Carl Icahn is upset that Motorola (MOT) is sitting on over $11 billion in cash and getting a 3% yield on it. He wants that dough to be given back to shareholders.

At the same time, the head of Nortel (NT), a former Motorola exec, is telling anyone who will listen that the big network company is turned around. According to the company its accounting issues are behind it, the employee cuts are done, and SEC investigations are a thing of the past.

Nortel’s fourth quarter revenue will be up 9% to $3.26 billion.

Nortel is also investing in WiMax, a technology that Intel (INTC) and Motorola have already embraced.

According to MarketWatch, Nortel CEO Zafirovski reiterated his belief that NT is now stable enough to contemplate a strategic acquisition that would strengthen its core businesses. But, maybe it will be the company that is acquired.

Motorola’s infrastructure business and Nortel are in very similar parts of the telecom supply sector. And, while a turnaround may be well along at Nortel, its stock has been flat for the last year.

Based on Nortel’s general and administrative costs, Motorola could probably take $100 million out of a combined company.

Motorola’s may have to rely on its telecom equipment business more for earnings in the future. It handset sales are faltering and the head of the units has left for Dell (DELL)

Nortel’s market cap is $13 billion. Perhaps Motorola could put all its cash to good use.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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