Nortel Networks is in talks to sell its two main businesses to rivals in a sign the maker of telecommunications equipment could break itself apart rather than emerge from bankruptcy as planned, a report says.

Nortel has been able to attract interest in the sale of its core wireless-equipment business and a separate unit that builds telecom systems for offices, the Wall Street Journal reports, citing people familiar with the matter. These businesses posted $6.7 billion in sales last year.

Nortel filed for protection from creditors in January.

The Journal reports selling the wireless gear business, which generates most of the company's cash, would complicate any plans to emerge from bankruptcy as a standalone company.

Nortel declined to comment for the Journal.

Several competitors have expressed interest in buying Nortel's enterprise unit, which makes communications networks for corporations.

The newspaper reports Nortel has held talks with potential buyers including Avaya Inc., which is backed by a private-equity consortium, and Siemens Enterprise Communications, a joint venture of Siemens ( SI) of Germany and Gores Group, a private-equity firm. Cisco Systems ( CSCO) looked at the unit as well but isn't expected to bid, these people said.

Avaya, Gores Group and Siemens declined to comment.

Nortel also is in talks to sell the unit that sells wireless voice gear to rivals, including Nokia Siemens Networks, which long has sought to expand its presence in the U.S. Nokia Siemens is a joint venture of Nokia ( NOK) of Finland and Siemens.

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