Nokia Siemens Networks (NSN) has challenged Ciena Corporation’s bid for Nortel Networks’ optical networking business and submitted a new bid of $810 million in cash for the assets.

Nokia Siemens Networks (NSN) has challenged Ciena Corporation’s bid for Nortel Networks’ optical networking business and submitted a new bid of $810 million in cash for the assets. It earlier lost an auction for the assets to Ciena, which agreed to pay $530 million in cash and issue $239 million in convertible notes. NSN, along with One Equity Partners LLC, had previously bid $770 million in cash.

According to Nokia, Nortel would have had to pay an additional break-up fee of more than $20 million to Ciena for accepting that bid because of a prior agreement. As a result, the convertible notes in the Ciena bid should be discounted, making the bid even lower.

The Nortel assets on sale include carrier Ethernet products as well as fibre optics. Nortel has been selling off business units since entering bankruptcy protection following a slump in demand for its phone equipment as companies held off upgrading their networks.