The head of Nokia Siemens Networks' North American operations says her company has the international scale to make Nortel's Ottawa research operations a hub of innovation again.
If Nokia Siemens wins its bid to buy most of Nortel Networks Corp.'s wireless business, the Ottawa research and development group will become a "global centre of excellence" that will focus on the newest "4G" wireless technology, Sue Spradley told The Globe and Mail's editorial board yesterday.
"For Canada to remain at the forefront of technology ... [Nortel]has got to be in the hands of somebody who can invest the dollars [and]who can ... push and grow," she said. "We believe that Canada has incredible R&D skill sets."
Last month, Nokia Siemens signed a deal to buy most of Nortel's wireless business for $650-million (U.S.), although bidding is open to others until July 21. A formal auction will begin on July 24. The Nokia Siemens offer has been supported by the federal agency Export Development Canada, which agreed to provide a $300-million credit facility.
Nokia Siemens said it will keep about 2,500 Nortel employees worldwide, with about 800 of the jobs in Canada, if it wins the contest. Of those Canadian positions, about 400 to 500 are in the Ottawa research facility.
Ms. Spradley, who spent 18 years at Nortel earlier in her career, said Nokia Siemens wants to plug into Ottawa's "silicon valley" atmosphere, where entrepreneurs and university researchers link with the large research facilities in the area. Nokia Siemens' presence could help draw venture capital to the region, and the company would likely work with universities in the area, she said.
Links with government and universities are much more likely to happen if a global player like Nokia Siemens - a wireless equipment joint venture of Finland's Nokia Corp. and Germany's Siemens AG - wins Nortel's assets, rather than a private equity player, Ms. Spradley said.
"We're not doing this to get the money out. For us, this is a very complementary acquisition."
Those employees who are still with Nortel's research operations are also much more likely to prefer a bidder like Nokia Siemens to a private equity player who might just hang on until another buyer picks up the assets, she added.
"If you are an R&D expert sitting in the Ottawa lab ... I'll postulate that you'll feel a little safer with somebody who already has R&D investments ... and who will let you take your stuff and run [with it]"
Still, she acknowledged that the key consideration in the sale of Nortel assets will be the benefits that flow to the company's creditors. "At the end of the day, it is a cold-hearted, money-oriented world ... ."
The Nortel assets would give a significant boost to Nokia Siemens' North American business, pushing it into the No. 2 or No. 3 spot in the wireless equipment sector, Ms. Spradley said.