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Nortel may be a casualty of the ongoing consolidation of the wireless infrastructure business, indicating it is reviewing the future of its LTE business as well as other activities. Last week, the Canadian company issued a stern financial warning and announced a thorough review of its whole structure, and CEO Mike Zafirovski followed up, in an investor call, with hints he would exit new wireless technologies and focus primarily on enterprise systems and carrier VoIP.

Zafirovski has already indicated that the metro Ethernet division would be put up for sale, and now he said another strategy would be to "mitigate the risks associated with fourth generation carrier wireless investments". Previously, the vendor had looked to steal an early march in 4G. It quit W-CDMA in 2006, but said this would free it to leapfrog the rest of the market in WiMAX and LTE. Just as Mobile WiMAX became a commercial reality, Nortel backed away from its own developments and chose to rely on an OEM deal with Alvarion, looking to focus all its efforts on the next system over the rainbow, LTE. Now, this too may prove too uncertain in its returns and timescales to be supported by Nortel shareholders.

Nortel has two main options for wireless - joint venture or sale. Alcatel-Lucent might take on the CDMA and even GSM businesses to ensure control of the CDMA sector, even in its decline, and Nortel has significant IPR and R&D programs in LTE and in OFDMA in general, which might have some value for one of its rivals, such as an IPR-hungry Chinese manufacturer.

Zafirovski said: "Our view is that it would be advantageous to focus on a few areas where we can in fact win." And these seem to boil down to enterprise IP and unified communications, where Nortel has mounted a stepped-up challenge to Cisco with partnerships like that with Microsoft; and carrier VoIP/applications.

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