The End of an Era? Nortel Exodus Imminent

The end of the Nortel saga is nearing, states many sources close to Nortel Networks, including reports by Toronto’s Globe and Mail newspaper. Confirming the worst of fears by some in the telecommunications and carrier-grade markets, Nortel may file for bankruptcy protection as early as today. Signaling the end of a telecommunications ‘era’, without a strong financial background, including investment in R&D, the company’s future is in grave danger. New customer investment is likely to completely subside, and without trust in the company’s support, new product development, and overall financial health, customers will likely look elsewhere. Reports this morning also mention the potential division and sale of the company, including discussion of the sale of Nortel’s product lines to foreign competitors. Several companies named in the Globe and Mail article include Nokia Siemens Networks, Ericsson, and Cisco Systems. What could be a final blow to the company’s dwindling stock price may become a reality today. After a small increase in the company’s shares last week, Nortel suffered a nearly 24 percent drop during the day on Monday. Overall, this news has long-reaching effects on the Enterprise and Carrier markets, which have relied on Nortel heavily in the past. Signaling the end of a telecom era, those customers will likely be looking elsewhere. Follow Considering Convergence throughout the day for the latest on this Nortel news.