Ericsson Ponies Up for Nortel WirelessEricsson Ponies Up for Nortel Wireless

I have no clue who's going to end up with Nortel Enterprise, but I will say that I'll be surprised if there aren't more bids.

As you've likely heard by now, Ericsson has beaten out Nokia Siemens Networks in the bidding for Nortel's CDMA and LTE business units in the bankruptcy auction that concluded last Friday. The $1.13 billion Ericsson bid was almost 75% above Nokia Siemens' $650 million bid.This would suggest that there's room for competition for the Enterprise Solutions unit as well. Nortel's 1Q09 financials show the Enterprise Solutions unit generated 64% of the revenue that the wireless units generated (not counting services). Meanwhile, Avaya's $475 million bid for ES was 73% of the $650 million Nokia Siemens bid for the wireless divisions--suggesting that Nokia Siemens underbid more than Avaya did. All other things being equal, the benchmark set by the wireless auction suggests a higher bid for ES, but not as much higher as Ericsson went in outbidding Nokia Siemens.

Of course, all other things aren't equal. In addition to private equity bidders, you had three major wireless players in the running: Nokia Siemens, RIM and Ericsson. And the Nortel wireless units were widely considered its most attractive asset.

In contrast, potentially less money is at stake in the Enterprise bidding, but the only two industry players being discussed are Avaya and Siemens Enterprise. It's possible that we'll see a private equity firm bid on acquisition of just the Enterprise Solutions business, but as Allan Sulkin outlined last week, the purchase of Nortel looks like a financial move by Avaya's owners as much as it is a market-domination play.

I have no clue who's going to end up with Nortel Enterprise, but I will say that I'll be surprised if there aren't more bids.I have no clue who's going to end up with Nortel Enterprise, but I will say that I'll be surprised if there aren't more bids.