Ericsson has just added another element of Nortel's dwindling asset pile to its respective portfolio by officially announcing that it will acquire the Canadian vendor's stake in LG-Nortel Co. Ltd, a joint venture with Korea's LG Electronics, for $242 million.
This is the third purchase that the Swedish vendor has made of Nortel's assets. Previously, Ericsson acquired Nortel's CDMA and Long Term Evolution (LTE) divisions for $1.13 billion last July and then its North American GSM business for $70 million in November.
Ericsson's purchase should not be of any great surprise as a rumor emerged last month that the company would buy the 50 percent LG-Nortel stake that Nortel had been looking to sell since last May.
In addition to establishing a stronger foothold in the Korean Telecom market with marquee accounts, including KT Corp., LG Telecom, and SK Telecom, the deal will enhance Ericsson's broadband access portfolio. A notable piece of the LG-Nortel venture is its expertise in the emerging WDM-PON technology segment.
While WDM-PON has mainly found a home with smaller carriers such as U.S.-based independent ILEC Hancock Telephone and Netherlands-based UNET, the aggressive research efforts it has made into the technology will prepare it for the next stage of large carrier PON deployments. Indeed. Both Verizon and France Telecom previously conducted lab and field trials of XG PON and WDM-PON technologies.
For more:
- see the Ericsson release here
- Light Reading has this article
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Rumor mill: Ericsson could move on LG-Nortel stake
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Mike Zafirovski, Former CEO of Nortel - Top Telecom Turkeys of 2009