February 18, 2009, 4:00 PM — Nortel lost out on a key contract with Verizon Wireless, a missed opportunity that will add to the company's revenue challenges as it goes through bankruptcy proceedings.
The company had put in a bid to provide Verizon with Long Term Evolution (LTE) gear, but Verizon says it has awarded the business instead to Alcatel-Lucent and Ericsson.
Nortel said in a statement that Verizon was being considerate of the challenges Nortel's bankruptcy proceedings represent, given that Nortel sells gear to Verizon for other aspects of its networks.
"Our significant ongoing role in Verizon's CDMA/EV-DO network and their Carrier VoIP network are of critical importance to Verizon, and they were not prepared to place incremental demands on us before we complete our restructuring," Nortel's statement says. "They are eager to have us emerge successfully, and have indicated that the door is open to future business."
"Verizon has assured us that they remain very impressed with our technology and our performance in the trials, placing us among the top three candidates in their selection process. Nortel intends to continue to assess all options, including partnerships, in our drive to get our LTE technology to market."
Nortel says it has high hopes for its LTE technology as a future revenue stream for the company. "Nortel's LTE technology is currently in trial with some of the world's leading mobile operators, and we continue to receive high marks for the performance of our solution in the field," Nortel says.
Asked whether early notification of Verizon's LTE bid awards influenced Nortel's decision to file for bankruptcy protection, a spokesman responded, "There is no connection at all."
Nortel has won an extension of bankruptcy protection until May 1, but says it still plans to resolve its problems quickly. "We intend to work swiftly to complete and execute our restructuring plan to emerge from creditor protection a more focused and competitive company on a sound financial footing," the company says.
