The company submitted the filing a day before an interest payment of about 107 million U.S. dollars was due, according to Reuters. Nortel in November reported a 3.4 billion dollars loss in the third quarter of 2008.
Affiliates in Asia, the Caribbean and Latin America, and Nortel Government Solutions continue in ordinary course of business and are not subject to these proceedings, and the company's day-to-day operations are expected to continue without interruption, said a statement on its website.
An insider of Nortel China confirmed the statement when interviewed by Sina.com. "Daily operations of Nortel China are running as usual," he said.
Currently, 4,000 people work at Nortel China's Beijing headquarters and 1,000 more in other cities of China. Those numbers are expected to decline after the filing for bankruptcy protection.
"Talent outflow is inevitable for Nortel China. Its experienced technicians will jump to other companies for brighter futures," said Zhang Ying, vice president of Analysys International, a leading advisor on technology, media and telecom industries in China.
As to whether the filing will influence the daily maintenance of telecom equipment in China, "It depends on the ability of Nortel China at present and the agreement reached between Nortel China and its clients," Zhang said.
Nortel in November also announced the termination of 1,300 employees, or about five percent of its workforce, with 25 percent of the layoffs coming in 2008 and the rest in 2009.
Asia accounts for 13 percent of its global business income, with the Chinese market contributing 25 percent to 30 percent of that share.
But in the bid for CDMA network by China Telecom in 2008, Nortel seized 14 percent of the market share, a three percent decrease compared to 2007, while Huawei and ZTE controlled 25 percent each.
