Nortel downshifts on WiMax

June 11, 2008, 2:30 PM UTC

By Scott Moritz

WiMax was dealt another blow Thursday as Nortel placed a bigger bet on a competing wireless technology.

Nortel (NT), the giant telecom equipment supplier, said Wednesday that it will focus its research on a fourth-generation technology known as long term evolution, or LTE, and shift its existing WiMax effort over to a joint venture with Alvarion (ALVR)

The move is a scamble by Nortel to get a slice of 4G spending as telcos like AT&T (T) and Verizon (VZ) push toward LTE.

Rival 4G technology WiMax hangs on in the U.S. thanks to a recent multiparty venture headed up by Sprint Nextel (S) and Clearwire (CLWR). The group includes cable shops Comcast and Time Warner and Time Warner Cable, along with funding from Intel and Google. Nortel hopes to address this smaller opportunity through its Alvarion partnership.

Nortel also said Wednesday that it is on track to hit its 2008 financial target calling for low single digit sales growth. Analysts are looking for 2008 sales of $11.2 billion or about 2.4% growth according to Thomson First Call.

Separately, Verizon says it has picked Nortel to supply Ethernet gear, a big departure from the MPLS, or multiprotocol label switching, favored by suppliers like Alcatel-Lucent and Juniper.