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China telecom shuffle puts Nortel in catbird seat


28.08.2008

China`s major telecom realignment has put Canada`s Nortel Networks in a position to finally pull out of the doldrums that have plagued it in recent months, Paradigm Capital analyst Barry Richards told the Ottawa Citizen.

China`s second-largest fixed-line operator, China Netcom Group, and its second-largest cellular carrier, China Unicom Ltd., are set to merge under China Unicom`s logo Oct. 15. Between them, they have 279 million customers. Both are Nortel customers and are upgrading from second to 3G and 4G technology. Unicom plans to spend $14.6 billion over the next two years upgrading to a 3G wireless network.

"This is a glorious opportunity for Nortel, already a supplier to both China Unicom and China Telecom," Richards said. "Overall, China has the potential to pull Nortel`s business and its stock out of its long-term funk, and we believe they are well positioned to exploit that market."

 

 

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