Nortel to join with Motorola, rumour says

Nortel and Motorola are rumoured to be collaborating on a joint venture, which would see the companies combine their wireless infrastructure.

Nortel and Motorola are discussing a joint venture that would see the companies combine their wireless-infrastructure units, according to a news report.

If true, the move would be one of the telecom's new CEO's first acts in restructuring the company.

The Wall Street Journal reports that the venture would likely have sales amounting to $10 billion, serving equipment to wireless phone carriers.

The paper's source is apparently "people familiar with the situation". The source indicates that Nortel would take a majority stake in the venture, with Motorola owning a minority.

According to analysts featured in the Canadian Press, the two companies "would face major integration problems and few benefits if they make a deal to combine their wireless infrastructure divisions".

Duncan Stewart, president of Duncan Stewart Asset Management, told Canadian Press that the companies would undoubtedly run into 'integration issues'.

"Putting together two companies who are losing market share seldom translates into a company that starts gaining market share," he said.

Nortel Australia had no comment as of press time.

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