Nortel's Carling Avenue campus

Nortel is forming a new joint venture with China-based Huawei Technologies to develop ultra broadband access solutions for markets around the world.

The venture will be based in Ottawa. It will be focused on product enhancements for Huawei's current broadband access portfolio and the development of a new ultra broadband product portfolio. The portfolio will be sold exclusively to Huawei and Nortel as channel providers.

Nortel spokesperson Ann Fuller says the company chose Ottawa as the headquarters for the joint venture because of the depth of research and development talent in the city.

The exact number of employees who will be assigned to the venture has yet to be determined, but Ms. Fuller says no jobs will be eliminated.

The two companies have also entered into a supply agreement that allows Nortel to immediately begin supplying customers with Huawei's broadband access portfolio.

"Nortel is focused on seizing opportunities that will generate new revenue and expand operating margin. This joint venture is a bold opportunity to combine the strengths of Huawei and Nortel into a company that can aggressively target and win share in the rapidly expanding ultra broadband market," says Nortel president and CEO Mike Zafirovski. "This will create a powerful new player in what is a high growth market."

Nortel and Huawei say they expect to complete the formation of the joint venture in the third quarter of 2006. Joint development of products has already begun, with availability expected for all markets by the third quarter of 2006.

The new company will combine Huawei's broadband access solutions with Nortel's voice and broadband networking technologies to create a new product portfolio designed to be a leader in the industry in value and performance. The companies say these products will give service providers the ability to converge the delivery of voice, video, data and wireless services to business and residential customers onto a common IP platform that supports copper, fibre and fixed wireless networks.

Huawei is a global telecom equipment maker, with products deployed in over 100 countries around the world.