What Will Become of Canada's Hi-Tech Market After Nortel?

Even though Nortel (NRTLQ.PK) talks about “restructuring”, it is becoming increasingly apparent that Nortel is going to be sold off in chunks to the highest bidders - something that would be a sad day for Nortel’s long history and Canada’s high-tech economy.

The question that needs to be asked if what happens after Nortel disappears? How are thousands of jobs replaced? Where do entrepreneurs gain the experience they need before striking off on their own? Who’s going to fuel Canada’s R&D spending and innovation?

Part of the answer could be people such as Terry Matthews, who has been a driving force within Canada’s telecom market for the past 35 years (Newbridge Networks, Mitel, et al).

At a time when many long-time entrepreneurs would be stepping away from the fray, the 65-year-old Matthews is still enthusiastic about getting involved in start-ups.

According to a story in the Ottawa Citizen, Matthews is actively investing in start-ups and young entrepreneurs. This is the kind of activity required to fill the huge void that Nortel is going to leave behind in a city that has been home to thousands of Nortel employees and, as important, jump-started the telecom ecosystem for decades.

Of course, Matthews can’t do it alone. There needs to be a lot of other moving parts - investors, entrepreneurs, mentors, government support - to spark life After Nortel (aka AN).

By the way, the Ottawa Citizen has been providing some terrific coverage of Nortel in recent weeks. If you’re looking for perspective on Nortel’s struggle, Bert Hill and James Bagnall are offering it in spades.

Comments

[LocoMotion]

I read this Sunday May 10th.... why the reprint with a changed date and on the day Nortel is due to report firts Q earnings?

2009 May 11 08:38 AM

[captainccs]

Old Ma Bell was a government sponsored monopoly that thrived by gouging the public with the benediction of government appointed regulators. The rules were simple, Ma Bell could only charge based on the cost of operating the system. Ergo, the more expensive the system, the more Ma Bell could charge. Nortel and Lucent would invent and build the most outrageously expansive systems they could so that Ma Bell could gouge the pubic as deeply as possible. Nortel and Lucent were anti-market monstrosities.

Nortel is NOT and was never a hotbed for hi-tech. It was a monster and I, for one, am glad the market has finally killed it off.

If you have any doubts about my story, compare telephony rates before Judge Green broke up Ma Bell with today's rates. Do you think under Ma Bell there would ever have come into existence a Blueberry or an iPhone?

2009 May 11 09:07 AM

[InTheRoundEye]

Nortel is the second largest patent holder in the US, following IBM at number one, so I would say your mistaken.

Regarding deregulation, which no doubt has been great for the consumer, take the arilines for instance, it used to cost $2000 to fly from LAX to JFK, that same ticket can now be purchased for $300.

From a cost perspective that's great for us as consumers, however now we have seen the number of air carriers shrink by almost half, most have filed for bankruptcy three times or more.

Basically the same has happen with telcos since deregulation, SBC was able to reacquire Bell South, Ameritech, Bell Atlantic, Southerwestern Bell, and AT&T. Our anti-trust officials did a great job with this one.

Again great for consumers, bad for business.


On May 11 09:07 AM captainccs wrote:

> Old Ma Bell was a government sponsored monopoly that thrived by gouging
> the public with the benediction of government appointed regulators.
> The rules were simple, Ma Bell could only charge based on the cost
> of operating the system. Ergo, the more expensive the system, the
> more Ma Bell could charge. Nortel and Lucent would invent and build
> the most outrageously expansive systems they could so that Ma Bell
> could gouge the pubic as deeply as possible. Nortel and Lucent were
> anti-market monstrosities.
>
> Nortel is NOT and was never a hotbed for hi-tech. It was a monster
> and I, for one, am glad the market has finally killed it off.
>
> If you have any doubts about my story, compare telephony rates before
> Judge Green broke up Ma Bell with today's rates. Do you think under
> Ma Bell there would ever have come into existence a Blueberry or
> an iPhone?

2009 May 11 10:13 AM