Investors Fretting Over Nortel's Wireless Marshall Plan

Not content to bankroll cash-starved telco upstarts on this continent, Nortel (NT Quote) is racing to finance construction of next-generation wireless networks in Europe.

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With hundreds of billions of dollars of equipment sales at stake, global wireless network construction offers a tremendous opportunity for Nortel. As growth in the company's core optical-networking business tapers off, Nortel could use another fast-revving engine. Thus the company's decision over the next year to more than triple, to as much as $3.7 billion, its lending commitments to customers.

But to some observers, boosting lending to cash-strapped phone and Internet service companies smacks of desperation. Several analysts and investors say Nortel, Lucent (LU Quote) and Cisco (CSCO Quote) are simply trying to pump up sales in the face of a broad telecom-gear spending slowdown. Offering cash to customers is one way to keep demand growing. ...