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

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

Hundreds of leaders from the New Zealand IT industry gathered at the Hilton in Auckland on 17 November to celebrate the finest female talent in the Kiwi channel and recognise the winners of the Reseller News Women in ICT Awards (WIICTA) 2020.

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards
Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

The leading female front runners of the New Zealand ICT industry joined together for the annual Reseller News Women in ICT Awards event at the Hilton in Auckland, during which hundreds of guests celebrated 13 outstanding individuals who won awards, chosen from more than 50 finalists representing over 30 organisations.

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards
Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

More than 500 channel leaders gathered in Auckland on 21 October at the ​Reseller News Innovation Awards ​2020 to celebrate the achievements of the New Zealand technology industry's top partners, start-ups, vendors, distributors and individuals.

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners
Show Comments