Rumor: NSN Wants a Piece of Motorola

Nokia Networks (NSN) is reportedly in talks to buy Motorola's infrastructure business in a deal that could be worth between US$1.1 billion and $1.3 billion, according to The Wall Street Journal.

Unnamed sources cited in the WSJ report said that a deal could be reached in the next few weeks. NSN declined to comment.

While the report wasn't specific, it seems NSN is interested only in Moto's Networks business unit, which includes its wireless infrastructure product lines (GSM, 3G, LTE, and WiMax). Moto restructured earlier this year in preparation for its planned split into two separate companies. (See Moto Shuffles Ahead of Split and Moto Wants to Do the Splits .)

The news shows that NSN hasn't given up on buying a bigger slice of the North American market. It tried, but failed, to buy two Nortel divisions (wireless and optical) last year. (See NSN Hopes Dashed as Ciena/Nortel Deal OK'd and Ericsson Delivers Knockout Blow to NSN.)

With Motorola, then, NSN will be hoping it's third-time lucky.

The move makes sense for a number of reasons. Such a deal would give NSN the bigger US market presence it so clearly craves, as it would inherit key US operator accounts with Sprint Corp. (NYSE: S) and Clearwire LLC (Nasdaq: CLWR), which are eyeing future network upgrades to Long Term Evolution (LTE). (See Sprint's LTE Position and Clearwire Paves Way for LTE in US.)

In addition, Moto's networks business would give NSN a stronger position in Japan and China.

"The large number of small-scale, widely distributed WiMax networks around the world would take some tidying up, but the jewels in the crown -- Motorola's significant cellular infrastructure account presence in China and Japan -- are very much worth having," says Patrick Donegan, senior analyst at Heavy Reading.

"There's also Motorola's account footprint in the US that could serve as a launch-pad for new LTE business, particularly with Sprint and Clearwire," adds the analyst.

But NSN isn't the only vendor eyeing Motorola's infrastructure assets: Huawei has also been sizing up the business unit recently, according to the WSJ report.

— Michelle Donegan, European Editor, Light Reading Mobile

Be the first to post a comment regarding this story.
Sign In