Nortel: Most Popular Stories of 2009

Tracking a year of Nortels downfall in the 10 most-read stories published on VON, xchange, PHONE+ and Billing & OSS World.

Kelly Teal, Contributing Editor

December 30, 2009

4 Min Read
Nortel: Most Popular Stories of 2009

In less than a year, Nortel Networks has gone from a vibrant, venerable presence in the telecom world to a company auctioned off in pieces to the highest bidders – and many of those offers low-balled the actual assets’ value. Now, what’s left of the company is riddled with strife over the incompetence and mismanagement that led to the Jan. 14, 2009 Chapter 11 bankruptcy filing. Pensioners have been left with no security, creditors with unpaid accounts and customers wondering how long before their Nortel systems grow obsolete.

Here, in order of lowest to highest, are our 10 most-read Nortel stories of the year, gathered from each our telecom publications – VON, xchange, PHONE+ and Billing & OSS World.

10. Nortel CEO’s First Work E-Mail: Ego Got in Way?

Ah, those were the days. The days when Mike Zafirovski ran Nortel and took issue with the idea of CEOs being only “slightly” delusional. Fast-forward from the December 2005 e-mail – that ran complete with corporate acronyms for success and corny analogies – to now. Mike Z. has resigned from the bankrupt telecom equipment maker amid disgrace and still wants $12 million in compensation from the company he helped run into the ground.

9. Canada Should Save Nortel, Not GM, Says Former Exec

A former president of Nortel’s broadband division got pretty upset after Canada’s federal government agreed to help bail out the Canadian unit of General Motors, rather than the legendary Nortel.

8. Nortel in U.S. Loses $6M in One Month

Insolvent Nortel has been required to report its earnings each month and in just several weeks, the company managed to lose $6 million.

7. What if Avaya Loses Nortel Enterprise Auction?

Avaya Inc. took a big risk in assuming it would win the hotly contested auction for Nortel’s enterprise assets. Other companies had done the same with different Nortel properties over the summer, only to lose to deeper-pocketed rivals. So the question became, what would happen if Avaya didn’t get Nortel enterprise? (Which, by the way, it did.)

6. Nortel Enterprise Buy Could Heat Up Avaya-Cisco Duel

Even though Cisco Systems Inc. remains the world’s largest maker of networking gear, Avaya, with the benefit of Nortel’s enterprise unit, makes a formidable rival. The speculation then, lo these many months ago, centered on just how large a dent Avaya would put in Cisco’s market share.

5. Nortel Might Win Verizon’s LTE Contract

Even in bankruptcy, Nortel was winning contracts with operators around the globe. And less than a month after filing Chapter 11, Nortel was considered a front-runner for the Verizon Wireless LTE buildout.

4. Nortel Move to Sell MEN Perplexes Analysts

The notion of bankruptcy hadn’t even been broached when the telecom industry was blown away by the news that Nortel was prepared to sell its most respected, most lucrative division – the Metro Ethernet Networks (MEN) unit. The idea puzzled analysts, who said Nortel needed to consider its long-term strategy over the short term. As it turned out, Nortel pulled the sale just weeks before declaring bankruptcy. Ciena won MEN at auction in mid-November 2009 with a bid totaling $769 million – far less than analysts had projected MEN was worth. And although originally published in 2008, this post remained highly popular in ’09.

3. Nortel Has a Future, Insider Writes

Back in April, some people still were hopeful about Nortel’s prospects. One such person was blogger David Burton, who said he worked with some of Nortel’s developers. He praised their passion and drive, citing the traits as reasons why Nortel could thrive. But, sadly, such optimism wasn’t foundation enough to buoy a sinking ship.

2. Nortel Enterprise Sale to Avaya Could Mean R&D Job Cuts

Change can be good but, in this case, one former Nortel exec feared an Avaya takeover of Nortel’s enterprise unit would mean big R&D job cuts. The two companies competed directly in the niche market – the concern was there would be too many Nortel experts to hire. The situation remains sketchy. Avaya has offered positions to 5,700 Nortel workers worldwide but the breakdown isn’t clear.

And last but not least …

1. An Oral History: Inside Nortel’s Meltdown

From the people who were there, our oral history pinpoints when the 114-year-old Nortel really started to go off track: when a cultural shift from quality product output turned to a focus on shareholder value. Not long after, Nortel began its journey toward oblivion thanks to years of bad management and financial scandal. Analysts, pensioners, journalists and others share their views of how and when Nortel fell from glory.

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About the Author(s)

Kelly Teal

Contributing Editor, Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.

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