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Nextel & Moto WiDEN Ties

Light Reading
LR Mobile News Analysis
Light Reading
5/25/2004

Motorola Inc. (NYSE: MOT) appears to have secured its position as Nextel Communications Inc.’s (Nasdaq: NXTL) favored equipment supplier for future nationwide network rollout, despite reports of a previous “frosty” relationship between the two companies.

The U.S. vendor is the sole equipment supplier for Nextel’s commercial iDEN service, with the network generating approximately 20 percent of Motorola’s total infrastructure revenue.

Speaking at a Lehman Brothers conference this week, Nextel’s CEO Tim Donahue confirmed plans for the rollout of Motorola’s WiDEN technology, a software upgrade to the iDEN network that is touted to increase data rates “between 60 to 80 kbit/s.”

“We are going to roll out WiDEN by year end, and Motorola is delivering the software to us now,” he commented. “I look forward to working with Motorola to get even more capital efficiencies going forward. I want to expand our coverage… We are going to put up 2,200 new coverage sites in 2004.” (See Nextel Boosts Moto.)

Donahue singled out Motorola’s new CEO, Ed Zander, as the man responsible for improving relations between the two companies (see Motorola Names New CEO). “He understands that Nextel is his largest customer… Early on he has made a number of changes in terms of who manages the Nextel account, and it has been very positive on both sides.”

According to a Lehman Brothers research note, the partnership “had been frosty at times in recent years.”

Motorola itself is eager to scotch any speculation that it could lose Nextel’s business, especially in light of the carrier’s commercial trial of Flash-OFDM technology from startup Flarion Technologies (see Nextel Steps Up Data Race).

“We enjoy a really positive relationship with Nextel,” comments Jerry Wilson, senior director, industry research and analysis, global marketing, for the vendor’s Global Telecom Solutions sector.

“We are confident that we are going to continue working with them closely going forward. They are looking at a number of different things, and we look at those things with them. Whatever Nextel does, we are going to be involved intimately with them.”

— Justin Springham, Senior Editor, Europe, Unstrung

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