By Christopher J. Kardish, Principal Research Analyst, Nemertes Research Inc.

Sept. 8, 2006

Nortel [NYSE/TSX: NT, http://www.nortel.com/] announced that it intends to sell its UMTS access business for $320 million to Alcatel [Paris: CGEP.PA and NYSE: ALA, http://www.alcatel.com/]. The move is yet another sign of continuing consolidation in the communications equipment market.

Nortel says the sale will help it focus investments in key markets. So just what are those key markets, and how will $320 million help?

The markets include next-generation mobility, enterprise transformation, and services and applications.

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