Nokia Siemens Networks (NSN) confirmed it plans to acquire the majority of Motorola's wireless network infrastructure assets in a $1.2Bn cash transaction.
NSN will acquire key accounts including China Mobile, Clearwire (US), KDDI (Japan), Sprint (US), Verizon Wireless (US) and Vodafone. NSN hopes the acquisition will strengthen the new entity's position as #2 in the mobile infrastructure market behind Sweden-based Ericsson.
Rather than technology, NSN's move is mainly about acquiring tier-1 operator clients, since the deal does not include Motorola patents. The deal improves NSN's foothold in key US and Japanese markets, especially after Ericsson snatched Nortel's assets last year.
Active in a very competitive market, Nokia Siemens Networks faces increasing pressure on revenues and therefore seeks market share gains in growing segments, namely 4G and emerging markets.
For Motorola, the divestment marks an important step in its restructuring process, giving it breathing room to split its two core businesses, Motorola solutions (B2B) and Motorola Mobility (set-top boxes and mobile handsets) into separate entities.
More broadly, Motorola has been positioning itself within the multiscreen services segment, where pay-TV operators deliver content not just to the set-top but to the PC and mobile as well. With two purchases of late - Netopia, Leapstone - the firm has bought its way into the market for back-office, software
management systems that operators require to deliver content to new screens. In selling its wireless assets, Motorola has not only lost the opportunity to couple wireless infrastructure and software management sales, but has signalled a partial consolidation around software where its wireless business is concerned. With the loss of its wireless hardware, Motorola has further compromised its position in the market for integration service, where hardware can often catalyse a firm's ability to secure an integration contract.
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