MOT and Point to Multi-point/Bosch: another version:
Motorola & Cisco to Buy Bosch Assets in Wireless Push
By Kate Norton at Bloomberg News
07 June 1999
Motorola Inc. and Cisco Systems Inc. said they'll buy part of Bosch Telecom Inc. for an undisclosed sum, accelerating their efforts to provide wireless technology that can carry voice, data and video at high speed.
Motorola, the No. 2 mobile phone maker, and Cisco, the No. 1 networking equipment maker, are acquiring assets from Germany's Robert Bosch GmbH that specialize in a wireless technology known as LMDS, or local multipoint distribution services. The New York Times, citing executives close to the transaction, said the purchase is valued substantially less than $1 billion.
The venture, which pairs Motorola's wireless technology with Cisco's expertise in building Internet networks, is aiming to gain a head start in the LMDS wireless services market, which is expected to grow to $2.3 billion in 2003, from $241 million in 1999, according Pioneer Consulting.
"Strategically, this could be very significant for both companies and be worth hundreds of millions down the road," said Mona Eraiba, a Gruntal & Co. analyst, who rates Motorola "strong buy."
The business will be part of a new venture, SpectraPoint Wireless, which will offer high-speed data and voice capabilities to companies using LMDS. Its appeal is its ability to bring phone calls into homes and offices, bypassing the so-called "last mile" of cable owned by local phone service providers.
SpectraPoint Wireless will offer the first LMDS product authorized for commercial use in Canada and the U.S., building on a year-old partnership between Bosch and Cisco that has developed networks for LMDS license holders North American and Australia.
Wireless networks use point-to-multipoint technology, allowing a single antenna to send and receive radio transmissions carrying voice, data and video information to and from numerous buildings. Small shoe box-shaped antennae placed on the side of buildings receive the signals, then route the data through phone wires already installed inside.
Privately held Bosch, better known as a maker of car parts and appliances, sold the operations "because the expectations we had for the company so far haven't materialized," spokesman Helmut Krause said.
He said the LMDS business employs about 160, a small fraction of the 18,000 employed by the company's telecommunications unit, which had sales of about 5 billion deutsche marks ($2.6 billion) last year. Bosch doesn't break down unit sales according to operations, Krause said.
The SpectraPoint venture is the second wireless collaboration between Motorola and Cisco this year. In February, the two said they'd invest $1 billion to create an Internet technology standard that lets wireless networks carry voice, data and video services.
"Motorola believes local exchange carriers must begin offering timely and cost-effective alternative solutions to meet the growing demand for broadband communication services," said Rickie Currens, corporate vice president and general manager, Motorola Ground Systems Division.
Motorola fell 7/8 to 87 in early trading. Cisco fell 3/16 114 11/16.
Copyright 1999, Bloomberg L.P. All Rights Reserved.
Regards. Liacos_samui |
