.
Nortel was hit hard by the global economic recession, and the company filed for bankrupt protection in January. The Hitachi deal is a relatively minor asset selloff, as Nortel sold its Enterprise Solutions unit to Avaya for about $900 million, and its CDMA/LTE business fetched $1.13 billion from Ericsson. The next major auction for Nortel's Ethernet and optical division is scheduled for Nov. 13.
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