Moto Eyes AirWalk

Scuttlebutt suggests incumbent is mulling a bid for CDMA base-station startup

September 28, 2005

2 Min Read
Moto Eyes AirWalk

Motorola Inc. (NYSE: MOT) is rumored to have been sniffing around base-station startup AirWalk Communications Inc. with the view to a possible acquisition of the Texas-based newcomer, Unstrung has learned.

Sources suggest Motorola is keen to add AirWalk’s portfolio of CDMA (Code Division Multiple Access) base-station products to its network equipment offering.

Such a deal would make sense, on paper at least. In March this year, Motorola revealed that it is looking to expand its “investment businesses” and that future acquisitions could be in order. Executive VP Adrian Nemcek suggested Motorola will probably continue down the path of making smaller acquisitions and partnerships to fill out its portfolio, rather than contemplating a mega-merger with one of its big rivals (see Moto's in a Buying Mood).

AirWalk certainly fits such requirements. Founded in January 2002, the 25-strong workforce has so far raised $8 million in a Series A funding round (see AirWalk Gets $8M).

The startup claims to have developed the industry’s first “integrated voice and data IP base station transceiver (BTS) and base station controller (BSC) system” for the CDMA market. “Our system is totally IP-based from end to end, not just on the backhaul,” says CEO Serge Pequeux. “Our competitors are still selling legacy network equipment.”

AirWalk has announced a customer deal at Cellcom, a wireless carrier in northeastern Wisconsin (see Cellcom Deploys Airwalk). Pequeux adds that the startup has also won its largest customer deal at Japan’s Softbank and has recently scored a win “on the east coast of Africa” for equipment in the 450MHz spectrum band (see AirWalk Launches CDMA450 Kit). In addition, the CEO states that AirWalk will conduct a trial of CDMA 1xEV-DO (Evolution, Data Only) Revision A technology in the first quarter of next year with a national North American carrier. Sprint Corp. (NYSE: FON) and Verizon Wireless are the obvious candidates.

Motorola would likely benefit from AirWalk’s CDMA market focus. According to a forecast last year by Unstrung Insider, Motorola is ranked third (at 15 percent) in terms of vendor market share in the CDMA technology sector. Lucent Technologies Inc. (NYSE: LU) is the runaway leader with 41 percent of the market, followed by Nortel Networks Ltd. (NYSE/Toronto: NT) at 20 percent.

Naturally, Motorola declined to comment on what it termed “rumors or speculation.” AirWalk’s Pequeux denied any such deal but did admit that the vendor has experienced “interest” from incumbent vendors in the CDMA space.

— Justin Springham, Senior Editor, Europe, Unstrung

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like