Nortel announced late Tuesday that it has formed a joint venture with Korean manufacturer LG Electronics to develop wireline, optical, wireless and enterprise communications products for the South Korean market and elsewhere.

The agreement, first announced in January, was signed by S.S. Kim, chief executive officer and vice-chairman of LG Electronics and Bill Owens, vice-chairman and chief executive officer of Nortel this week. It positions Nortel to be more engaged in the South Korean market, known for its technology leadership, and to leverage that involvement to bring leading edge products to other markets.

"Today is another milestone for Nortel as we continue to demonstrate our commitment to open up the Asia region with a best-in-class technology leader," Owens said in a prepared statement. "South Korea leads the world in embracing technology that enhances the human experience. Our relationship with LG better positions Nortel in the dynamic and growing Asia market, will expedite research and development, and will benefit our global customers. Nortel is clearly playing to win.”

South Korea is a world leader in broadband penetration, hitting 70% earlier this summer. In addition, the country has three three mobile carriers offering CDMA-based third-generation mobile services to more than 32 million users. And Korea has recently taken an aggressive position on deployment of a version of broadband wireless technology.

Nortel will own 50% plus one share of Nortel-LG Ltd. and will contribute its current South Korean distribution and service businesses in addition to paying its partner $145 million today and more in two years, depending on the performance of the unit.