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4G/3G/WiFi

NSN Expands in North America With Moto Buyout

Nokia Networks says that expanding its profile in North America and beyond was one of the main reasons behind its $1.2 billion buyout of Motorola Inc. (NYSE: MOT)'s wireless networks unit, which was unveiled this morning. (See NSN to Buy Moto's Wireless Biz for $1.2B .)

NSN is taking on an infrastructure player -- and around 7,500 employees worldwide -- that will give it more presence in the US, Japan, and other global markets. The company will also be buying in WiMax, Long-Term Evolution, and CDMA customer accounts from the Motorola unit.

NSN's CEO Rajeev Suri said on a conference call to explain the deal this morning that it was "no secret" that the company had been looking for a way to increase its footprint in North America. "This deal moves us from the number five infrastructure vendor in North America to number three," Suri said on the call. (See Reader Poll: NSN's Best US Fit.)

NSN already supplies AT&T Inc. (NYSE: T), T-Mobile US Inc. , and Verizon Wireless gear for the LTE core networks they are building in the US. The deal gives the company a CDMA presence with Sprint Canada Inc. and a fresh new WiMax profile at Clearwire LLC (Nasdaq: CLWR). On the international side, NSN will be taking on Motorola's deals with Vodafone Group plc (NYSE: VOD) and KDDI Corp. in Japan.

"We're already the leader in LTE," Suri claimed on the call. This is because, he says, NSN is working with 15 commercial networks, "not trials." Nonetheless, the Motorola team will bring in expertise on the proto-4G technology, particularly with regard to the Time-Division version of the technology (TD-LTE) that is popular in China and beyond. (See Moto Promotes TD-LTE at Expo 2010.)

For his part, Motorola co-CEO Greg Brown says the Chicago-based vendor will get to focus on building its devices unit and a "mobility solutions" company, focused on government, public safety networks, and the Enterprise, ahead of a planned split of the two elements of the company in the first quarter of 2011.

Brown didn't entirely rule out the prospect of more sell-offs at Motorola ahead of the spinoff, but he made it seem like a distant chance at best. "We’ve been working on this [deal] for several months," he told listeners on the call. "I’m not working on anything else."

The deal is expected to be closed by the end of the year.

— Dan Jones, Site Editor, Light Reading Mobile

sarahthomas1011 12/5/2012 | 4:29:37 PM
re: NSN Expands in North America With Moto Buyout

It's good news that NSN has no plans to lay-off anyone...for now. It's keeping Chicago as a major sales, operations and tech center too. Wonder if the Moto folks will get along with the NSN folks -- there's a long history there!

joset01 12/5/2012 | 4:29:36 PM
re: NSN Expands in North America With Moto Buyout

You have to wonder how long the Motorola side of the house will be able to keep iDEN team strong too...

acohn 12/5/2012 | 4:29:35 PM
re: NSN Expands in North America With Moto Buyout

NSN will screw this up instead of turn it around...  When all decisions of importance go to Europe, they are either too slow to respond to customer needs or market needs. 


Siemens is all but non-existent in the carrier space in the USA, Nokia handsets and infrastructure are a very, very small part of the market these days, and the combination of them both has not been proven to be anything close to a turnaround in the US market.  If what I stated above were untrue, then Nokia and Siemens would still be running their own businesses, not a combined entity.


The sale is too bad, because Motorola really got this business started in the first place.  They invested in getting carriers started all over the world, and for years were the largest foreign investor in China.  They adopted too much overhead as years went on in my experience working with them, and had too few employees actually doing any work.  Instead they had too many layers of management and far too many project managers (6 Sigma Processes & Procedures) that didn't do much to execute any business, but did win them a bunch of awards and space in magazines, MBA texts and other publications.


NSN is going to take this business over and need to do some layoffs, contrary to the "Win for Chi-town."  However, NSN uses the same types of very slow moving processes and procedures and all the overhead and slow decision making that goes along with their way of doing business.


All this just spells a little slower decline instead of a new beginning unless they can find some innovators that are ready to make real changes to all of their businesses.  It is doubtful they are willing to do what it takes and let go of their history of processes that lead to failure.


 

acohn 12/5/2012 | 4:29:35 PM
re: NSN Expands in North America With Moto Buyout

Didn't you mean "challenge accepted" and please buy lots more ads on our website NSN!

digits 12/5/2012 | 4:29:35 PM
re: NSN Expands in North America With Moto Buyout

I am presuming the response from NSN headquarters would be -- CHALLENGE ACCEPTED!

digits 12/5/2012 | 4:29:34 PM
re: NSN Expands in North America With Moto Buyout

acohn


Not quite sure what your point is, but it seems you are confusing us with another publication...


My point was that I'm sure NSN would say 'this time it'll be done right'...


 

paolo.franzoi 12/5/2012 | 4:29:34 PM
re: NSN Expands in North America With Moto Buyout

acohn,


One error in your thesis is that Nokia did NOT combine its handset business as part of the creation of NSN.


Beyond that, 70% or so of all acquisitions are failures.  No reason to expect this one to work.


seven


 

acohn 12/5/2012 | 4:29:34 PM
re: NSN Expands in North America With Moto Buyout

Brook, good points, although some of the Nokia leadership certainly landed at the combined NSN, and both companies individually and together have performed poorly in the US market over the past several years.  Although Lucent and Nortel, now parts of others or divided into little pieces have not done much better, much of that due to financial mismanagement instead of poor products.  My opinion is that NSN has not the right products, service and mentality to properly address US carriers.


Ray, kidding about the ad sales.  We all are selling something and want to sell more of it, whatever that may be.

cyber74 12/5/2012 | 4:29:32 PM
re: NSN Expands in North America With Moto Buyout

After missing out on opportunities to bulk up NSN by acquiring Nortel assets, Sue Spradley finally takes out Moto. Or, to look at it from the other side, Moto finally admitted its failure in the market that it created. 

dellman 12/5/2012 | 4:29:31 PM
re: NSN Expands in North America With Moto Buyout

What is the current NA market share of the wireless vendors - Motorola, NSN, Ericsson + Nortel, ALU ?

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