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Local Tech Wire
RESEARCH TRIANGLE PARK, N.C. – is selling its wireless businesses known as GSM/GSM-R business to and Kapsch CarrierCom in a deal worth $103 million in cash.
The sale is the latest in a series of asset sales by the bankrupt telecommunications gear maker. Nortel still employs some 1,700 people at its operations in RTP.
GSM (Global System for Mobile communications) is the most widely used standard for wireless technology in the world. GSM-R is a standard for railway operators.
Bankruptcy courts in the U.S. and Canada must still approve the deal, which Nortel said it hopes to receive on Dec. 2. If approved by the courts, Nortel expects the transaction to close in the first quarter of next year.
Ericsson plans to buy Nortel’s GSM business in North America for $70 million. Customers include AT&T and T-Mobile. According to Ericsson, Nortel’s North American GSM business produced some $400 million in revenue in 2008.
The company recently won the bidding for two other Nortel assets – CDMA and LTE. CDMA, or code division multiple access, is a rival standard to the dominant GSM. LTE, or long-term evolution, is a next-generation wireless network technology that promises to be much faster.
“The transaction emphasizes Ericsson’s commitment to the North American market and strengthens our position as the leading provider of telecommunications technology and services in the United States and Canada” said Hans Vestberg, the incoming president and chief executive officer at Ericsson.
Kapsch would acquire the GSM business of Nortel in Europe and Taiwan as well as the entire GSM-R business.
Some 680 Nortel employees will be offered jobs by Ericsson and Kapsch.
“These acquisitions will enable our customers to continue to benefit from the product innovation and support that they’ve come to expect from us,” said Graham Richardson, the general manager for the Nortel business units.
“Today’s announcement is also a turning point for our employees, the majority of whom will take their considerable expertise on to Ericsson and Kapsch,” he added.