Nortel Networks Corp., which is operating under court protection from creditors, announced a deal Friday to sell most of its wireless business for $650 million US and said it's in advanced talks to sell the rest of its operations.

The deal was struck with Finnish telecommunications company Nokia Siemens Networks and is part of the winding down of a company that has a 127-year history in Canada.

Nortel president and chief executive Mike Zafirovski said an orderly sale of the Toronto-based telecoms equipment maker is the best way to preserve value.

"We really believe the best outcome for that is selling our businesses to drive consolidation in the industry," Zafirovski said in an interview late Friday.

"We believe that the best outcome to optimize value and to preserve the other very significant assets is an orderly sale of our businesses."

Zafirovski, who said earlier this year he wanted to restructure and preserve Nortel as a stand-alone company, said it's already in advanced talks for the sale of the other parts of the business.

That process will happen in a matter of weeks and months, Zafirovski said.

Shares delisted from the TSX

Nortel also said it will ask to have its shares delisted from the Toronto Stock Exchange, where Nortel once accounted for more than a third of the value of all the companies listed.

When the company filed for protection under Chapter 11 of the U.S. bankruptcy law and the Companies' Creditor Arrangement Act in Canada, it said it planned to restructure as a more focused company.

Nortel's predecessors have been in business since 1882, growing from making telephones for its former Bell Canada parent company to network technology through aggressive — but ill-fated acquisitions — in the United States.

However, Nortel has faced a variety of troubles since the tech bubble burst in 2000 — including accounting problems that devastated its stock and led to criminal charges against former executives.

Most recently, the slumping economy squeezed orders from its phone company customers and ate into its revenues, contributing to mounting losses. Last year, the company lost more than $5 billion US, and it continued to produce red ink and tumbling revenues this year.

Nokia Siemens to keep at least 2,500 employees

The sale of the wireless business to Nokia Siemens includes a provision that at least 2,500 employees have the opportunity to continue working with the buyer.

Susan Spradley, head of North America for Nokia Siemens, said the acquisition will be complementary to its current operations.

"The relationship and customer base that they have is tremendous, and we're very excited to expand our relationship with some of those customers even deeper," Spradley said.

"And, of course, we have the R&D teams that we consider some of the best in the world, and while we have competed against them in the past, we are very excited to have them part of our team going forward."

The agreement is a "stalking horse" bid that will allow another buyer to possibly make a better offer.

Nortel's net loss for the three months ended March 31 was $507 million US or $1.02 US per share, compared with a year-ago loss of $138 million US or 28 cents per share.

Overall revenue fell to $1.73 billion US, down 37 per cent from $2.76 billion US.

Last month, Nortel announced plans to sell its majority stake in LG-Nortel, a Korean joint venture formed in 2005 with LG Electronics.

Nortel employed 90,000 people in mid-2000 and was once Canada's most valuable corporation, but it got caught up in the tech-bubble and later accounting scandals that destroyed companies such as Enron, WorldCom and others.

Shares in the company, which announced the sale after the close of markets Friday, were unchanged at 18.5 cents on the TSX.