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North America's largest communications manufacturer, Nortel Networks, has filed for protection under the Companies' Creditors Arrangement Act in its native Canada and Chapter 11 in the US. As predicted earlier today, this brings a century of telecoms history to a sad end.
The firm stressed that it remained "100% focused on serving customers worldwide through continued R&D investments and support of its product portfolio to fulfil customer needs".
Nortel's board came to a unanimous decision on the company's future after holding an emergency meeting last night, and tried to paint a positive picture on Wednesday afternoon, claiming the filing would allow them to deal with Nortel's cost and debt burden.
In a statement, CEO Mike Zafirovski, said: "These actions are imperative so that Nortel can build on its core strengths and become the highly focused and financially sound leader in the communications industry that its people, technology and customer relationships show it ought to be."
One Nortel reseller said that the news could benefit its channel in the short-term.
"It's cynical, but there's money to be made. You can sell new kit to panicking customers or you can jump on the maintenance bandwagon; Nortel has a massive installed base, so it's too big an opportunity to let it slip away," he said, adding that rivals Cisco would be well placed to exploit its collapse.
Nortel is the first major vendor in the ICT industry to have gone into administration as a direct result of the credit crunch. At the height of the dot com bubble, Nortel stock was trading at upwards of $1,200 Canadian, but at the closing bell last night, it had fallen to just 38.5 cents.