If things keep going the way they are right now, soon there won't be any North American options available when the next developing market needs to install current-generation cell phone infrastructure.

Today, Canadian communications specialist Nortel Networks (NYSE:NT) announced that it will sell its Universal Mobile Telecommunications System (UMTS) operations to French counterpart Alcatel (NYSE:ALA). In a conference call about the deal, management explained that the segment contributed less than 10% of the company's revenues, and Nortel is trying to narrow its operations down to what the company does best. It made more sense to hand UMTS over to Alcatel, which has a strong interest but a small presence in that technology, rather than trying to build a marginal division into the market leader Nortel wants to be.

UMTS is a high-bandwidth third-generation (3G) technology capable of downloading data at nearly 2 Mbit/s. It's in wide use in Japan and across Europe today, thanks to rollouts by NTT DoCoMo (NYSE:DCM), Vodafone (NYSE:VOD), and Deutsche Telekom's T-Mobile. Here in the States, AT&T (NYSE:T) and BellSouth (NYSE:BLS) joint venture Cingular launched UMTS services in 2004, but coverage remains spotty, there are bandwidth issues to contend with, and I can't blame Nortel for wanting to work on future 4G solutions instead. North America represents more than half of the company's sales, and the combined GSM and UMTS segment isn't profitable for Nortel today.

Alcatel is on quite the spending spree, on the other hand. Shareholders next week are widely expected to approve a proposed merger between the French telecom giant and American rival Lucent (NYSE:LU) -- the artist formerly known as Bell Labs. The resulting company still only ranks as the third-largest phone network equipment supplier in the world, after market leader Ericsson (NASDAQ:ERIC) and a joint venture combining the relevant divisions of Nokia (NYSE:NOK) and Siemens.

Like I said, it's becoming difficult to find a red, white, and blue telecommunications infrastructure maker these days, unless you count the telecom division of Cisco. But Alcatel's French flag flies the same colors, and I suppose that's close enough.

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