LG-Nortel to Become LG-Ericsson

  • Ericsson
  • WDM-PON
STOCKHOLM - Telecom equipment vendor Ericsson, which has bought other assets of the bankrupt Nortel, will now acquire Nortel's majority share (50 percent plus 1 share) in LG-Nortel, the joint venture of LG Electronics and Nortel Networks. Because LG-Ericsson will be one of the major telecom players in Korea, the acquisition expands Ericsson's footprint in the Korean market. It provides Ericsson with a well-established sales channel and strong R&D capability in Korea, along with an industrial base and strong relationships with Korean operators such as KT, LG Telecom and SK Telecom.

The joint venture was established in 2005 through the contribution by LG Electronics of its telecommunications systems business and by Nortel of its Korean distribution business. The joint venture has developed and marketed large-scale telecommunications systems such as WCDMA, CDMA and LTE for telecom service providers in Korea as well as enterprise products and services. In addition, after acquiring Novera Optics, LG-Nortel became one of very few vendors marketing WDM-PON systems. In 2009, LG-Nortel generated approximately $650 million of sales and had 1,300 employees.

The joint venture will continue to be headquartered in Seoul. The transaction is expected to have a positive effect on Ericsson's earnings within a year after closing, the company said.

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