The lingering demise of Nortel has taken another turn as the company, under increasing pressure from its shareholders, looks to push Nokia Siemens Networks (NSN) to lift its bid by hinting heavily that other bidders are emerging. In turn, NSN has responded that it might raise the offer, and could also be interested in other Nortel business units.
This manoeuvring, which also has a strong political driver from the Canadian government, has been given fresh impetus by Nortel's VP of wireless marketing, Bruce Gustafson, claiming during a teleconference: "If you're assuming there are no additional bids because there's no public disclosure, you'd be mistaken."
While the private equity firm MatlinPatterson and at least one group of former Nortel executives have registered their interest in acquiring parts of Nortel, no rival bids have been made public. However, NSN is sufficiently keen to grab Nortel's CDMA and LTE assets that its North American head, Sue Spradley, has indicated NSN's commitment to up its offer if needed.
Separately, NSN's latest result indicates that services are becoming a major revenue generator for the company as equipment sales come under increasing pressure from Huawei. As revealed in the Nokia numbers, NSN would appear to be gaining 45 per cent of its overall revenues from outsourcing, integration, consulting and maintenance services.
According to Unstrung, with NSN's Q2 revenues running at €3.2 billion (US$4.5 billion), its Services divisions pulled in revenues of €1.44 billion ($2 billion) for the quarter. And as if to highlight the Services division's ongoing potential, NSN today announced a new five-year managed services deal with Brazilian fixed and mobile carrier Tele Norte Leste Partricipacoes SA (better known as Oi) worth €1.1 billion (US$1.55 billion).
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For Nortel, it's MatlinPatterson vs. Nokia Siemens