Will Nortel Effectively Spin Off Carrier Business?Will Nortel Effectively Spin Off Carrier Business?

Essentially, they're saying Nortel could wind up spinning off its carrier business and becoming an enterprise-focused company.

Mixed signals everywhere about Nortel and bankruptcy. On the one hand, you have suggestions that the company will--and should--file sooner rather than later, namely, while it still has cash on hand, because the credit crunch has made it hard for companies to get debtor-in-possession financing while in bankruptcy (the current example cited is the Tribune Co.). On the other hand, you have articles like this from the Globe and Mail that talk in terms of business unit selloffs to avoid bankruptcy.The interesting thing about the Globe and Mail article is that what they're talking about is Nortel basically selling off everything except the enterprise business--in other words, just the converse of what I recently suggested they should have done several years back. Essentially, they're saying Nortel could wind up spinning off its carrier business and becoming an enterprise-focused company.

If nothing else, that would seem to make the resulting enterprise-focused company an acquisition target by a company looking to buy its installed base, much as Aastra picked up Ericsson's PBX business. Especially if the company's stock (which closed at 31 cents yesterday) continues its descent.Essentially, they're saying Nortel could wind up spinning off its carrier business and becoming an enterprise-focused company.