Report: Nortel to Spin Off Wireless, Enterprise

Why emerge from bankruptcy when you can break yourself up into pieces and sell to your rivals? That may be the tack Nortel Networks Corp. is considering. The vendor reportedly is in talks to spin off its main wireless and enterprise units.

The Wall Street Journal is reporting that Nortel is in talks to sell its wireless gear division to arch-rival Nokia-Siemens Networks, and its market-leading enterprise solutions business to competitor Avaya Inc. or Siemens Enterprise Communications.

Nortel, despite its bankrupt status now, has in general done well in the wireless equipment and enterprise areas of its business, which together made up $6.7 billion in sales in 2008—making those units attractive takeover targets. And, it could be a way for those units and jobs to remain relatively intact and productive--even if orphaned from their parent--while giving Nortel the cash it needs to settle its debt. That might be particularly true for the enterprise side of the house, where Nortel claims an enormous install base and ongoing sales.

The rumor is tantalizing but there is no confirmation nor denial emanating from Toronto. A spokesperson told xchange that “Nortel has a policy of not commenting on rumor and speculation.”

Nortel filed for protection from creditors in January, which are owed $4.5 billion in debt.

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