Nokia Siemens Networks said Monday it agreed to acquire most of Motorola’s network equipment business in a $1.2 billion cash deal. Nokia Siemens is eyeing the assets to expand its opportunities in North America and Asia.
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In the deal, Nokia Siemens expects to gain relationships with more than 50 operators and strengthen relationships with China Mobile, Clearwire, KDDI, Sprint, Verizon Wireless, and Vodafone. Nokia Siemens also expects the acquisition to enhance its position in key wireless technologies, giving it a large global footprint in CDMA.
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Rajeev Suri, CEO of Nokia Siemens Networks, said Motorola’s customers will still get support for installed bases, as well as a clear path for transitioning to next-generation technologies. Nokia Siemens, he continued, will see the benefits of a deal that is expected to enhance profitability and cash flow and to have significant upside potential.
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Motorola’s Networked Reach
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That upside is, in part, market share. Nokia Siemens expects the acquisition to thrust it into third position in terms of wireless-infrastructure vendors in the United States, first in Japan, and second globally.
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Motorola’s networks infrastructure business offers products and services for wireless networks, including GSM, CDMA, WCDMA, WiMAX and LTE. It’s a market leader in WiMAX, with 41 contracts in 21 countries. Motorola also boasts a strong global footprint in CDMA with 30 active networks in 22 countries, along with a GSM installed base of more than 80 active networks in 66 countries and traction with LTE early adopters.
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Bosco Novak, head of customer operations at Nokia Siemens, said as customers look to transition from CDMA networks to next-generation technologies, the addition of the Motorola business will position the company to meet those needs. Verizon, for one, is giving the deal a nod.
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Verizon views today’s announcement as good news for the global wireless industry, said Richard Lynch, executive vice president and CTO…