Nokia Siemens Buys Motorola Wireless Network Unit for $1.2B

Motorola has found a buyer for its wireless network equipment unit: Nokia Siemens Networks will pay US$1.2 billion for most of that business, the companies announced Monday.

The acquisition will bring Nokia Siemens around 50 new customers. The two wireless infrastructure vendors have few customers in common, although those they do are large ones such as China Mobile, Vodafone, Verizon Wireless, Sprint and Clearwire.

Motorola is hanging on to its wireless patent portfolio and to its iDEN trunked wireless system, used by U.S. operator Sprint Nextel, among others.

However, Nokia Siemens will acquire manufacturing operations for all the major wireless systems, including GSM (Global System for Mobile Communications), CDMA (Code-Division Multiple Access), WCDMA (Wideband Code-Division Multiple Access), WiMax and LTE (Long-Term Evolution).

Motorola was a rarity in the mobile phone business, producing both handsets and network infrastructure. Most of the other big players have already split their operations. Ericsson retained its network business but formed a joint venture with Sony to make phones; Alcatel sold its handset manufacturing operations (although it still sells those handsets under its own brand in France), and Siemens got out of both businesses, selling its mobile phone subsidiary and pooling its infrastructure business with Nokia to form Nokia Siemens Networks, the company buying Motorola’s infrastructure activities.

Around 7,500 Motorola employees will join Nokia Siemens Networks when the deal closes, the companies said. They expect this to happen by year-end, if they get the necessary regulatory approvals.

Motorola isn’t done with its break-up yet. As a first step to a sell-off, it has created a subsidiary called Motorola Mobility to handle its mobile phone unit and home networking business, which makes set-top boxes.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.