Dophiのブログ

    A headline news was just announced from a Canadian media.

CTV: Nortel files for chapter 11 bankruptcy protection 

Nortel Networks Corp. filed for Chapter 11 bankruptcy protection in the United States on Wednesday, one day before it was due to make a $107 million interest payment. The Toronto-based company and several of its affiliates made the filing in federal bankruptcy court in Delaware. The move came shortly after the Nortel's shares were halted on the TSX.

CBC News: Nortel Networks files for bankruptcy protection

The board of directors of North America's largest telecom equipment maker met in Toronto on Tuesday night to discuss the company's financial options. In a release, the company said the decision to file for protection was a unanimous move by its board.

The company said the process will allow it to deal with its cost and debt burden, restructure its operations and narrow its strategic focus.

    Does this surprise me? Absolutely not. This situation is triggered by Nortel's inability to settle an interest payment of $107 million CAD. But, I don’t want to discuss about any financial issue here. In my mind, the real root cause of this situation is the lost of Nortel’s competitive advantage in the global market. Since Nortel purchased Bay Network in 1998, it never knows what a customer really wants and improves the products. During the past 5 years, I only could see that Nortel kept itself in its own holy land and never wanted to know what had been changed by its competitors. Alteon was a pioneer in server load balancing field before Alteon Websystems was acquired by Nortel; Bay Network brought some concepts for networking solution before Nortel purchased it. Once Nortel gets these companies’ technology and products, Nortel never brings any new amazing concepts to customers. Well, as we know, Nortel announced the restructuring in early 2007 and two years has been passed. During the two years, I only can see the decentralization of its organization and reduction of employment. Anything that can beat other competitors was never presented by Nortel for its own product lines. Some products such as NSNA and wireless LAN switches are totally failed because of the frequent change of product lines or poor function.

    Of course, bankruptcy protection does NOT equal bankruptcy. Nortel still has time to make its business run on the right way as long as they can figure out correct decisions and visions in this market. I hope this situation can be changed although Nortel doesn’t have much time before the bankruptcy comes.

2009-01-21 Update:

For information of severance of Nortel : Ernst&Young Restructuring Doc

For information on the U.S. Chapter 11 proceeding: http://chapter11.epiqsystems.com/clientdefault.aspx?pk=48f43852-fa84-4f30-8fb3-4f605af7c8d0&l=1