Nortel moves into software

Nortel is attempting to revamp its image with a move into software.

The decision to diversify from its hardware heritage follows several moves by Nortel this year to slim down its core functions to focus on mobility and convergence.

At a press conference in London today, Nortel's CEO Mike Zafirovski said: "People have said we are in too many areas. People think of Nortel as a hardware company but that's not how we see the future. It's going to be much more focused on the software environment."

The company partnered with Microsoft earlier this year to develop and market "unified-communications products", while selling its UMTS access business, claiming a lack of proper scale hampered the financial progress. Alcatel has agreed to buy the company for $320m while Nortel said it would focus on what it calls "4G wireless".

Zafirovski added: "There's now a lot of excitement about employment and growth. We used to be great. We are not there today. We have a plan over the next five years. It's going to be a great place to work."

Zafirovski said more than 50 per cent of revenue comes from outside the US, most of which comes from EMEA. "We have business here that even through trials and tribulations has grown over the last six years," he said.

The company announced a number of contract wins today including projects with The Daily Telegraph, The Economist and Swisscom.

Over the past two years Nortel has had to restate financial results and has been through a number of lawsuits with investors.

Last month Ciena and Nortel settled a legal spat over technology rights.

Zafirovski, 51, left Motorola to become CEO of Nortel in early 2005.