Despite its prolonged insolvency, Nortel Networks Corp. (NT) is signing deals with companies around the world, from coffee makers and professional services companies to the American military. The latest resale announcement comes courtesy of BT Global Services (BT), a division of the UK telecom giant that’s struggling just about as much as Nortel itself. BT and Nortel said on May 18 they have renewed an agreement they’ve had in place for some time – BT will resell Nortel’s enterprise equipment and services for another four years.
Nortel’s latest coup comes on top of other recent, similar announcements. Professional services firm Deloitte just installed Nortel’s unified communications platform in its Moscow offices. German coffee icon Melitta is using Nortel’s data center products. And government contractor General Dynamics has ordered Nortel’s Assured Services Local Area Network products for McChord Air Force Base in Washington state. Further, Nortel has named value-added distributor Westcon Group as its go-to-market channel in Thailand, Vietnam and the Philippines.
Each of these arrangements means partners and end users expect to receive Nortel service and support for years to come. And, indeed, in each instance, the customers praise Nortel’s technology and low costs; noticeably absent – and not atypical for corporate statements – is mention of their faith in Nortel’s viability.
Indeed, how can Nortel, a company that likely will be sold off in pieces rather than emerge from bankruptcy intact, keep forging such long-term commitments? And what kinds of safeguards are placed into the transactions in case Nortel does fall apart?
Valid, Difficult Questions
“These are valid questions that are difficult for me to answer,” Jamie Moody, a Nortel spokeswoman, told VON. What she could offer is that, while in bankruptcy protection, Nortel is “100 percent bound by terms of any new contract.”
And since neither Nortel nor BT nor others are disclosing the terms of their agreements, industry observers are left to speculate on the seeming conundrum of a struggling company signing customers. Several analysts are hypothesizing about Nortel’s relative success in keeping and adding clients.
