Nortel exits WiMax business
TORONTO (Reuters) - Nortel Networks Corp, the ailing telecom equipment provider, has decided to abandon its WiMax wireless technology business as it restructures in bankruptcy protection.
In a statement late on Thursday, Toronto-based Nortel said it will also end an agreement with Alvarion Ltd. Under that deal, struck last June, Nortel was to resell Alvarion's WiMax access products and help it fund the development of the technology.
In the months leading up to its filing for bankruptcy protection, Nortel hailed WiMax -- essentially a type of fast, next-generation wireless technology -- as very promising.
Nortel said it will work closely with Alvarion to make sure it can continue to support existing WiMax customers.
"We are taking rapid action to narrow our strategic focus to areas where we can drive maximum return on investment," Richard Lowe, president of Nortel's carrier networks business, said in a statement.
Nortel said last fall that it would look at mitigating the risks related to investments it had made in next-generation technology.
The company, North America's biggest maker of telecom equipment, filed for bankruptcy protection in Canada and the United States earlier this month, blaming the current economic crisis for derailing a turnaround effort that began in 2005.
It had about $2.4 billion in cash when it sought court shelter from its creditors and about $4.5 billion in long-term debt, according to court documents.
Analysts have speculated the company will have to shut down business lines and divest assets as it fights to survive.
Its shares closed 1.5 Canadian cents lower, at 11.5 Canadian cents, on the Toronto Stock Exchange. In mid-2000, at the height of its success, they were worth more than C$1,100 each, adjusted for a stock consolidation that took place in 2006.
(Reporting by Wojtek Dabrowski; editing by Rob Wilson)