Ericsson wins battle for Nortel wireless assets

Nortel's CDMA and LTE assets are on their way to Ericsson

Wireless telephone network provider Ericsson has won the battle to acquire the CDMA and LTE assets of ailing Nortel Networks, after it beat Nokia Siemens Networks in an auction on Friday.

Ericsson bid $1.13bn (£686m) on a "cash and debt free basis", trumping joint venture Nokia Siemens which launched a bid of $650m (£395m) earlier in the week.

Toronto-based Nortel was once the largest manufacturer of phone hardware in North America, but filed for Chapter 11 bankruptcy protection earlier this year, blaming the recession for scuppering its efforts to rejuvenate the business.

Ericsson president and chief executive Carl-Henric Svanberg said that acquiring Nortel's North American CDMA business would help the firm serve the region better, and aid its efforts towards migrating customers to LTE.

"Furthermore, by adding some 2,500 highly skilled employees, of which about 400 are focused on LTE research and development, Ericsson reinforces and expands a long-term commitment to North America," he said.

"This deal, along with our recently announced Sprint service agreement, truly positions Ericsson as a leading telecoms supplier in North America."

Nortel's North American CDMA business generated around $2bn (£1.2bn) last year, with profitability coming from solid products and a broad range services, according to Ericsson.

Richard Lowe, president of carrier networks at Nortel, maintained that the deal would ensure the stability of Nortel's CDMA and LTE business for the future.

"Customers will enjoy continued strong support from an industry leader as they look to evolve to LTE," he said.

"Many employees will also have the opportunity to continue their work with Ericsson, bringing their innovation power and creativity to the wireless industry for years to come."

The transaction is subject to court and regulatory approval.