With the spotlight on Nokia Siemens’ proposed $650-million bid for Nortel’s CDMA wireless business and LTE R&D unit, it’s interesting to note it was four years ago that Nokia and Nortel nearly entered into a wireless joint venture.

If the deal was had consummated, Nortel would have not only made a lot more money but it would have given Nortel the strategic focus and financial ammunition. Instead, the Nokia-Nortel JV was cast aside from then-CEO Bill Owens and the board.

In any event, here’s how the deal would have gone down:

JV 1: GSM/UMTS

•Nortel exits G/U RAN business
•Nokia provides all GSM/UMTS RAN technology / products

•Nokia assumes control of Nortel’s G / U development facilities in France
•Nortel provides Gateways/Voice Call Center platforms
•Nortel becomes CDMA product supplier to Nokia
•Nortel receives substantial compensation / ‘buy out’ from Nokia

JV 2: CMS/ HLR Development

•Develop ‘joint’ CMS and HLR platforms
•Nortel puts platforms/personnel into JV

Device Technology Partnership

•Nortel provides technology under license to Nokia for its Dual Mode Devices

The group also wants the federal government to “use its authority to set conditions under the Investment Canada Act for a significant proportion of the proceeds from the foreign purchases of Nortel businesses to fund Nortel’s Canadian legacy pension, health and long term disability plan deficits and severance. The latter request is due to concern about Nortel’s Canadian estate receiving only a small proportion of the proceeds from expected business sales.”

The speakers include:

Diane Urquhart, host & independent financial analyst
Don Sproule, chairperson of Nortel Retirees Protection Committee
Paul Hanrieder, representative of Nortel Alberta-based terminated employees
Paula Klein, representative of Nortel Ontario and Quebec -based terminated employees
Susan Kennedy, representative of Nortel long term disability employees

You can sign up for the Webinar at https://www2.gotomeeting.com/register/720532955

Since then, Dunn has been involved in litigation after being sued, along with several other Nortel executives by the Securities and Exchange Commission for allegedly engaging in accounting fraud from 2000 to 2004.

Dunn’s legal battles include a lawsuit against Chubb Corp., which he claims must pay 90% to 100% of its legal expenses as part of the coverage he received while Nortel officer.

Yesterday, a Court of Apple judge said Nortel’s insurance policy is “ambiguous”, and send he dispute back to a trial judge.

The dispute focuses on whether Chubb’s insurance policy covers legal costs related to lawsuit allegations involving Dunn’s conduct in 2003. Chubb has been paying half of Dunn’s legal costs.

Source: Bloomberg

“I made it very clear we want to make it the centre of excellence for LTE technology for us,” Mr. Maestri told the National Post. “We really want to keep Ottawa as a centre of excellence — it is going to be a global centre.”

Nokia has a vested interest in keeping jobs in Canada given Export Development Canada, a Crown agency, is providing $300-million of financing to support the company’s bid.

While there is a possibility that another bidder may emerge for Nortel’s CDMA business and LTE R&D unit, Nokia is clearly hoping that it can win approval to expand its North American foothold.

More: Unstrung has details on Nokia’s plans for Nortel’s LTE assets.

The talk was triggered by a recent estimate from JP Morgan Chase analyst Ehud Gelblum could be worth as much as $2.9-billion in terms of royalty payments.

According to LightReading, Gelblum calculates that “if Nortel (or whoever ends up owning the IPR) collects 1% of every relevant LTE device sale price in the coming years (based on the assumption that LTE has a lifespan of 15 years and with a 10% discount rate), the IPR is worth just over $2.9 billion.”

The $2.9-billion, however, was poo-pooed by Stuart Carlaw, VIP and chief research officer with ABI Research. He told Telecoms.com that the figure is “somewhat overblown” because he believes Gelblum’s assumption is flawed.

“This is disproportionate to their patent holdings and cannot be seen as fair and reasonable. I doubt any other single vendor will be looking for this type of return - even Qualcomm,” Carlaw told Telecoms.com.

Putting aside who might be right, the reality is the LTE patents may have a lot of value - just as Nortel’s cash-cow CDMA wireless business has a lot of value that Nokia is getting for a song.

