Cisco has replaced Nortel as the official communications sponsor of the London 2012 Games.

The London 2012 Organising Committee (LOCOG) said its contract with Nortel had ended “on good terms” after the telecoms giant had begun selling core parts of its business.

LOCOG said its goal to have a single supplier for the Games’s network infrastructure would be impacted by “Nortel’s decision to move towards standalone businesses.”

“This is in no way a reflection of their capabilities – this is all about meeting our fixed deadlines,” LOCOG said.

Being dropped from the Olympics is a symbolic blow to the company and will no doubt cause customers to question the company’s capacity to deliver long term results. Already the firm appears to be in the process of being picked apart in a bankruptcy fire sale, with its most profitable chunks being sold off at bargain prices (Nokia Siemens recently bought Nortel’s entire CDMA assets and new generation LTE technology for $650 million), and major customers like Verizon fleeing to competitors such as Alcatel-Lucent. With every sale, Nortel’s survival in any recognisable form seems to be increasingly unlikely.

Nortel’s shoes in 2012 will be now filled by Cisco, which will be a tier 2 sponsor rather than Nortel’s tier 1.  Cisco’s UK and Ireland head, Phil Smith, said the company was delighted to be involved.

"We will work hard to deliver the infrastructure for London 2012, which promises to be the most connected Games ever,” he said.