Is local multipoint distribution services a potential threat to CDMA? Attached is tomorrow's NY Times article.
June 7, 1999
Cisco and Motorola Agree to Buy Wireless
Technology Company
By SETH SCHIESEL
rying to deliver high-speed Internet links without wires, Cisco
Systems Inc. and Motorola Inc. plan to announce Monday that
they have agreed to acquire a subsidiary of the Robert Bosch Corp. of
Germany that is developing advanced wireless technology.
Cisco and Motorola do not plan to disclose terms of the agreement, but
executives close to the deal said the price would be substantially less than
$1 billion. That would be in line with other recent acquisitions by Cisco,
which has made a string of deals but none for more than $265 million
since 1996, when Cisco acquired Stratacom Inc. for $4.7 billion.
Cisco, the No. 1 maker of data networking equipment, and Motorola, a
big maker of cellular phones and equipment, plan to buy a Bosch unit
based in Richardson, Texas, that has between 100 and 200 employees.
The unit is trying to make products to transmit large amounts of data
between stationary fixed antennas using a wireless technology called local
multipoint distribution services.
One of the hottest battlegrounds in the communications industry has
become the battle to offer high-capacity data links to consumers and
small and medium-sized business customers. The AT&T Corp. has bet
more than $90 billion that it can offer advanced communications
packages using cable television systems, for example.
The Baby Bell local phone carriers, MCI Worldcom and others are
focused on so-called digital subscriber lines, a new technology that
increases the data capacity of normal phone lines.
The dark horse technology in this race has been wireless. Wireless
mobile telephones have become popular, but no company has yet
succeeded in broadly and profitably delivering torrents of Internet data
using wireless links -- whether mobile or stationary.
With the Bosch deal, Motorola and Cisco want to make high-speed,
stationary wireless data delivery possible.
"This really strengthens our position in high-speed Internet access," said
Donald J. Listwin, a Cisco executive vice president. Referring to digital
subscriber line technology, he added: "We have leading technology in
cable. We have leading technology in DSL, and we have leading
technology in the fixed-wireless space. We have leadership in high-speed
access, which is the future of the Internet."
In acquiring the Bosch unit, Cisco and Motorola intend to form a new
company called Spectrapoint Wireless. Motorola will own 81 percent of
Spectrapoint while Cisco will own 19 percent.
Cisco began developing technology in cooperation with Bosch about a
year ago, but found that potential customers wanted not only technology,
but also financing and help in deploying wireless equipment. Partly to
address those needs, Cisco turned to Motorola and in February Cisco
and Motorola announced plans to jointly spend $1 billion for a period of
up to five years to develop wireless products.
One challenge to Spectrapoint in the United States could be in finding
customers. (Cisco's first wireless customer is in Canada.) Teligent Inc.
and Winstar Communications Inc. were the first two U.S. companies to
attempt to broadly deliver voice, video and data services using stationary,
or fixed, wireless technology. But Teligent has committed to use mostly
wireless equipment from the Nortel Networks Corp. of Canada while
Winstar is working closely with Lucent Technologies.
Potential new customers, including Nextlink Communications Inc., which
is backed by Craig O. McCaw, the cellular phone pioneer, are on the
horizon, however. |
