Nokia Siemens Networks has announced it will pay $1.2 billion in cash for most of Motorola's wireless network equipment business, according to reports by Wall Street Journal and Market Watch. The joint venture between Finland's Nokia and Germany's Siemens already holds a strong presence in the U.S. and across the world, but the deal would propel it to become the No. 3 wireless infrastructure vendor stateside and the top foreign wireless vendor in Japan.
It is also expected to open the door to relationships with many new customers. Motorola's wireless business provides products and services for GSM, CDMA, WCDMA, WiMAX and LTE networks, including 41 contracts for WiMAX in 21 countries, 30 CDMA networks in 22 countries, over 80 active GSM networks in 66 countries, as well as some LTE early adopters. As part of the deal, Nokia Siemens Networks would now take over relationships with more than 50 wireless providers, including China Mobile, Clearwire, KDDI, Sprint, Verizon Wireless, and Vodafone.
The purchase comes at a good time for Nokia Siemens, with an increasing demand for wireless networking infrastructure as most major carriers are either actively deploying their next-generation 4G networks, or plan to do so in the near future. For Motorola, the deal will increase the company's cash reserve as it plans to spin off its cable set-top box and cell phone divisions (responsible for the well-received Droid X) into a separate company called Motorola Mobility early next year.