IB Net Payout Yields Model

Nortel Cancels WIMAX deal with Alvarion

Not a huge shock considering the bankruptcy filing by Nortel (NT) a while back. After hours last night Alvarion (ALVR) issued a PR detailing the break and the financail impact. It's disappointing because ALVR had hoped to use the scale of NT to allow them into bigger deals, but this cancellation doesn't end the dominance of ALVR in the Wimax market. Guess we'll find out more details from the breakup on the Q4 call. With ALVR trading near cash now, the stock is a huge buy. NT had hardly become a big part of the business and won't leave a huge wake when they leave.

  • The joint strategic WiMAX agreement covers, among other things, the resale by Nortel of the Alvarion platform of WiMAX access products and Nortel’s contribution of resources and funding to accelerate Alvarion’s development of its portfolio of WiMAX base stations. Under the terms of the agreement, Nortel is obligated to pay Alvarion for certain research and development services beyond Q4; however, collection of these payments is uncertain and subject to Nortel’s creditor protection proceedings.
  • As a result of the foregoing, Alvarion will not be able to recognize approximately $2.4 million of revenues from the sale of products to Nortel during the fourth quarter of 2008.
  • Richard Lowe, President, Carrier Networks, Nortel. "Planning is underway to transition our joint mobile WiMAX customers to Alvarion and ensure there is no disruption to service or support."


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