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Ericsson sees Nortel deal closing "very soon"


Ericsson's Silicon Valley campus is seen in Santa Clara, California, August 11, 2009. REUTERS/Robert Galbraith
Ericsson's Silicon Valley campus is seen in Santa Clara, California, August 11, 2009. REUTERS/Robert Galbraith

By Tarmo Virki, European technology correspondent

HELSINKI (Reuters) - Swedish telecom equipment maker Ericsson <ERICb.ST> expects to close its acquisition of key assets of bankrupt Nortel Networks Corp <NRTLQ.PK> very soon, a senior company executive said on Thursday.

"We don't expect to see any hiccups. I think it will be closed very soon," chief technology office Hakan Eriksson told Reuters.

Last week, Nortel said the two firms had pushed the deadline for closing the deal to end-November to allow more time to satisfy closing conditions, including regulatory approvals.

The U.S. Department of Justice is still reviewing the deal, which raises Ericsson's market share in wireless network equipment in North America to about 50 percent. Canada decided in September against launching a review of the deal.

Ericsson won an auction for the CDMA and LTE assets of bankrupt Nortel in July, offering $1.13 billion for the crown jewels of the one-time Canadian telecom star.

On August 12, Ericsson had also said it expected the deal to close 'very soon.'

Ericsson has been one of the key forces making European GSM wireless technology -- a bigger rival to CDMA -- a global standard. It is also one of the leading vendors to offer next-generation LTE networks to carriers.

Among the mobile network technologies, CDMA has had a strong position in the Americas and some countries in Asia while GSM is a dominant technology elsewhere. LTE is an emerging technology with potentially universal reach, but a more natural evolution for former GSM operators than for CDMA.

So far, only a few carriers have started to build out LTE networks.

Eriksson said taking over Nortel's strong position in the CDMA business would put the Swedish company in a good position when CDMA operators look for next-generation networks, most likely LTE. Also, as a mature technology, CDMA requires minimal R&D investments.

"A lot of CDMA players will do like Verizon, move over to LTE. I think we are very well positioned in the LTE market," Eriksson said.

Ericsson won one of the first major LTE deals around -- from Verizon <VZ.N><VOD.L> in the United States -- together with Alcatel-Lucent <ALUA.PA> earlier this year.

Verizon will start rollout from switching data services to LTE, but plans to keep voice traffic on older CDMA network.

"CDMA has still many years left, especially as a voice service," said Eriksson, who was on Thursday appointed also to lead Ericsson's operations in Silicon Valley. He will be the first group level executive based in the United States.

(Additional reporting by Diane Bartz in Washington; Editing by Gary Hill)

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