Officials at Nortel Networks Corp have announced that they’re discontinuing their mobile WiMAX (News - Alert) business and terminating a joint agreement with Israel-based Alvarion Ltd, saying the move will allow the company to narrow its focus, better manage its investments and strengthen its broader carrier business.

 

According to Richard Lowe, the president of carrier networks at Nortel (News - Alert), the company is working with Alvarion to transition its mobile WiMAX customers over and assure them that they will continue to benefit from “leading-edge technology and high-quality service.”

 

“Our continued success in the wireless business requires us to focus our energy on opportunities with long-standing customers,” Lowe said. “This will position Nortel more effectively to capitalize on future resurgence of carrier spend levels and drive value to the business.”

 

As TMC (News - Alert) President Rich Tehrani mentions in his blog, the news from Toronto-based Nortel comes as a further blow to WiMAX and follows an earlier analysis today about the difficulty WiMAX is having in a slow global economy.

 

For Tehrani, the question is: When will WiMAX make money for vendors or carriers if so many companies are pulling away from the standard?

 

“After all, will new wireless carriers migrate to WiMAX while equipment providers are visibly pulling out?” Tehrani writes. “All the signs point to LTE (News - Alert) becoming a strong standard with WiMAX becoming a niche play. Moreover, in today’s device-happy world with touch-screen devices allowing consumers and business people to surf on the go, who wants a fast network which doesn’t have broad device support?”

 

Yet Tehrani doesn’t think it’s over for WiMAX yet. If RIM or Apple adds WiMAX support to a popular device, he said, the indsutry could see the market momentum shift. But service providers can’t turn on a dime when they are deploying equipment. There is a tremendous expense they need to absorb in switching between WiMAX and LTE.

 

“Certainly this news just makes it more difficult for wireless providers to determine which standard to use and at next week’s 4GWE show in Miami, I look forward to discussing these issues with you in detail,” Tehrani said.

 

Tzvika Friedman, president and chief executive officer at Alvarion (News - Alert), said his priority is to minimize the effect on customers.

 

“We will work closely with Nortel to ensure that the transition will be as smooth as possible,” Friedman said.