Might NSN Choke on Its Moto Morsel?

12:30 PM -- If you're set to visit the Mobile World Congress show in Barcelona in February, expect to hear a lot about how the new, bigger Nokia Networks is going to kick some butt in 2011 and beyond.

That's because the European Commission has just approved NSN's acquisition of Motorola Inc. (NYSE: MOT)'s mobile networks business. (See EC Clears NSN/Moto Deal.)

The takeover, which gives NSN more products, customers, revenues, and much-needed market share in North American, looks like it will close early next year. (See Moto Gives NSN a WiMax Option in India, NSN & Moto: It's All in the Execution , NSN Expands in North America With Moto Buyout, and NSN to Buy Moto's Wireless Biz for $1.2B .)

But it's also likely to present a whole new set of integration problems to NSN, which hasn't really worked its way through the Nokia Networks + Siemens Communications merger headaches. (See No Sign of Recovery for Nokia Siemens and NSN's 2010 Confidence Slips.)

It'll be hard to tell just how well NSN will cope with its new family members until (in my view) at least 2012, and that could leave 2011 as yet another year when the main focus of the vendor is integration, rather than regaining lost market share, developing its product and services strategy, and closing major deals.

Some people in the industry have been quick to write off NSN as a company in a death spiral. (See NSN CEO: Don't Write Our Obituary.)

I don't think that's the case at all, but it'll need to make a clean, quick, and neat job of integrating Motorola if it's to change any of its doubters' minds.

— Ray Le Maistre, International Managing Editor, Light Reading

digits 12/5/2012 | 4:15:53 PM
re: Might NSN Choke on Its Moto Morsel?

Thanks patrick - great points.

And absolutely -- it should certainly be less of an issue than the original merger. And if it looks like NSN with Moto on board is a smooth running ship by H2 2011 I will be the first to commend you on your insight and NSN on a neat job well done.

Maybe my blog sounded more negative than I intended -- the key point I was trying to make is that after 3 years of bedding down as a new company and trying to find its groove, the integration of the Motorola business might extend that unsettled period through 2011, but I certainly wouldn't expect it to cause issues beyond that.


pdonegan67 12/5/2012 | 4:15:53 PM
re: Might NSN Choke on Its Moto Morsel?

Can't say I see it this way, Ray. The substantial overlap in the Nokia and Siemens portoflios and regional account footprints caused substantial issues for the new NSN's GSM and W-CDMA accounts in pretty much every account world-wide.

Certainly the acquisition of Motorola's networks business will take some managing in the United States. But even there the challenge is how to leverage Motorola's CDMA and WiMAX account footprints and product protfolios to evolve the wireless carriers to LTE. There isn't much product or account overlap worth speaking of.

Outside the U.S, NSN's existing 2G and 3G accounts will be largely unaffected. NSN is acquiring the KDDI CDMA account in Japan (very nice) and now has Motorola's TD-LTE credentials to leverage in China. Elsewhere the impact seems to me to be pretty negligible. Integration is never easy, obviously. But this second one ought to quite a lot easier to swallow than the original.

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