Canada's telecommunications equipment giant Nortel Networks Corp. has signed an agreement to sell its money-losing UMTS high-speed wireless infrastructure division to France's Alcatel SA for 320 million US dollars.

The Toronto-based company said Friday the sale of its UMTS (universal mobile telecommunications system) access business will allow it to simplify its operations and reinvest that money into product lines where it has a stronger market position and better profitability.

"Nortel is sharpening its focus on the markets in which we intend to lead," chief executive officer Mike Zafirovski said in a conference call.

"There are too many players in this area. Our UMTS access business today lacks the scale and momentum to be profitable on our own," he said. "This business was operating at a loss."

The proposed sale includes Nortel's UMTS access product portfolio made up of the radio network controller and node B products, along with related services, applications, customer contracts and assets.

However, it does not include an array of the company's other wireless access product lines, such as its UMTS core circuit and packet assets, LTE (long-term evolution) technology, GSM and CDMA wireless products, Zafirovski emphasized.

"We're absolutely committed to mobility and to leading in the 4G market," he said, referring to the next generation of wireless network products.

Alcatel said the company will now become one of the world's largest suppliers of UMTS radio access products, which allow big telecom companies to offer wireless broadband access, at a time when the market is expanding rapidly.

Marc Rouanne, president of Alcatel's mobile communications activities, said he is confident the scale resulting from the combined forces will pave the way for further success in the wireless market.

The two companies still have to reach a definitive deal and an agreement is subject to regulatory and other approvals. But Nortel expects the sale will close before the end of the year.

Source: Xinhua