Nortel's wireless assets won at auction by Ericsson for $1.13 billion

By the time the auction was over, Swedish firm Ericsson had paid $1.13 billion dollars forthe wireless assets of bankrupt Nortel Networks. The purchase price includes Nortel's CDMA wireless technologies used in North America and assets having to do with the next generation LTE high speed wireless technology that many carriers plan on using for their next generation of cellular connectivity, the so-called 4G LTE service. Independent telecommunications analyst Jeff Kagan said the deal will allow Ericsson to increase its "footprints" in North America as the continent heads toward  4G LTE usage. Kagan added that this technology, when fully implemented, will allow for broadband type speed in cellphones. Besides physical assets, Ericsson will also be receiving some patents for winning the auction.

Nortel filed for bankruptcy in January and was once North America's biggest maker of telephone gear. From a peak of 90,000 employees, Nortel cut down to 25,000 workers. The wireless division had a bit more than 3000 on the payroll at the time of the auction and Ericsson said it would keep 2,500 of them after the deal closes. Three firms were in the running for the assets. Nokia put in the first bid at $650 million dollars followed by a $725 million dollar bid by private equity firm MatlinPatterson. A rumored $1.1 billion dollar attempt to buy Nortel's wireless assets by BlackBerry manufacturer RIM was blocked by Nortel. RIM refused to agree to the confidentiality rules that all other bidders agreed to follow. The winning $1.3 billion dollar bid by Ericsson came after a long 12 hour auction and still needs to be approved by U.S. and Canadian Courts in hearings scheduled for Tuesday.

source: Reuters