Come on Canada. Wake up. Nortel gold is almost dust

by Jeff Wiener on September 4, 2009

Nortel CanadaAll bids are now due for the Enterprise division, and – wait – this just in …

Sometimes you wonder if the Canadian Federal and Provincial governments are asleep.

The Canadian government only expressed interest and concern about the Nortel CDMA business only once the CDMA process was complete, and victor announced. The day after the sale was done the Canadian Government decides that maybe they should keep the business in Canada, and block the sale. Where were they in January 2009 when Nortel announced bankruptcy ?

Next business unit up for auction is the Enterprise division. Again, no federal or provincial government looking to salvage this piece of Canadian Telecom gold. Protect Canada’s R&D investment. The Canadian taxpayer has invested BILLIONS into Nortel through Canada’s SR&ED (research and development tax credit) program. It’s the US government standing by waiting to stake a $2.97 billion claim on the asset, but, no Canadian government.

All bids are now due for the Enterprise division, and – wait – this just in … The Provincial Government is hoping that the victor will keep the jobs in Canada. Maybe an announcement, a plan, some dollars on the table PRIOR to the auction process commencement ? No. Not the way things are done around here. That would be too proactive. Craft your own destiny perhaps. No. That’s not the Canadian way.

Let’s let fate determine it’s course, issue a Provincial Press release letting the world know that:

“In my view, it goes without saying that there’s an expectation that the footprint be maintained here and that’s certainly what I would look for in a successful bidder,” Pupatello told Dow Jones.

Unfortunately, I suspect that none of the bidders are Canadian. It looks like there are 3 bidders, chances are, none Canadian (Avaya of course, Siemens and Matlin Patterson probably). These firms will certainly act in their own self interest, offer and bid, and then run the NEW NORTEL the way they see best fit.

How about the Canadian Government putting some money on the table. Provide some incentive for the winning firm to take advantage of some of those SR&ED tax losses that are sitting on the books, with the condition that a certain number of jobs are maintained in the country. That might be a WIN WIN. We can then keep the gold in the country.

Written by: Jeff Wiener. Follow by: RSS, Twitter,, or Friendfeed

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UCChangeAgent September 5, 2009 at 12:40 pm

Let’s ask a straight forward question – What impact does Nortel Enterprise have on the lives, safety and security of Canadian citizens?

Answer: Limited with the exception of 911 Call Centres and telephony systems for various Police agencies such as the RCMP and a substantial market share in Canadian Hospitals.

With this, you would think that the various Government bodies that manage these services would want clear direction on support commitments on these systems from the eventual purchaser of Nortel Enterprise. Research & Development of these systems is primarily located in Ottawa and Belleville, so there really should be some motivation to secure parts of this business for the best interests of Canadians.

This topic could get far more complex when the Carrier Voice division of Nortel is sold. This division holds huge market share for home phone services delivered by the various Telcos across the country. If your home phone service is provided by Bell, Telus, MTS, SaskTel or Aliant, then chances are your home phone line is provisioned by Nortel equipment known as DMS or CS2000. Sustaining 911 Services will become very critical here so a long term product support plan should be of top priority and interest to all levels of Government across Canada.

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