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Illustration: Jordan Moss for Bloomberg Businessweek
Businessweek
The Heist Issue

Did a Chinese Hack Kill Canada’s Greatest Tech Company?

Nortel was once a world leader in wireless technology. Then came a hack and the rise of Huawei.

The documents began arriving in China at 8:48 a.m. on a Saturday in April 2004. There were close to 800 of them: PowerPoint presentations from customer meetings, an analysis of a recent sales loss, design details for an American communications network. Others were technical, including source code that represented some of the most sensitive information owned by Nortel Networks Corp., then one of the world’s largest companies.

At its height in 2000, the telecom equipment manufacturer employed 90,000 people and had a market value of C$367 billion (about $250 billion at the time), accounting for more than 35% of Canada’s benchmark stock market index, the TSE 300. Nortel’s sprawling Ottawa research campus sat at the center of a promising tech ecosystem, surrounded by dozens of startups packed with its former employees. The company dominated the market for fiber-optic data transmission systems; it had invented a touchscreen wireless device almost a decade before the iPhone and controlled thousands of fiber-optic and wireless patents. Instead of losing its most promising engineers to Silicon Valley, Nortel was attracting brilliant coders from all over the world. The company seemed sure to help lay the groundwork for the next generations of wireless networks, which would be known as 4G and 5G.