LG, Nortel to enter telecoms deal

SEOUL: South Korea's LG Electronics Inc. said it has agreed to set up a telecoms equipment joint venture with Canada's Nortel Networks Corp.

The move is part of a strategy by Nortel to seek out new areas of growth and should also allow LG to improve its relatively low margin business and cut down on the burden of future investment.

LG, the world's fifth-largest mobile phone maker and a small player in telecoms infrastructure, had said in September it may sell its telecom equipment business or set up a joint venture with a foreign partner, such as Nortel or Frances's Alcatel.

Nortel will own 50 percent plus one share in the joint venture and LG the rest, the Korean firm said in a statement.