Shares in Nortel, North America’s biggest telecoms equipment maker, fell more than 45 per cent on Wednesday, plunging to their lowest level in the company's history, after the group cut revenue, sales and profit forecasts and said it was considering selling one of its businesses.

Nortel’s shares sunk to $2.83 in afternoon trading, a drop of $2.46 or 46.6 per cent, lower even than 2002, after the bursting of the technology bubble, when the group’s stock fell to $4.60.

The Canadian phone equipment maker warned revenue would drop as much as 4 per cent this year, compared with a previous goal of low single digit growth, and trimmed profit margins from 43 per cent of sales to 42 per cent.

It projected third-quarter sales below analysts’ projections.

Mark Zafirovski, Nortel’s chief executive, also said the group is considering selling its Ethernet unit, which one analyst described as the company's "crown jewel". The unit allows phone and cable companies to offer “triple play'” packages of phone, Internet and television and accounted for 14 per cent of Nortel’s $2.62 billion in sales in the last quarter.

Mr Zafirovski blamed the company’s troubles on the weak global economy as telecoms companies, which buy its equipment, cut their budgets more than expected.

In addition, Nortel and its rivals, including Alcatel-Lucent, where Ben Verwaayen, the previous head of BT has just taken over as chief executive, are facing stiff competition from Chinese equipment makers such as Huawei.

In a statement, Mr Zafirovski said: “It is clear that the business environment in which we operate requires additional immediate and decisive actions”, adding “a comprehensive review” of the business was taking place.

The restructuring, which Mr Zafirovski outlined in a conference call with analysts before trading opened in New York, came as a surprise.

Mr Zafirovski, who joined the company from rival Motorola in 2005, has already cut about 4,000 jobs since taking over three years ago, while struggling to turn the ailing business around.

Nortel went through a series of restructuring efforts after the technology bubble burst at the start of the decade, including shedding almost two thirds of its workforce, from 90,000 in 2000 to 32,550 employees.

Almost half of large corporations across the globe have curbed technology spending for the next year to cope with the spreading global slowdown, according to Forrester Research, the technology analysts.

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