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Ovum issues statement on Nortel bankruptcy filing

There is no immediate industry impact from Nortel Network Corp.’s bankruptcy filing, as the company’s d...


January 16, 2009  


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There is no immediate industry impact from Nortel Network Corp.’s bankruptcy filing, as the company’s downwards spiral has been gradual and bankruptcy restructurings take time, two analysts at Ovum say.

 

According to Dana Cooperson and Matt Walker, for Nortel’s three key constituencies — customers, investors, and staff — the announcement reinforces, “but does not fundamentally change earlier concerns.

 

“The latest phase in the Nortel saga began four months ago, when it pre-announced 3Q08 earnings (guiding down expectations), publicly put a ‘for sale’ sign on its Metro Ethernet Networks (MEN) division, and then mapped out yet another reorganization. At the time, we stated that a more radical approach than divestiture was needed to cure the company’s woes.

 

“The bankruptcy filing is radical, but it will be exploited by competitors. They are now in a strong position to remind customers that Nortel can no longer give assurances of continued development of any specific products, which will surely impede Nortel’s ability to bring in new business.”