Nokia Siemens buys Motorola Wireless, boost 4G Networks

The Telco equipment manufacturer giant, Nokia Siemens Networks, has agreed to purchase the network equipment division of Motorola for $1.2 billion.

The business proposition is easy: The dying Motorola’s business would prove out to be profitable for Nokia Siemens, as they now achieve #3 spot in Top wireless network vendors in the United States and hence expand business propositions with Motorola’s existing customers.

The acquisition gives  Nokia Siemens 7,500 employees plus solid relationships with Clearwire, Sprint Nextel, Verizon Wireless, Vodafone, and China Mobile.

In the press release from NSN, Rajeev (CEO) said “Motorola’s current customers will continue to get world-class support for their installed base and a clear path for transitioning to next generation technologies while employees will join an industry leader with global scale and reach. Nokia Siemens Networks will see the benefits of a deal that is expected to enhance profitability and cash-flow and to have significant upside potential.”

But at the end of the day, ROI of the  acquisition will depend on how successfully the operations of the two companies are merged  and how well they streamline the development, manufacturing, distribution, bringing overall efficiency.

The acquisition is also aimed to build a stronger infrastructure for 4G/LTE wireless networks being setup all around US.

Most of the industry leading Telecom operators, like Verizon, believe that this is good move for the betterment of wireless industry.

Motorola intends to build a separate entity called  “Motorola Mobility” out of its cellphone division which has got some industry appreciation after the launch of Android smartphones starting with Droid and then Droid X, but that plan has been postponed due to heavy losses in that unit.

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