Thank you.
Mr. Chair, honourable members, deputy minister, colleagues, and friends, thank you for inviting me to join you today. I am president and co-CEO of Research in Motion Limited. I founded RIM with my friend Doug Fregin while we were still students. This year we are celebrating the 25th anniversary of RIM and the 10th anniversary of our flagship product, BlackBerry.
After 25 years of building a global technology company, I know the wireless telecommunications industry extremely well. This includes the suppliers of wireless network infrastructure. It is not widely known, but in addition to building great smart phones, RIM owns and operates one of the world's largest Internet protocol networks connecting to more than 400 networks globally. As a result, Nortel is well known to me and at one point was even a strategic investor in our company, so I was especially saddened by Nortel's demise. What was once Canada's crown jewel in technology failed as a business and is now being chopped up and sold off like so much cordwood.
As in most failures of large companies, the mistakes that led to Nortel's insolvency were made many years ago. Only recently did the company run out of business momentum, but by the time there was serious talk of saving Nortel last year, it was far too late to save it in its current form. A global financial crisis and its huge debt load were the final straws.
None of this is meant to suggest that Nortel was not then or is not now of value. To be sure, Nortel has a few operating divisions with good business prospects and, more importantly to Canada, a collection of intellectual property and teams of great researchers who produced it. The teams and intellectual property were built up over many years, and much of that occurred right here in the Ottawa area.
Some of the IP is associated with Nortel's legacy businesses and will be of little value over time. However, Nortel's intellectual property and workforce devoted to next-generation wireless research known in the industry as LTE, or long-term evolution, is nothing short of a national treasure that Canada must not lose.
Let me tell you why LTE is so important. LTE is by far the most widely supported architecture for the next generation of wireless networks. LTE will provide faster data speeds and better customer experiences than current networks today. This will enable governments and the private sector to deliver more and better services over wireless networks, including those required in times of national emergency and crisis.
LTE will also be a very big commercial opportunity for the entire industry, including infrastructure suppliers, handset manufacturers, and application developers. Bell, Telus, and Rogers have all announced plans to deploy LTE when it becomes available. So too have Verizon wireless, AT&T, Vodafone, and many others internationally.
There has been a lot of speculation that RIM's primary interest in Nortel's assets is its LTE research workforce and intellectual property. I can confirm that this is true. In fact, we were engaged in intense negotiations with Nortel over a number of months to acquire a number of LTE assets and associated research staff. These discussions started before Nortel filed for bankruptcy protection in January, and it continued with an expanded scope afterwards.
We at RIM want to continue the legacy of Nortel's great LTE research personnel by combining their next-generation wireless work with our own and integrating them with our R and D division. If we are able to do this, the ability to commercialize LTE products in the future will remain in Canada with a Canadian global leader.
As experience shows, in our industry and others the most important research programs are performed in close proximity to headquarters of global leaders, and the overall impact of such research is greatest in countries whose companies retain the rights to commercialize the resulting discoveries. That impact is measured not only in jobs, exports, and earnings, but also in spinoffs, community investments, and philanthropic support of education, health, social services, and the arts.
How our discussions with Nortel failed to produce a good outcome for RIM and for Canada is another sorry story in the debacle that is Nortel. Suffice it to say that Nortel failed to bargain in good faith and failed to honour promises made to RIM on many occasions. Without regard for these promises, Nortel made deals with Nokia Siemens Networks and then with Ericsson that render Nortel's assets in LTE of limited value to RIM or to any other firm.
When we later tried to enter the auction for the entire wireless division in an effort to preserve the value of these assets, Nortel delayed and demanded a condition that would have prevented RIM from offering to acquire the important LTE assets. This condition was irrelevant to the other bidders but not to RIM. I simply could not agree to it.
Those of you who have visited me in Waterloo will remember the model Avro Arrow that always sits on my desk. By sheer coincidence, this year is the 50th anniversary of the cancellation of the Arrow program. Whatever anyone may think, good or bad, about the decision to cancel, one fact is clear. The failure to salvage the valuable intellectual property and to maintain the workforce from the abandoned project was a strategic error. By discarding the intellectual property and dismissing the workforce, Canada threw away a significant beachhead in the future of aviation that could have benefited our citizens for many generations to come.
Fifty years later, we consider the disposition of another beachhead built by Canadian ingenuity. Let us learn from our history and not make the same mistake again.
The current government fully understands what happened. In May 2008, speaking on its behalf, the then minister of industry stated, and I quote:
When it comes to decisions on whether foreign purchases represent a net benefit to Canada, my bottom line is this: Canada must retain jurisdiction and control over technologies that are vital to the future of our industry and the pursuit of our public policy objectives. We will not accept loss of jurisdictional control to another party.
Mr. Chair, in my view, the Nortel transaction as currently structured is not in Canada's best interest, and I believe it is incumbent upon the government to examine it thoroughly with every resource at its disposal, but we also should try to find a solution that can work for the parties and for Canada, because a win-win solution may be possible.
To this end, I believe that the Minister of Industry should initiate a four-way discussion among the government, Nortel, Ericsson, and RIM. Minister Clement's stature is such that he may well be able to fashion, over the next few weeks, an outcome that serves the interests of all parties and of Canadians. Given such an opportunity, I can assure you that RIM would engage with the other parties in a most constructive fashion.
Thank you. I look forward to your questions.