Nortel files for bankruptcy protection in U.S

[dipsydoodle]

Source: Reuters

TORONTO (Reuters) - Nortel Networks Corp, North America's biggest maker of telephone equipment, filed for bankruptcy protection on Wednesday, a day before it was due to make an interest payment of about $107 million.

Nortel and a number of its affiliates filed for Chapter 11 bankruptcy protection in the United States, according to a court filing.

"Based on this filing, the board of directors must believe that not only is the fourth quarter bad, but that the first quarter is going to be just as bad or worse," said Duncan Stewart, an analyst at DSAM Consulting in Toronto.

"Although they have cash in the short term, even the medium-term outlook is not enough to make the company viable as a going concern

Read more: http://www.reuters.com/article/ousiv/idUSTRE50C7RV20090114

[okiru109]

1. yikes!

that is my industry :scared:

[snooper2]

2. The days of the DMS

are gone :) ( at least new installs )

I don't think they were able to transition to the next generation of switches fast enough- and they price themselves out of the market. Companies like Taqua and Metaswitch are killing them....

www.taqua.com

www.metaswitch.com

[No Elephants]

3. Are we going to have to bail out their lending banks, too? I want to be sure that

no bank gets left behind (NBLB).

[Selatius]

4. Another big-name firm goes down in flames. nt

[melm00se]

10. this should

not be seen as surprise. Nortel, in many ways, missed the telecom boat and stuck with TDM when they should have been migrating to the more flexible (and cheaper) IP based telecom

[crispini]

5. This is really bad. I have friends at Nortel.

Scary times. This is a huge deal for that industry.

[rainbow4321]

7. There goes the telecom corridor in Richardson, TX

I had heard about the bankruptcy from a friend this week...the stock has gone from a high of $1000 to less than a dollar. She had said that all the employees were let go. So much for "Texas economy is doing much better than the rest of the nation" bullshit that the Dallas media has been pushing.

[OhioChick]

6. Nortel bankruptcy jolts Indian IT outsourcing firms (Lead)

Nortel bankruptcy jolts Indian IT outsourcing firms (Lead)

January 15th, 2009 - 9:09 pm ICT by IANS

Mumbai, Jan 15 (IANS) India’s outsourcing firms were jolted Thursday after Canada-based Nortel Networks, one of North America’s largest telecom equipment firms and a key client for many IT firms in this country, filed for bankruptcy. Among the biggies of Indian outsourcing firms that are expected to bear the heat of the development are Tata Consultancy Services (TCS), Wipro, Infosys and Sasken Communication Technologies, industry sources said.

These companies, however, declined comment on the Chapter 11 bankruptcy filing by Nortel, citing client confidentiality agreements.

Sasken is expected to be the worst hit as Nortel holds a 9.33 percent stake in the company, apart from being a top client. The filing led to the Sasken scrip losing over 16 percent at the Bombay Stock Exchange within hours of trading Thursday.

“India will have to face adverse effects of globalisation now that we have enjoyed the fruits,” said Jagannadham Thunuguntla, head of the capital markets arm and director of a major share brokerage firm, the New Delhi-based SMC Group.

http://www.thaindian.com/newsportal/uncategorized/nortel-bankruptcy-jolts-indian-it-outsourcing-firms-lead_100142860.html

[high density]

8. So sad

I hope we can bail out Tata and Wipro.

[OhioChick]

9. Technically speaking, we already have.

Wipro says buying Citigroup unit will boost IT infrastructure outsourcing in India

Offshore vendor plans to scale up remote IT management services for other customers

December 23, 2008 (Computerworld) Offshore outsourcing and IT services provider Wipro Ltd. is buying Citigroup Inc.'s IT subsidiary in India for $127 million, under a deal that also gives Wipro a six-year contract worth at least $500 million to provide technology services to Citi.

But as Soumitro Ghosh, senior vice president of finance solutions at Wipro, explains it, one of the major benefits that the Bangalore, India-based vendor expects to gain from the acquisition of Citi Technology Services Ltd. is the Citigroup unit's ability to deliver infrastructure outsourcing services to other customers.

Many U.S. companies, especially in the financial services industry, operate their own offshore centers in India and other countries as an alternative to contracting with offshore providers. Citi Technology Services, which was set up in 2005, has about 2,000 full- and part-time employees in the Indian cities of Mumbai and Chennai.

But Citigroup has been using its India-based operations not just for software development or tech support, but also to provide remote infrastructure management services, including administration of internal databases, networks, desktop systems and midrange servers.

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9124284&intsrc=hm_list

This comment following the article sums it up best:

"Let me make sure I understand this right

- Citi got the most american tax-payer money in the form of TARP, almost 13% of TARP money disbursed i.e. $45 billion

- American tax payer is on the hook for almost $300 billion losses of Citi's bad assets

- But Citi continues to ship more and more american jobs offshore to India. Indian offshore vendors like Wipro and TCS are getting sweet heart deals from Citi. In return for $500 million, TCS getting $2.5 billion revenue stream.

American taxpayers should quit bailing out banks like Citi. If Citi operates in 100 countries, why can't the UN bail Citi out ?"

[ChromeFoundry]

11. Glad my taxpayer dollars are helping Indian vendors. n/t