Nortel’s Strategic Direction Revealed..Kinda

Not sure why Nortel CEO Mike Zafirovski decided to make London to provide more details about the company’s strategy direction but there the curtains have been pulled back a little bit. Speaking at press conference to announce several contract win, he said Nortel plans to focus on metro Ethernet, CDMA and 4G. “The bandwidth glut left by the Internet bubble bursting has disappeared and we clearly see the opportunity for next generation optical and backbone transport networks. We aim to capture the video explosion and, with IMS, ensure next-generation convergence services become a reality at an affordable price point.” Fair enough but what analysts and investors want to know now is how Nortel plans to execute. For all the talk about focusing on businesses with 20% market shares, Nortel has sold a few bits and pieces this year, including the UMTS radio access business to Alcatel. Zafirovski has talked about acquisitions but hasn’t really spelled out how aggressive Nortel could be; he’s talked about more focused R&D but Nortel is still spending $1.9-billion a year; he’s talking a lot about 4G but it’s unclear whether Nortel has enough momentum in the market to be a significant player.

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