Nortel Wins Taiwanese WiMax Contract

As Nortel pursues a strategy to gain 20% of the emerging Wi-Max market, it has won a contract to provide equipment to Taiwan’s Chunghwa Telecom Co.’s WiMax network. Terms of the deal were not disclosed. Obviously, any contract win is a big deal but the question that analysts and investors need to ask is whether Nortel’s 20% goal is realistic given there are few markets now in which is has that much market share. Sure, Nortel is a strong wireless player but so are Ericsson, Alcatel/Lucent, Nokia, and Motorola so the competition for Wi-Max contracts is going to be fierce.

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5 Responses to “Nortel Wins Taiwanese WiMax Contract”

  1. Leave a Reply Says:

    I didn’t know Ericsson or Nokia were interested in WiMax. I’d say Samsung are looking a dominant player at the moment with their traction in Korea and with Sprint.

  2. Ryan Says:

    I’m pleased to hear that Nortel is picking up deals in WiMax, but my question from every deal remains–why are the terms of the agreement never disclosed?? For a company that is preaching transparency and has shareholders begging to see some process as they go through tough times in the red, I would think they would be all too pleased to release at least some information regarding the deal. It leaves me wondering if Nortel is picking up deals, but nothing of value. I certainly hope not because that would be a waste of time and effort. Then again, wasting time and effort would only add to their belief of wasting money. Lets hope these deals have some value to them, and that maybe one day we can hear about them in greater detail!!!!

  3. Not Observer Says:

    WiMAX represents an excellent global market opportunity. The risk is availability of wireless spectrum which is essentially under control of Governments and the Service Providers that have purchased or licensed the use of spectrum in the various geographies. If there is slow movement in the release and use of spectrum then the entire WiMAX market opportunity will suffer, not just Nortel.

    Service Providers also need to figure out their business plans around WiMAX and how they will offer subscriptions to the service. I would expect to see bundling options where WiMAX is used to delivery of different types of content, including video. If these same Service Providers also offer DSL services, then they have to be careful to not cannibalize their existing revenue streams and margins.

    A market opportunity for WiMAX is cities & municipalities. Lots of potential there including meter reading and traffic control measures. However, cities don’t own spectrum so they basically have to convince Service Providers to grant them use of a segment of their spectrum for a fee.

    WiMAX is so new that it is unrealistic to start the 20% measurement given that very few Service Providers have offered any details on their strategies, implementations and pricing models.

  4. Not Observer Says:

    A response to Ryan’s question – why are the terms of the agreement never disclosed??

    There are 3 main answers to this question.

    * Releasing the terms of an agreement requires the authorization of the client. Some clients do not want the general public and their competitors to know how much they are spending on various projects and products. Many clients require a non-disclosure agreement be signed to protect the client’s best interests.

    * Nortel doesn’t want specific pricing information made available to their competitors. That practice alone will also create pricing pressures.

    * In Government and Military deals, it can become a matter of national security and against the law to publish contract specifics.

    If you look at Nortel’s competitors and how they announce deals, very few have specific details on the price and structure of the deal for the exact same reasons.

  5. Observer Says:

    If they had anything positive to say, judging by their piddly announcements and the way they present financials like a sales flyer, I’d bet they’d say so.

    Claiming orders are hush hush is utter paranoia, we see how PEC / NGS turned out.

    With the Alcatel/Lucent merger dwarfing Nortel’s revenues, we can count on them setting up their own WiMax as Motorola and Samsung dominate the landscape now and the Chinese set up their own standards. I doubt Nortel will be a significant player in this space as others merge and Nortel struggles to grasp at anything.

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