Alcatel to buy Nortel unit for $320 million

Our Corporate Bureau
01 September 2006

Mumbai: Alcatel is scaling up operations with a planned acquisition of Nortel's third-generation cell phone network unit for $320 million.

Alcatel has signed a memorandum of understanding (MoU) with Nortel to buy its UMTS radio access business (UTRAN) and related assets. This includes UMTS base stations, radio network controllers, operation and administration maintenance software and associated services.

The deal will catapult the French communications network provider to number three position in 3G networks and help the company push into emerging markets.

Alcatel currently has an estimated 3G market share of three to four per cent and the acquisition would bolster this to around 12-14 per cent, only behind leader Ericsson and Nokia/Siemens.

The acquisition will also give Alcatel 14 new customers, including Vodafone in Spain, Italy, Portugal and Britain as well as Orange in France, Slovakia, Poland and Belgium.

The deal, which is subject to regulatory clearances and closing conditions, is expected to be completed in the fourth quarter.