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Nortel shuts UK WLL plant

A vote of no confidence in Ionica's prospects?

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The saving grace for the UK government of Nortel's closure of a factory in Devon is that it can't be blamed on the Asian crisis - not directly, anyway. The company announced it was shutting the Paignton plant with the loss of 586 jobs yesterday, adding to a series of closures and job cuts overseas manufacturers have made in the UK in the past few months. But in Nortel's case the problem is more likely to have been caused by the troubles of its UK partner, Ionica. Ionica is cash-strapped, and has been having trouble with the rollout of a domestic telephony system based on Nortel's Proximity Wireless Local Loop technology. The Nortel Paignton plant was involved in Proximity, and its closure therefore suggests that Nortel, which in the past has declined to mount a rescue for Ionica, doesn't think matters are going to improve. Deployment of WLL systems has also been hit internationally though, as financial problems in the Far East, and now, Eastern Europe, has savagely reduced governments ability to invest in new systems. WLL is frequently presented as a cheap way for developing countries to deploy telecoms infrastructure, but in many cases right now it's not cheap enough. ®

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