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Nortel Snubs RIM as Tensions Heat Up in the True North

RIM isn't happy about Nortel's wireless sell-off and is telling the world about it.





took another couple of


this week with


$475 million

bid for the company's enterprise solutions business and revelations about

Research In Motion's


attempt to buy the firm's wireless division.

Finnish firm

Nokia Siemens Networks

agreed to

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part of Nortel's wireless business for $650 million last month, although RIM is now complaining that it didn't get a fair shot at the assets.

"RIM was told that it could only be qualified

as a bidder only if it promised not to submit orders for other Nortel assets for a period of one year," the company said, in a statement. "Despite repeated efforts, Nortel, and its advisors and its court-appointed monitor have rejected repeated attempts to engage in meaningful discussions."

Intriguingly, RIM would have been prepared to pay around $1.1 billion for Nortel's Code Division Multiple Access (CDMA) and Long Term Evolution (LTE) businesses, and certain other assets, exceeding Nokia's bid. The Canadian handset giant also played the patriotism card in describing its dealings with Toronto, Ontario-based Nortel.

"RIM is extremely disappointed that Nortel's world-leading technology, the development of which has been funded in part by Canadian taxpayers, seems destined to leave Canada," said Jim Balsillie, RIM's co-CEO, in a statement. "RIM remains extremely interested in acquiring Nortel's assets through a Canadian ownership solution."

The Waterloo, Ontario-based firm also urged the Canadian government to closely monitor the sale, warning that the loss of Nortel's intellectual property could even have national security implications.

Nortel has not yet responded to a request for comment on RIM's complaints from

Mike Abramsky, an analyst at RBC Capital Markets, says that the Blackberry-maker is primarily interested in Nortel's core CDMA/LTE technology.

"While not core to RIM's business model, the infrastructure business may be operated at break-even, possibly subsequently sold," he wrote, in a note released Tuesday. "This bid appears consistent with RIM's larger IP strategy to build a strong IP portfolio to defend against potential threats."

The analyst feels that RIM is appealing directly to Nortel shareholders in the hope that they will pressure the firm to re-engage with the handset maker ahead of Friday's asset auction.

RIM's ruckus came just hours after Nortel announced Avaya's bid for its enterprise business, which sells networking gear to businesses.

In a statement released yesterday, the two firms said that the deal was for "substantially all" of the assets of the Enterprise Solutions business, although at least one analyst voiced her concern.

"Although good news that we finally see the end of the uncertainty around the future for Nortel Enterprise, it leaves a great deal of customers in limbo, trying to figure out still, just what stays and what goes," wrote Vanessa Alvarez, an analyst at Frost & Sullivan, in an email to

. Furthermore, these are two legacy vendors coming together, integration of these two companies will take some time, and will leave them vulnerable."

Avaya CEO Kevin Kennedy promised to protect the investments of both Avaya and Nortel customers, in a statement released Monday. "This is a strategic opportunity to acquire talent and complementary assets that position the combined company for growth and success," he said.

These sentiments were echoed by Nortel CEO Mike Zafirovski. "If successfully completed, this transaction will provide clarity on the path forward for our enterprise customers, partners and employees," he explained, in a statement.

The transaction, however, is subject to a competitive bidding process and requires the approval of the U.S. Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice.

Nortel's carve-up follows a turbulent period in the company's history marked by a major accounting scandal, slumping sales and a management overhaul.

The troubled equipment maker, which has been in Chapter 11 since earlier this year, recently announced plans to liquidate, signaling the beginning of the end for the 127-year-old company.

Not so many years ago, Nortel was part of a pantheon of telecom equipment providers that included


(CSCO) - Get Cisco Systems, Inc. Report

, Alcatel and Lucent. The firm was one of the top suppliers to the Internet building boom at the turn of the century but was later crushed after the bust when the industry was left with an oversupply of telcos and network capacity.