Nortel announced today that it has signed a non-binding Memorandum of Understanding for the sale of its UMTS access business to Alcatel for US $320 million. to Alcatel for US $320 million. That would make Alcatel one of the world's largest suppliers of UMTS radio access solutions . Vodafone and Orange, two of Europe's larger carriers, already use its UMTS solutions.

"We are absolutely committed to mobility and plan to lead the 4G evolution and play a key role in the mass market adoption of mobile video and multimedia services," said Richard Lowe, president, Mobility and Converged Core Networks for Nortel. "With a strong position in GSM and CDMA, an established service provider customer base, and technology leadership in key areas like OFDM-MIMO, we have a solid foundation for success going forward."

Om Malik says, "if the Lucent-merger made Alcatel a big player in the CDMA market, then the Nortel deal gives it more heft in the post-GSM 3G market".

Nortel says it will continue to develop and support solutions for the evolution of GSM access and core, GSM-R, GPRS and EDGE technologies as well as CDMA access and core and UMTS core. The proposed sale includes Nortel's UMTS access product portfolio made up of the Radio Network Controller and Node B products and OAM solutions, related services and associated assets. It is anticipated that the significant majority of employees of Nortel's UMTS access business will transfer to Alcatel.

Eventually, voice and data will converge around an IP transport. The IP Multimedia System (IMS) is the multimedia architecture that provides interoperability. IMS is widely considered to be the foundation for next-generation fixed/mobile convergence, giving network operators the ability to control and charge for a variety of services on different platforms.

Nortel's IMS system is likely to be a key piece of the Microsoft/Nortel deal. It enables a subscriber to launch a video conference during a voice conversation, or access a personalized Video-on-Demand service subscription not just from their home TV, but online from a laptop, a hotel room or from a mobile phone, for example

Microsoft and Nortel will be competing with Alcatel, as well as IBM and Cisco and Nokia and Siemens who entered a carrier infrastructure joint venture.

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