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Ericsson CEO clueless about fate of Nortel deal

Swedish telecom major Ericsson, whose acquisition of Nortel's wireless business here last month has been challenged by BlackBerry maker Research In Motion and Canadian opposition parties, says it is still in the dark about the fate of the deal.

business Updated: Aug 22, 2009 12:38 IST

Swedish telecom major Ericsson, whose acquisition of Nortel's wireless business here last month has been challenged by BlackBerry maker Research In Motion (RIM) and Canadian opposition parties, says it is still in the dark about the fate of the deal.

Ericsson was the highest bidder at $1.13 billion at last month's court supervised auction of Nortel's wireless division.

The 124-year-old Toronto-based Nortel, which has been operating under bankruptcy protection since January, is selling its businesses one by one to pay off debtors.

BlackBerry maker RIM, which was shut out of bidding for refusing to sign non-disclosure agreements, and opposition parties say the deal is against "national interest" as it puts sensitive Canadian technology in foreign hands.

Bowing to their pressure, the government asked a parliamentary committee to review the deal.

Top representatives from RIM, Nortel and opposition leaders have already appeared before the committee and the ball is now in the government's court.

Under the Investment Canada Act, the government can review deals if the assets sold are more than $312 million. But the Nortel assets have been valued only at $149 million.

However, BlackBerry maker and opposition parties are dead set against the deal on grounds of "national security".

Ericsson Canada CEO Mark Henderson admitted Friday that he was in the dark about whether the government will review the deal.

"We have met with them openly and tried to give them all the information that they need...and also to submit facts around any concerns around national security. So we are openly discussing with them and waiting for their decision," Henderson said.

Stressing that the takeover of Nortel's wireless business by Ericsson presented no threat to Canada's security, he said: "The provision was really around items like terrorism...(but) this is a company that has been in the country for almost 60 years. We have built some of the biggest telecommunications systems in this country."