The main figures that WiMAX equipment maker Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR) today disclosed when its published its financial report for the fourth quarter and full-year of 2008 were already known, because Nortel Networks Corp. (NYSE; TSX: NT) abrogated the companies' joint mobile WiMAX agreement last week. As a result of Nortel's seeking bankruptcy protection, Alvarion was unable to recognize $2.4 million in sales to the company.
Today, Alvarion outlined how it will deal with Nortel's collapse. One measure has already been put in place: a 10% graduated cut in monthly salaries of over NIS 8,000.
Alvarion president and CEO Tzvika Friedman said, "Nortel's departure from the WiMAX market is related to the company's financial troubles. In the long run, the damage to Alvarion from the cancellation of the cooperation agreement will be slight. Nortel was supposed to bring us business and income, but today we're in a different position from where we were when we began working with them. We're strong and we can win customers on our own, with or without another partner.
"A second issue is the financing that Nortel was supposed to transfer to Alvarion for R&D expenses, and which no longer exists. We won't forego a penny that Nortel owes us, but it will be a long process."
The salary cut is aimed to partly offset the lost money from Nortel. Friedman said that the salary cut would prevent more layoffs. Alvarion fired a tenth of its workforce, 110 employees, in late 2008.
Published by Globes [online], Israel business news - www.globes-online.com - on February 4, 2009
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