June 12, 2008Nortel Passes the Torch to Alvarion
The Canadian equipment manufacturer Nortel is passing on its WiMax operations to Alvarion in order to focus on LTE development, as reported on telecoms.com. Nortel claims the deal allows for both WiMax and LTE, which is projected to get to market faster than anticipated, to be developed on a timely schedule.
But there are other dynamics at play. The most immediate stimulus for the switch may be due to the Clearwire-Sprint deal still fresh in everyone’s minds; such a coalition in support of WiMax technologies has got AT&T and Verizon scrambling to polish the rival technology they’re backing, LTE. Once shipped, LTE hardware will be able to deliver floods of streaming media to mobile users, in as-of-yet unheard of quantities. Is it any surprise that Nortel is eying this development anxiously? In Nortel CEO Mike Zafirovski’s own words, it’ll put “lots of pressure on the bandwidth of the networks” (TheStar.com). Thus they have prioritized, allowing Alvarion to handle WiMax while they lavish the LTE front with the attention it needs.
Smart move? It seems so. Nortel’s stock consequently jumped 13% following the announcement. But don’t interpret that as a clear indication of market confidence in LTE–the battle lines are still being drawn on the 4G frontier.
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