Insolvent telecom equipment maker Nortel Networks Corp. started the auction for its optical networking and carrier ethernet business on Friday morning, with Nokia Siemens Networks joining the fray.

A source familiar with the process confirmed that Nokia Siemens, a joint venture between Finland's Nokia Corp. and Germany's Siemens AG was the second bidder in the process.

Nortel has started the auction for its optical networking and carrier ethernet business. (Fred Chartrand/Canadian Press)

U.S.-based Ciena Corp. has already made a $521-million US bid for the assets, which include some of Nortel's most prized business units, intellectual properties and employees.

Bankruptcy court judges in both Delaware and Ontario gave the "stalking horse" bid a green light in mid-October.

Earlier this week, Nortel spokesman Bo Gowan confirmed that another bidder had emerged, though he declined to name the company. The auction process allows companies to remain anonymous.

The Nortel Timeline:

The sale of Nortel assets will still require court approvals once a winner is determined. The company will likely appear before a judge next week, though a date has not been set.

The former Canadian technology heavyweight, has been selling off its divisions after filing for creditor protection in January.

In July, Nokia Siemens lost a chance to acquire Nortel's wireless network business when LM Ericsson of Sweden agreed to pay $1.13 billion for the business, well above the $650-million bid Nokia Siemens put forward.