Alcatel to acquire Nortel's UMTS Radio Access Business

Alcatel agreed to acquire Nortel's UMTS radio access business (UTRAN) and related assets for US$320 million -- making Alcatel one of the world's largest suppliers of UMTS radio access solutions.



The proposed sale includes Nortel's UMTS access product portfolio made up of the Radio Network Controller and Node B products and OAM solutions, related services and associated assets. It is anticipated that the significant majority of employees of Nortel's UMTS access business will transfer to Alcatel.



The deal adds an additional fourteen UMTS customers to the Alcatel customer list. The company would then have a global footprint that amounts to one in four UMTS operators. This would include strong relationships with 12 of the top 15 mobile service providers worldwide and all of the top 15 service providers worldwide.



Alcatel said the acquisition would also significantly strengthened its research and development capabilities, especially in HSxPA and 3G Long-Term Evolution (3G LTE), fully leveraging Alcatel's expertise in multi-standard radio solutions and Software Defined Radio (SDR) technology.



"We are clearly poised to become a strong number 3 in UMTS and HSxPA," said Marc Rouanne, President of Alcatel's mobile communications activities. "Combined with our strong GSM/EDGE position, our early leadership in WiMAX and our strong commitment to LTE, this acquisition will add further momentum to Alcatel's broadband wireless access strategy. Through the contemplated merger with Lucent, the combined company will also enjoy a leading position in CDMA EV-DO, including a clear commitment to Rev C, thus offering the most comprehensive and innovative wireless access portfolio in the industry."



Nortel said the deal would simplify its business and strategically focus its investments for leadership in key markets -- next-generation mobility, enterprise transformation, and services and applications. As part of its ongoing mobility business, Nortel will continue to develop and support solutions for the evolution of GSM access and core, GSM-R, GPRS and EDGE technologies as well as CDMA access and core and UMTS core.



"Nortel is sharpening its focus on the markets in which we intend to lead. Our UMTS access business lacks the scale and momentum needed to become profitable," said Mike Zafirovski, president and chief executive officer, Nortel.

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