Nortel could seek wireless JV as it downgrades revenue forecasts again
Published: 17 September, 2008
READ MORE: Nortel Networks
As the telecoms equipment market continues to come under pressure, Nortel has initiated a major review of its structure and future direction, cutting its revenue forecast for the year and paving the way to sell off certain units.
The company warned that third quarter and full year sales would be well below analyst estimates, claiming "significant pressure" from a steeper than expected cutback in operators' capex plans, especially in CDMA. Previously, Nortel had forecast revenue growth in the low single digits for the year, with a gross margin of 43%. Now it is looking for a revenue fall of between 2% and 4%, and gross margin of 42%. In the current quarter it expects revenues of about $2.3bn, below analyst expectations of $2.66bn.
The Canadian company only had about a year after emerging from a series of financial scandals, before some of its key markets, such as mobile infrastructure, started to go through shake-up and increased price competition. It has made some strong moves under its CEO, former Motorola number two Mike Zafirovski, but exited the UMTS sector before its investments in 4G systems could start to generate real revenue; defocused on its much vaunted WiMAX program to concentrate on LTE; and is suffering from the slowdown in CDMA.
"It is clear that the business environment in which we operate requires additional immediate and decisive actions," said Zafirovski, promising to step up cost cutting measures and look at further restructuring options, with possible unit sell-offs. The most likely candidate would be the Metro Ethernet Networks unit but Zafirovski has already said that he is open to more radical moves, including a deal to merge its wireless business with that of another company, to gain greater scale
More NORTEL NETWORKS News
More HANDSET News
More LTE News
COMMENTS
Carrier Broadband Performance: Africa & Middle East
Carriers are using mobile broadband as their weapon of choice in the fight against the commoditization of voice and falling ARPU. This...
Voice over LTE: Market Analysis and Forecasts
VoLTE offer unique advantages in lowering a carrier's voice infrastructure economics and promises to improve voice quality, device...
Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?
Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...