This may explain why some investors may be starting to look at Nortel as a fertile opportunity to acquire some attractive assets stuck within a struggling business.

Update: The Ottawa Citizen has a story looking at the value of Nortel’s business units on the block.

The Ottawa Citizen reports that MatlinPatterson Global Advisors, a $9-billion private equity investor, may be interested in bidding for Nortel.

MatlinPatterson’s biggest obstacle could be a lack of time it has to put together a bid by July 21 in time for a court-approved auction on July 24 of Nortel’s CDMA wireless business, which has attracted an offer from Nokia Siemens.

Whether or not MatlinPatterson can pull together a bid for Nortel is uncertain, it puts the spotlight on whether Nortel could have survived by going through a restructuring process that let it shed assets, facilities and employees while leaving it with an operating structure and business units to become a viable, albeit smaller, player.

Without having any insight into the restructuring process, Nortel’s senior management and board are taking the easy way out. Why not go out with a fight rather than bending over backwards to the demands of creditors? Sure, creditors want their pound of flesh but there has to be a better option than abandoning ship and casting assets overboard.

Instead, CEO Mike Zafirovski and his team are tossing in the towel after three years of bad choices, strategic mistakes and organizational paralysis.

If Nortel’s board had any chutzpah, they would consider giving another senior management team a shot of remaking Nortel instead of letting it blown up into smithereens.

Of course, the board has done little over the past decade to suggest it knows a better way so let’s not expect miracles now.

If MatlinPatterson can save Nortel and make a few bucks along the way, more power to it.

More: The Telecom Blog has a good post questioning why anyone would want to buy Nortel’s enterprise business.

In an interesting interview with Network World’s Tim Greene, McHugh suggests that Nortel should bring back the Bay Networks brand, which disappeared soon after Nortel purchased Bay for $9.1-billion at the peak of the telecom boom.

“The more independently I can run this business and take it back to its roots and make Bay Networks exist again, the more effective and focused we are going to be,” he said. “I would like Nortel to reincarnate Bay Networks.”

In what can only been be seen as a not-so-subtle criticism of Nortel’s senior management team, McHugh said part of the enterprise unit’s problems has been “the parent company doesn’t understand how important data networking equipment is from a customer perspective. There was a higher level strategic goal that we were peripheral participants in. We were a strategic afterthought.”

McHugh was hired by Nortel a year ago after 26 years with Hewlett-Packard,

http://www.networkworld.com/news/2009/063009-nortel-bay-mchugh.html

MarketWatch has a story looking at Nokia’s North American efforts. It includes this quote from Frost & Sullivan analyst Ronald Gruia that illustrates how sweet of a deal Nokia could get, and Nortel’s desperation to sell assets to appease creditors.

“In the near term, analysts expect Nokia-Siemens to use the Nortel wireless division as a cash cow. CDMA technology is slated to be phased out, but the process could take years and companies in the U.S. and Asia will still spend billions on maintenance.

Nokia-Siemens is also getting the division fairly cheaply - some analysts calculate it’s worth twice the agreed-upon price - and the unit is still quite profitable. In 2008, it generated $2.2 billion in sales. You still have a lot of milking left on that cow.”

Technorati Tags: nokia-siemens, nortel

Over the past three years, however, Nortel has only made one major acquisition (Tasman Networks for $99-million) so it’s not like Riedl has been leading the M&A charge - or whether CEO Mike Zafirovski gave him the strategic freedom and mandate to make it happen.

Not surprisingly, Riedl’s profile has been pretty low. So, it was surprising to see him emerge at a hearing today focused on getting court approval for Nokia Siemens’ proposed $650-million purchase of Nortel’s CDMA business and LTE R&D unit.

Riedl said carriers love Nortel’s technology but were reluctant to do business with the company because of its uncertain financial future. He was quoted by Bloomberg as saying that customers told Nortel “we love your technology, but we are concerned about your balance sheet. Unfortunately for us, we will win the technology prize, but not the commercial business.”

He makes it sound like Nortel is the belle of the ball but can’t get anyone to dance with them. Of course, it’s a lot more complicated than that but that’s a long story for another time.

Technorati Tags: george riedl, MEN, mike zafirovski