Nortel reassures market that it still sells WiMax gear

Headlines that said Nortel was leaving WiMax business were untrue, exec says

Back in June, Scott Wickware, the new general manager of the WiMax unit at Nortel Networks Inc., became alarmed by press reports saying that Nortel had jettisoned its WiMax high-speed wireless business.

"I never want to hear the words jettison or scuttle again," Wickware said with a laugh during an interview today. He was remarking on the headlines he read six weeks ago after the networking equipment maker said it was re-aligning its WiMax development with a strategic partner, Tel Aviv-based Alvarion Ltd.

A "significant number" of Nortel research and development staff who had been working on WiMax technology were redirected to development of another high-speed wireless technology, Long-Term Evolution (LTE), he explained. But that did not mean that Nortel was abandoning WiMax.

Nortel is selling Alvarion base stations, which are essentially radio transceivers that are often installed beneath a cellular antenna. But the Alvarion hardware will carry the Nortel brand and will include pieces of Nortel intellectual property, including software that customizes the base station for use on Nortel networks, Wickware said.

"A customer will call Nortel and order from us," he said. "We will take that base station and package it with what we develop and whatever else is required [for a carrier building a WiMax network] -- whether it be devices or services, or optical or backhaul -- and sell that into the market."

Using funding from Nortel, Alvarion, which already has about 1,000 employees, will hire more workers for the partnership. One of Nortel's principal contributions to the partnership is its reputation for working with large carrier customers, while Alvarion brings its strength in building base station radios, Wickware said.

Wickware said it was the headlines of several prominent articles that were generally off-base in describing Nortel's move, and not the actual stories, which, he said, were "pretty accurate." For example, Computerworld ran a story from its IDG News Service affiliate under the headline "Nortel picks LTE over WiMax," while CNET reported, "Nortel ditches WiMax to Focus on 3G."

The headline Nortel actually used in a news release on June 11 was, "Nortel accelerates 4G strategy to bring both WiMax and LTE to market faster."

Asked if the Alvarion partnership might be a move toward spinning off its WiMax business completely, Wickware said that was not the case. He also said the partnership does not contemplate that Alvarion would be the exclusive equipment maker from which Nortel buys its WiMax products. "That [arrangement] could be envisioned, but at this point, I don't think so," he said.

Berge Ayvazian, an analyst at Yankee Group Research Inc. in Boston, said Nortel's plan seems to be to work with a smaller partner with good technology, and not to abandon WiMax.

Alvarion has developed a good WiMax radio, but it needed help from an "end-to-end" supplier such as Nortel, Ayvazian said. Meanwhile, until the Alvarion partnership was announced, Nortel had been unsuccessful at selling WiMax on its own. "I was surprised by how few wins Nortel had in fact," he said.

Ayvazian noted that many carriers will prefer LTE technology to WiMax, but he added that many "emerging markets" will want WiMax, and carriers in some established markets will want to offer WiMax as a wireless alternative to wired broadband access. He explained that WiMax is emerging as an important technology in markets like Japan, South Korea and Pakistan, among others, sometimes as a supplementary network to existing networks.

As for the June press accounts indicating that Nortel seemed to be exiting WiMax, Ayvazian said that there were different interpretations that seemed to derive from an investor's conference in Toronto when the Alvarion partnership was first announced.

"I didn't attend the conference, but there was certainly an interpretation in the press that Nortel would be exiting WiMax," Ayvazian said. "I must have done six press interviews and said at the time that [Nortel leaving WiMax] isn't how I viewed things and was inconsistent with what Nortel said."

Wickware said the proof that Nortel is still in the WiMax business will come when Nortel announces customer wins in coming weeks.

Copyright © 2008 IDG Communications, Inc.

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