Alcatel and Nortel sign UMTS MoU

has signed a non-binding Memorandum of Understanding with

to acquire its UMTS radio access business (UTRAN) and related assets for $320m.

With this deal, Alcatel said it should become one of the world's largest suppliers of UMTS radio access solutions at a time when the UMTS market is expanding rapidly. The proposed acquisition would enhance Alcatel's product portfolio with technology and products used by leading operators such as the Vodafone and Orange groups. Alcatel would also benefit from strengthened research and development capabilities, especially in HSxPA and 3G Long-Term Evolution (3G LTE).

Under the transaction, Alcatel intends to acquire Nortel's UMTS radio access technology and product portfolio, associated patents and tangible assets as well as customer contracts. Alcatel anticipates that a significant majority of employees of Nortel's UMTS access business will be transferred to Alcatel.

Following the transaction, Alcatel would acquire another fourteen UMTS customers around the world, one in four of all UMTS operators. Alcatel would also reinforce its presence with Tier-1 operators, especially in 3G markets such as South Korea, Italy, Spain, France, and the UK.