Nortel’s LTE Patents Could be Auctioned by End of Year; Nothing Set

As most keen observers of the situation know, Nortel has yet to sell its LTE patents.

During the next 15 years, Nortel’s LTE patents could be worth from $915 million to $2.9 billion, according to calculations from JP MorganChase analyst Ehud Gelblum. (The estimate varies depending on the royalty rate ascribed to the patents.)

Even at the lower end of that range, the patents would have considerable strategic and financial value, which is why they are eagerly sought by RIM, Ericsson, and perhaps a few other players that have yet to declare their intentions. It’s also why so many interested and disinterested observers want to know how and when Nortel will dispose of them.

Earlier today, I asked Jay Barta, a Nortel spokesman, whether he could specify a date by which Nortel will auction off its LTE patent portfolio.

His first reply to me was surprising, because he didn’t explicit state that an auction would occur. Instead, he wrote the following:

“I can’t speculate. We’ve said that we are looking for buyers, but I can’t speculate beyond that. When/if we have a buyer we will announce via press release.”

That’s odd, I thought. Given the interest that’s been expressed in the patents from more than one quarter, not to mention the value attributed to them, one would assume Nortel would auction them off. After all, that’s the course it has followed in selling its other major business assets.

I asked Barta to confirm that the patents would be sold at auction. I also asked when we might expect the sale to take place. He replied that the patents would likely be sold at auction, though there’s no guarantee “it will play out that way.”

He also said Nortel doesn’t have an announced sales date, auction process, or staking-horse bid for the LTE patents. He said an announcement will be made when more is known and the plans are set.

The Ottawa Citizen’s James Bagnall, who has provided exemplary coverage throughout the Nortel saga, informed me via email that Lazard, Nortel’s investment banker, has told prospective bidders the patents could be sold by yearend. Bagnall cautioned that the timetable could slip.

For those of you interested in new developments related to the LTE patents, that’s all I can offer for now.

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