Struggling network company Nortel has been dumped as official supplier to London Olympics.
The London 2012 Organising Committee (LOCOG) have named rival Cisco Systems in Nortel's place, but in a tier two deal. Nortel had been one of eight top-tier sponsors signed for the London games. The BBC reports that the deal with Cisco, as a tier two supplier, is "less lucrative" than the Nortel deal, which could lead to a £15m funding shortfall.
In a statement London 2012 organisers said the contract with Nortel "ended on good terms" but the organisers had to seek a different supplier because of uncertainty surrounding Nortel's future.
"Technology for the Games is a huge undertaking with a fixed deadline, relying on finalising the design and building of systems now. In order to deliver 'the most connected Games possible', LOCOG felt it was vital to work with a single business to cover the entire network infrastructure. As a result, LOCOG and Nortel amicably decided to bring the current agreement to an end."
London 2012 CEO Paul Deighton commented, "Nortel acknowledges our fixed deadlines and our desire to have a single supplier for our entire network infrastructure have been impacted by Nortel’s decision to move towards standalone businesses. This is in no way a reflection of their capabilities – this is all about meeting our fixed deadlines."
Nortel filed for Chapter 11 bankruptcy protection in the US in January, and sent its UK operation into administration. The company is currently as separate businesses.
In a statement, Nortel said: "Nortel and the London Organising Committee of the Olympic Games and Paralympic Games (LOCOG) have made an amicable decision to end their relationship for the 2012 Olympic Games."
"As Nortel announced on June 19th, the Company has entered into an agreement for the sale of certain wireless assets and is advancing in its discussions with external parties to sell its other businesses. Nortel’s Tier One partnership with LOCOG spanned across all its business units and it is therefore no longer able to maximise the value of its investment with LOCOG."
Atos Origin, the prime system integrator for the London Olympics 2012, said in a statement that the deadlines had not been affected by switching suppliers: "Atos Origin confirms that the plans are running on time and to budget."