Moto Leans on Ericsson's LTE

2:30 PM -- It's interesting to see that Motorola Inc. (NYSE: MOT) has decided to use Ericsson AB (Nasdaq: ERIC)'s Long Term Evolution (LTE) technology in its public safety services offering now that the US vendor is in the process of selling off its own cellular infrastructure business to Nokia Networks . (See Ericsson, Moto Team on LTE.)

In the partnership announced today, Moto will supply its "public safety optimized" LTE core equipment, while Ericsson will contribute the LTE access equipment as well as some packet core technology and related services. But why Ericsson, and not, for example, Alcatel-Lucent (NYSE: ALU) or Nokia Siemens? (See NSN to Buy Moto's Wireless Biz for $1.2B , NSN Expands in North America With Moto Buyout, Nortel Wireless Winner: It's Ericsson!, Ericsson Delivers Knockout Blow to NSN, and Moto Seeks $50M for LTE Safety Network.)

"It seems highly likely to me that Alcatel-Lucent would have been very interested in partnering up with Motorola in this way," says Heavy Reading senior analyst Patrick Donegan. "That approach would also have led to some market consolidation among vendors, which the public safety market could arguably do with.

"On the other hand, this partnership allows the development of a competitive market in LTE-based public safety solutions. Critically, it also provides what may be the only basis upon which Ericsson would have considered entering this market. Ericsson’s commitment is likely going to be significant in determining the rate of adoption of LTE by the public-safety community."

— Michelle Donegan, European Editor, Light Reading Mobile

pdonegan67 12/5/2012 | 4:24:26 PM
re: Moto Leans on Ericsson's LTE

This is a great deal for Motorola. It gets to leverage its clear leadership in public safety applications and devices with a global leader in LTE rather than being saddled with its own waning infrastructure business. As a device and applications vendor, end to end solutions are always better when both ends of the value propostion are compelling. Now they are.

It's an interesting deal for Ericsson. It gets the best possible partner to pursue opportunities to push LTE deeper into the government and enterprise space. With Motorola's account relationships and expertise in this space, Ericsson has better prospects of succeeding here than it could ever have had on its own.

The real loser here is Alcatel-Lucent which has big growth ambitions in this space - both to penerate the government and enterprise space in its own right but also to drive its own LTE infrastructure volumes up to competitive levels via as many channels as it can. A partnership with Motorola here would have been sweet for Alcatel-Lucent. Instead it now faces a very much strengthened Motorola that will be even tougher to dislodge in these accounts than previously.

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