Nokia Siemens confirms Motorola network assets purchase

Infrastructure vendor Nokia Siemens Networks has announced that it is to acquire “certain network infrastructure assets” from US competitor Motorola for $1.2bn. The Finnish-German joint venture said that it expects to gain new relationships with 50 wireless carriers and strengthen existing commercial ties as a result of the deal, which the two firms expect to close before the end of 2010.

Motorola’s networks portfolio caters to a range of technologies, from GSM and CDMA, through WCDMA to WiMAX and LTE. The US vendor will be keeping hold of its iDEN business, however, and will also retain”substantially all the patents related to its wireless network infrastructure business and other selected assets,” the firms said.

Motorola is one of the leading suppliers of WiMAX technology, with 41 contracts in 21 countries, while its CDMA footprint runs to 30 networks in 22 countries. The benefits of these elements of the portfolio for NSN are most likely to revolve around forthcoming technology decisions from the operators involved, as both CDMA and WiMAX are now seen as having limited futures.

The evolutionary roadmap for CDMA is at its end and leading operators of the technology are in the midst of high profile moves to deploy LTE. Meanwhile WiMAX has struggled to gain traction, with some of the technology’s most high profile supporters, including Alvarion and Sprint, publicly embracing the rival 4G technology as well. India’s recent BWA auctions were seen as a last attempt for the technology to secure some meaningful deployments but early indications are that the majority of new licensees are keen to focus on LTE.

NSN itself pulled away from WiMAX last year and has never had a foothold in the CDMA networks business. The firm seems primarily interested in the carrier relationships that come with the Motorola networks business, rather than the technology. There is clearly a hope that, when upgrades and technology switches take place, those relationships will improve NSN’s chances of winning business.

“As customers look to transition from CDMA networks to next generation technologies, the addition of the Motorola wireless network infrastructure business is targeted to ensure that we are well placed to meet those needs,” said Bosco Novak, head of customer operations at NSN.

Geographically, NSN said it expected the main benefits to come in the US and Japan, where it has not previously had a particularly strong position. China Mobile, Clearwire, KDDI, Sprint, Verizon Wireless and Vodafone were all name-checked by NSN as organisations with which its relationship would deepend as a result of the purchase.

Some 7,500 Motorola employees are expected to move to NSN as part of the deal, including staff at large R&D sites in the US, China and India.

Julian Bright, senior analyst at Informa said that, while the deal made sense in light of NSN’s need to be more aggressive in the market, it would likely bring with it fresh challenges. “NSN struggled with the original merger of the two companies and the integration with Motorola will probably add to its woes,” Bright said. “The new entity represents a tough mix of nationalities, with the combination of US, German and Finnish cultures. While there are opportunities for the merger to enable the creation of more integrated solutions such as Single RAN, NSN first needs to overcome the problems associated with integrating a new vendor’s RAN equipment with its own existing core network, backhaul, network and subscriber management products.”