SEOUL, South Korea-Nortel Networks Ltd. said it has entered into a joint venture with LG Electronics Co. Ltd. to provide telecom equipment and networking solutions to markets in Korea and other parts of the world.
The deal is expected to be completed in the second quarter. The agreement is a 50-50 venture, although Nortel said it will enjoy one more share of the new company than LG.
“Our joint venture with Nortel is expected to create greater synergy between LG Electronics’ cutting-edge technology and Nortel’s expertise in delivering communications capabilities,” said S.S. Kim, chief executive officer and vice chairman of LG Electronics.
Nortel said it will bring its full portfolio covering wireless, wireline, optical and enterprise solutions to the deal. Among other things, LG will bring what its describes as its W-CDMA system with video telephony.
“Our intent is to invest in Korea to leverage the wealth of strong R&D talent and technology steeped in LG Electronics and Nortel to develop products and solutions for the global market,” said John Giamatteo, president, Asia Pacific at Nortel.
LG is not noted as an infrastructure powerhouse, but it has always tried to leverage its CDMA technologies not only in Asia but also in North America. For its part, Nortel, which has its fingers in most technology pies, needs a stronger Asian foothold
“To be a global communications provider, it is imperative for us to expand our market share and compete in Asia,” said Bill Owens, president and chief executive officer. “Establishing a relationship with a world-class company is an important step.”
