Nortel has signed a non-binding Memorandum of Understanding for the sale of its UMTS access business to Alcatel for US$320mn, a move that will enable Nortel to simplify its business and strategically focus its investments for leadership in key markets while ensuring its customers’ UMTS access requirements will continue to be met. As part of its business strategy, Nortel is executing on plans to increase investment in key areas, partner in others, and divest where there is no path for it to lead or realize attractive returns.

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. 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. Completion of the transaction is subject to, among other things, the negotiation and execution of a definitive agreement between Nortel and Alcatel, completion of consultations with work councils and other employee representatives, and customary closing conditions including regulatory approvals. The parties are targeting completion of the transaction in the fourth quarter of 2006.
www.nortel.com
www.alcatel.com