In 1895, Bell Telephone Company of Canada decided to spin off its manufacturing arm to build phones for sale to other companies as well as other devices such as fire alarm boxes and street call boxes for police and fire departments. This company was incorporated as the Northern Electric and Manufacturing Company Limited.
In 1914, the company merged with Imperial Cable to form Northern Electric, co-owned by Bell Canada and Western Electric, the manufacturing division of AT&T in the US. By the end of World War I, Northern Electric had become a major distributor of Western Electric appliances across Canada.
In 1949, an antitrust suit in the US forced AT&T/Western Electric to sell its stake in Northern Electric to Bell Canada. Deprived of its Western Electric tie, Northern began developing its own products. Bell Canada acquired 100 percent of Northern Electric in 1964. Through public stock offerings starting in 1973, Bell's ownership of Northern Electric and its successors would be reduced, though it continued to have majority control.
In 1976, the company name was changed to Northern Telecom Limited, and in 1983, due to deregulation, Bell Canada Enterprises (later shortened to BCE) was formed as the parent company to Bell Canada and Northern Telecom.
The name changed in 1995 to Nortel, as a streamlined identity for its 100-year anniversary. Three years later, with the acquisition of Bay Networks, the company's name was changed to Nortel Networks to emphasize complete solutions.
In the late 1990s, stock market speculators began pushing up the price of company shares to unheard-of levels, despite the company's repeated failure to turn a profit. When the speculative telecom bubble of the late 1990s reached its pinnacle, Nortel was to one of the most spectacular casualties, with its stock price plunging from C$124 to $0.47. 60,000 employees lost their jobs.
In late 2004, Nortel returned to using the Nortel name alone for branding purposes, although the company's name remains Nortel Networks.
In 2009, after years of losing money, Nortel was broken up and the pieces were sold to other companies.