Nortel is taking its showcase Metro Ethernet Network (MEN) business off the market four months after it put the unit up for sale.
In a statement sent to MicroScope, Nortel said: "The previously announced potential MEN divestiture has been put on hold while the overall business plan to emerge from this restructuring process a more competitive and focused company is being developed."
"Through the restructuring process, our goal is to proactively address the Company's current challenges and ultimately strengthen the business to ensure its long-term viability."
The MEN business had been expected to fetch around $1bn when its sale was announced last autumn, but Nortel received little interest in the business as potential buyers hoarded their cash during the economic crisis.
However, the unit's technology is much in demand and it remains profitable today, suggesting that it could be more of an asset to Nortel now that bankruptcy protection measures have given it some wiggle room.
Given the unit's success the sale was never fully accepted or understood in many quarters; speaking to MicroScope last November, EuroLAN managing consultant Keith Humphreys suggested the decision to sell up was "bizarre".