Alcatel to acquire Nortel's UMTS business for $320 million

location based services

French telecommunications equipment provider Alcatel says it plans to buy Canadian firm Nortel's third-generation mobile telephone business and related assets for 320 dollars (410 million euros).

It said the deal would make it one of the world's largest suppliers of Universal Mobile Telecommunications System (UMTS) radio access solutions, adding 14 extra customers, and supplying a quarter of the operators of the technology. Under the terms of the draft deal, "a significant majority" of employees of Nortel's UMTS business will be transferred to Alcatel, Alcatel said in a statement on Friday, adding that the deal would significantly reinforce its presence in South Korea, Italy, Spain, France and Britain. It said it had signed a non-binding memorandum of understanding with Nortel but planned to close the deal by the end of the year. UMTS allows e-mail, high-speed Internet surfing and live sound and image broadcasts via mobile phone handsets. Alcatel on Thursday said it had received an order worth 270 million euros (460 million Australian dollars, 347 million US dollars) from Australian telecom giant Telstra. Alcatel is to set up an Internet network for five Australian cities, Melbourne, Sydney, Brisbane, Perth and Adelaide.