NSN snaps up most of Motorola's wireless networks unit
Moto retains IPR, iDEN and enterprise, may reach further deal on public safety
Published: 19 July, 2010
READ MORE: M&A | Nokia Siemens Networks | Motorola | CDMA | LTE
Motorola is not waiting until its planned break-up to offload its wireless networking business, and as expected, Nokia Siemens is to acquire the bulk of those activities. NSN will pay $1.2bn for most of the operations apart from the iDEN system used by Sprint's Nextel arm.
The main attractions for NSN seem to be a strengthening of its US base and the addition of CDMA to its portfolio. These were the same factors that led it to bid for Nortel's CDMA and LTE unit, where it was gazumped by Ericsson.
CDMA itself may be a declining platform, but carriers using the technology are in the forefront of the migration to LTE - while W-CDMA operators are, in many cases, relying on the extended HSPA+ roadmap to expand their networks before leaping to 4G, their CDMA counterparts have a nearer term need to implement next generation standards. Without an established presence among these CDMA majors, NSN has been at a disadvantage in bidding for LTE contracts. Although it gained some IMS business at Verizon Wireless, for instance, it lost out in the main RAN and core deals. It has said that it hopes to muscle into that deal in a future round of tenders, and a greater knowledge of CDMA will help.
It will be cheered by Verizon's official reaction to the deal. "Verizon views today's announcement as good news for the global wireless industry," said CTO Dick Lynch in a statement. "This deal brings together two important Verizon suppliers; we look forward to our continuing work with Nokia Siemens Networks."
Of course, Motorola's CDMA installed base is significantly smaller than that of Nortel (now Ericsson) or market leader Alcatel-Lucent. But NSN will gain useful footholds around the world, most notably Sprint in the US and KDDI in Japan (which is already trialling Motorola LTE kit). The firm expects that the addition of Motorola will make it the number three wireless infrastructure vendor in the US, number one foreign wireless vendor in Japan, and "strengthen its current number two position in the global infrastructure segment". This will, at least for now, put it ahead of the encroaching Huawei.
As well as its CDMA base, Motorola also has particularly strong expertise in the TDD flavor of LTE, thanks to its heavy investment in another TDD technology, WiMAX, and created China Mobile's TD-LTE network in Shanghai along with Alcatel-Lucent.
It is not clear what NSN might do with the WiMAX business. Having virtually exited W-CDMA, Motorola focused all its efforts outside the 2G and CDMA worlds on WiMAX, and more recently LTE. It has a top three position in WiMAX, including deals with Sprint's Clearwire joint venture, and has created a common platform that can run WiMAX and LTE. However, NSN quit WiMAX at an early stage, despite initially winning part of the Sprint deal itself, and has focused entirely on LTE.
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