Nortel Networks will focus on a massive restructuring plan in its Asia-Pacific operations following news that the troubled network-gear maker filed for bankruptcy last week.
In a statement on Monday from Nortel's Asia-Pacific headquarters, the company said it "has initiated a business and financial restructuring process to strengthen the business for the long-term".
The statement also said "this is a solution that will allow Nortel to deal decisively with its cost and debt burden, to effectively restructure its operations and to narrow its strategic focus in an effective and timely manner".
The company, burdened by bond debts, is reportedly considering "shredding" some of its business units to remain afloat.
But the statement from the Asia-Pacific headquarters said: "Nortel is still very much in business and we will continue to be 100 percent focused on driving results for all of our stakeholders".
Reports said Nortel, saddled by debts amid a slowdown in sales from its major markets, filed for bankruptcy protection in the US, Canada and Europe, in an apparent effort to "save" some of its business.
The bankruptcy filing came a day before the firm was due to make an interest payment of about $107m, reports also said.
As expected, Nortel shares took a dip following the news.
Major markets for Nortel, such as the US and Europe, have considerably slowed down due to intensifying competition, the reports also said.
Gavin Graham, director of investments at BMO Asset Management in Toronto, was quoted in a Reuters report as saying "it's obviously a remarkable transformation from where it was as the largest company in Canada worth about 35 percent of the [Toronto Stock Exchange] in 2000".
"But this is a reflection of the way that the telecommunications industry has changed." the analyst added, according to Reuters.
Nortel is facing tough competition from virtually all regions.
In Asia, the company faces formidable rivals in Huawei and ZTE, while Alcatel-Lucent, Ericsson, and other network equipment makers continue to compete with the firm.
Philippines operations
In the Philippines, meanwhile, the company remains mum on the issue.
In its latest press conference in December, Nortel Philippines reported that the company continues to be "liquid".
It also disclosed plans to offer new network technologies for large Philippine enterprises, a major contributor of its business.
Mandy Pascual, Nortel Philippines country manager for enterprise, said Nortel will focus on large enterprises, particularly on applications based on telepresence.
Pascual said although there are no telepresence installations in the Philippines yet, the large companies including telecommunications providers, business process outsourcers (BPOs), multinationals and others are seriously looking at the technology.
The ongoing global economic crunch, Pascual said, could be one of the catalysts for telepresence to take off in the Philippines, as companies look for long-term products for cost-savings in their respective operations.
The executive said actual telepresence installations in the Philippines may be seen in "one to two years" from now.
Talkback
Call me a pessimist but talk of 'strengthening' a financial position alongside the 'shredding' of business units does not sit comfortably.
Once valued at USD 251 billion, Nortel is now worth closer to USD 156m and has cut its workforce by over 75% worldwide.
Although it is facing tough competition on all fronts - Nortel struggled to recover from the after-shock of the bursting of the dotcom bubble. I remember seeing a major Nortel TV ad campaign during primtetime evening around 2001-2002 - a friend commented - 'who are Nortel and why on earth should I care?'. It was a classic slick corporate campaign that summed-up the inflated hyperbole attached to tech companies at the time. Nortel were not alone in making the assumption that they could 'afford' to raise their public profile - fortunately most of the others simply had their marketing fingers burnt rather than sliding down the corporate ladder.
So what next? - an article in the Economist speculated that they would be broken up and sold in parts to rivals (Huawei were mentioned as one potential buyer).
Is this an ominous warning for other tech companies? possibly but others that recovered from the dotcom bubble seem to be steadier in these rockier times, and the tech and telecoms sectors are still being touted as defensive whilst banks, retailers and builders are battered.