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Inventing Money submits: Mike Zafirovski (pictured) had a coming out party at CTIA -- sort of. The CEO of Nortel Networks (NT) made a rare public appreance at the CTIA conference, and made some bold statements. Mike wants NT employees to be "boy scouts" who would do the right thing. I guess the Finance department is going to be outsourced going forward, since they have not been able to do the right thing for awhile now.

Mike wants Nortel to exit every business where it holds less than 20% market share. In telecom that is a tough task, which most likely will lead to Nortel exiting a bunch of businesses. By some estimates, 65% of Nortel revenues come from businesses where Nortel has less than 20% market share.

I am not a current NT share holder but losing 65% of the revenue stream is going to be one really bumpy ride. Surely all the investment bankers are drooling over what this means to their bottom lines. The bankers can line their pockets by marrying NT with others, so the combined entites can hold greater than 20% market share. Now you know why there are so many sell-siders covering NT -- it's the banking fees. And we all thought sell-side research was "born-again".

I guess Nortel shareholders are hoping that Mike can do what Jack Welch (Mike was previously employed at GE prior to MOT) accomplished at GE. But GE is a congolomerate in everything from jet engines to electric turbines; NT is a telecom equipment provider. Maybe Mike wants to make the Canadian treasure into a congolomerate?

Mike believes he can turn around NT in 3 to 5 years. Sorry, but it's a very fast changing industry where customers are gaining more bargaining power with consolidation and competition is heating up with vendors marrying each other. A 3 to 5 year transition plan might work well in McKinsey consulting slides. But given Mike's resolve to turn NT around, it's worth a shot and value players can own the stock. But it's not what I can park my money in.

NT 1-yr chart:

Source: Nortel Shareholders, Fasten Your Seatbelts (NT)