Nortel closes CoreTek tunable laser division
Like other players in the industry, Nortel has suffered from drastically reduced carrier spending in the telecom sector. Back in July, the company announced layoffs totaling 3500 employees and put its optical components group up for sale. More recently on September 25, the company said its third-quarter revenue in 2002 was expected to fall by about 15% compared with the second quarter.
At the same time Nortel announced a plan to consolidate its shares (which fell to $0.50 on September 26, the lowest level for more than 20 years) in order to avoid being delisted from the New York Stock Exchange. At the time of the CoreTek deal, Nortel s shares were priced around $119. Today, the all-share deal would be worth just over $6 million.
CoreTek s tunable laser employs a VCSEL with a movable MEMS mirror to provide both high power and tunability for bandwidth provisioning in all-optical networks. Also, Nortel was one of the first companies to develop its own tunable DFB laser technology.
Despite some recent positive news for tunable lasers, with orders for Agility and others, market demand for these devices has failed to match predictions. Nortel spokesman David Chamberlin commented that the CoreTek technology "obviously has a very advanced functionality that is far ahead of the current market demands." He said Nortel will continue developing and selling lasers, but will focus on products which have a more immediate market opportunity.
Rumors are widespread that Nortel is on the verge of selling its optical components business for $50 million, and Bookham Technology has been mentioned as a potential buyer. In summer 2000, Nortel was preparing to spin off its optical components business in an IPO that would have had a value of around $100 billion.
One possible reason for closing the CoreTek plant at this time is that the potential buyer does not want CoreTek s technology. When Bookham acquired Marconi Optical Components, it also gained the company s digital supermode DBR tunable laser technology.
