Menu
Nortel: Bankruptcy Move Protects Cash for Support

Nortel: Bankruptcy Move Protects Cash for Support

When Nortel Networks Corp. filed for protection from creditors in the U.S. and other countries last week, one of the telecommunications equipment vendor's primary goals was to preserve a cash holding of $2.4 billion, which it plans to use to provide ongoing support to customers.

The $2.4 billion "is an important number to understand," said Joel Hackney, president of Nortel 's enterprise solutions unit. "That money allows us to deliver products we have committed to customers and [continue] product support."

Hackney said that as soon as the bankruptcy filings were announced, he called the CIOs at Nortel's five largest customers to explain the move. "They're savvy, and they get it," he said.

IT managers who might consider switching to rival vendors should look at why they chose Nortel in the first place, Hackney added. "I'm absolutely convinced that our value proposition only gets stronger with the financial protections," he said.

Nortel has debts of about $4 billion and was due to make a $107 million bond payment last week. CEO Mike Zafirovski said in a statement that the bankruptcy filings would enable the company to restructure and narrow its focus.

The International Nortel Networks Users Association, a Chicago-based group with about 4,000 members, issued a statement saying that the filings will give the vendor "an opportunity to truly focus on strengthening" its financial position.

"Chapter 11 is simply a restructuring tool, and Nortel is not going away," Victor Bohnert, the INNUA's executive director, said in an interview.

Nortel's filings "give me no pause at all," said Pierre-Eric Belzile, executive director of information and communication technology for the Montreal Canadiens hockey team. "I'm a big user and a big supporter."

The Canadiens recently installed IP phones from Nortel, and the team uses the vendor's gear to support a ticket-sales call center and the ticket-scanning system at the Bell Centre, its rink.

Zeus Kerravala , an analyst at Yankee Group Research Inc. , said Nortel might not have had to seek protection from its creditors if the economy hadn't soured so sharply. But he gave the company a rating of just 4, on a scale of 1 to 10, for its technology innovation. "Where," he asked, "can Nortel lead?"

This version of the story originally appeared in Computerworld's print edition.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Featured

Slideshows

Meet the leading female front runners of the Kiwi channel

Meet the leading female front runners of the Kiwi channel

Reseller News honoured the leading female front runners of the New Zealand channel at the 2018 Women in ICT Awards (WIICTA) in Auckland. The awards honoured standout individuals across seven categories, spanning Entrepreneur; Innovation; Rising Star; Shining Star; Community; Technical and Achievement.

Meet the leading female front runners of the Kiwi channel
Meet the top performing customer-centric Microsoft channel partners

Meet the top performing customer-centric Microsoft channel partners

Microsoft honoured leading partners across the channel following a year of customer innovation and market growth in New Zealand. The 2018 Microsoft Partner Awards recognised excellence within the context of the end-user, spanning a host of emerging and established providers.

Meet the top performing customer-centric Microsoft channel partners
Reseller News launches new-look Awards at 2018 Judges’ Lunch

Reseller News launches new-look Awards at 2018 Judges’ Lunch

Introducing the Reseller News Innovation Awards, launched to the channel at the 2018 Judges’ Lunch in Auckland. With more than 70 judges now part of the voting panel, the new-look awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors.

Reseller News launches new-look Awards at 2018 Judges’ Lunch
Show Comments