By Ronald James P. Panis
Computerworld Philippines
July 22, 2009

Nortel has announced a strategy shift in its distribution structure by appointing the Westcon Group as its regional distributor for Thailand, Vietnam and Philippines. Nortel noted that the agreement sees Westcon offering the former’s complete enterprise portfolio and taking over responsibility for the entire core channel functions traditionally delivered by Nortel.

However, director for Philippines, Thailand and Vietnam distribution Armando Pascual stressed that “[the] shift in the distribution model is not a result of the Chapter 11 filing” Nortel’s parent company made last January 14.

“This has been a plan prior to that. We would have gone the same direction [– even without the Chapter 11 filing]. We believe this is a very good strategy,” Pascual emphasized.

Among the endeavors Nortel initiated after the Chapter 11 filing is restructuring the organization. Pascual noted that Nortel has transformed its enterprise business (which includes its PABX, network equipment, unified communications, etc. that Avaya is bidding for), wireless carrier business (consisting of CDMA and long term evolution or LTE), and the optical business or Metro Ethernet Networks into three big divisions acting as independent companies.

With the three said divisions standing on its own, Nortel has received bids for two of the three. Pascual indicated that Nokia Siemens offered a $650M bid last June 19 for Nortel’s CDMA and LTE businesses. Avaya presented its offer on the enterprise division recently.

“Ever since [January], we have tried various options to get out of Chapter 11… We want to be out of Chapter 11 in less than a year,” he explained, citing how General Motors – another major company that filed for bankruptcy this year – was able to get out of it after a record-breaking feat of 40 days.

Nortel expects Nokia Siemens to conclude its proposal sometime next week. Under Chapter 11’s Stalking horse process, Pascual said that the bidder will have 40 days to file the necessary papers and all other regulatory requirements across US, Europe and Canada (places where Nortel filed Chapter 11) and wrap up this deal. That is if no other company presents a higher counteroffer.

Pascual expects Avaya to undergo the same process that Nokia Siemens is going through. “Though we are going through this selling process, let me assure you that Nortel is committed to continue its business within these 40 days. There will be no interruptions; we will keep selling to our customers and partners, and provide support,” the executive assured.

Pascual meanwhile lauded the Westcon partnership as strategic. “Westcon’s strengths shows why we have chosen them for this endeavor,” he said.

Recently appointed executive vice president for the Asia Pacific region for Westcon Group Wendy O’Keeffe opined that the agreement between Nortel and Westcon highlights the long-standing and reliable relationship between the two. Westcon has been a global partner of Nortel for over two decades now.

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