 Swedish wireless equipment maker LM Ericsson had penned a deal to buy a majority stake in Nortel Networks’ North American wireless business for $1.13 billion.LM Ericsson purchased it on a cash and debt-free basis. The purchase covers the older CDMA and newer LTE wireless businesses of Nortel’s Carrier Networks unit. Acquiring Nortel’s North American CDMA business allows Ericsson to serve this important region better as they build relationships for future migration to LTE. As per the deal, Ericsson will get CDMA contracts with North American operators such as Verizon, Sprint, US Cellular, Bell Canada and Leap, as well as LTE assets, and certain patents and patent licenses relating to CDMA and LTE. Last year Nortel’s North American CDMA operations generated $2 billion. It is expected that research and development costs will be relatively low in CDMA compared with other technologies. |
