Nortel

(NT)

agreed to provide financial, technical and marketing support to

Sierra Wireless

(SWIR) - Get Report

and

Xircom

(XIRC)

, as the companies work to develop third-generation wireless modems that will enable users to access the Internet through a number of digital devices.

The modems will be based on the universal mobile telecommunications system and general packet radio service standards. Both Xircom and Sierra plan to develop their own modem products. Financial terms of the agreements weren't disclosed. Xircom makes products that allow users to connect notebook and handheld computers to the Internet and corporate networks, while Sierra makes wireless data communications equipment.

Shares of Nortel were down $2.81, or 7.2%, to $36.38 in recent

New York Stock Exchange

trading. Sierra gained $1.13, or 2.3%, to $49.75, and Xircom slipped 94 cents, or 6.3%, to $14.06 in recent

Nasdaq

trading.