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Friday, January 16, 2009

Nortel will likely survive, but faces huge hurdles

Nortel will likely survive, but faces huge hurdles on the way to viability: analysts


Nortel Networks' corporate headquarters in Toronto. THE CANADIAN PRESS/Darren Calabrese

TORONTO - Nortel Networks Corp. (TSX:NT) will probably survive its time under bankruptcy protection, but it faces several huge hurdles on the way to becoming a viable company again, and whatever emerges from the wreckage will be a shadow of its former self, analysts say.

A day after the telecommunications equipment manufacturer filed for bankruptcy protection in both Canada and the United States, Canadians are pondering the future of the company that was once the country's most famous stock.

Whatever happens to Nortel in the long run, the process of getting there isn't going to be pretty, said Andy Woyzbun, lead analyst at Info-Tech Research Group.

Woyzbun, who advises customers of information technology companies such as Nortel, said there's a danger the company will stop spending on research and development, making it an irrelevant player in an industry that must constantly innovate.

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