Nortel gasps for breath after a decade of setbacks

By Susan Taylor

OTTAWA (Reuters) - Once the prize jewel in Canada's corporate crown, Nortel Networks Corp has finally taken refuge in a bankruptcy filing after years of struggling to catch up with a fast-changing industry.

A corporate icon with roots as old as the telephone itself, Nortel made prescient wagers on wireless and fiber-optic technology to become the country's biggest and most talked-about stock during the dot-com boom years.

But shares of the one-time high-tech titan, worth more than C$1,100 apiece in mid-2000, had been relegated to penny-stock status by the time Nortel announced its Chapter 11 filing on Wednesday.

"It's sad to see a Canadian flagship going down," said Amit Kaminer, an analyst at telecoms consultancy Seabord Group.

"It's going to be lonelier at the top for Research In Motion," the Ontario-based maker of the ubiquitous BlackBerry smartphone.

At its peak in 2000, Nortel reported about $30 billion of annual revenue and had a market capitalization of $250 billion.

Nortel, by far Canada's biggest R&D spender in fiscal 2007 with a $1.85 billion budget, owns a sprawling 2-million square-foot research campus in the Canadian capital of Ottawa and it's the city's largest private-sector employer.

But it has struggled to keep pace with game-changing shifts in a sector rocked by consolidation, low-cost Asian rivals and a sharp slowdown in spending by customers.