NewNet To Acquire Nokia Siemens WiMax Assets

Nokia Siemens Network is selling its WiMax business, more than a year after buying it as part of a larger deal with the former Motorola.

Nokia Siemens has announced it is selling the WiMax wireless business to NewNet Communication Technologies, a US-based vendor that offers wireless applications and services to telecommunications companies and equipment manufacturers.

Under the deal, NewNet will not only acquire the entire WiMax business from Nokia Siemens, but also all of its related customer and supplier contracts and about 300 employees. The deal is expected to close before the end of the year. No financial details were released.

Stronger positioning

The deal will enable NewNet, which is owned by Skyview Capital, to rapidly grow its reach in the wireless infrastructure market and become a strong player in the WiMax technology space, according to president and CEO Ron Pyles.

“The addition of the WiMax business would enhance the breadth of NewNet’s product portfolio, R&D capabilities, customer relationships and our overall market position in providing wireless infrastructure solutions to carriers on a global basis,” Pyles said in a statement. “NewNet recognises there is enormous potential in providing outstanding products, support and services to operators who have already invested heavily in WiMax technologies as well as those who will do so in the future.”

WiMax got a head start on Long-Term Evolution (LTE) in the race toward 4G wireless, but particularly in the United States, LTE is expected to quickly surpass WiMax. Earlier this year, market research firm IHS iSuppli said the number of worldwide subscribers to LTE will exceed that of WiMax by 2012, and will have nine times the number of subscribers by 2014.

Sprint began offering WiMax in 2008, but the major wireless carriers are growing out the bulk of their wireless networks on LTE technology.

In July 2010, Nokia Siemens bought Motorola’s wireless network infrastructure assets for $1.2 billion (£769m), a deal that included not only WiMax technology, but also LTE, GSM, CDMA and WCDMA. The deal was seen as a step for Motorola in its eventual efforts to split into independent companies. Motorola completed the split in June, with Motorola Solutions offering enterprise products and Motorola Mobility focusing on smartphones and tablets.

“We believe that our current WiMax customers would receive the highest quality products, services and sales support from NewNet,” Marc Rouanne, head of network systems at Nokia Siemens, said in a statement. “This transaction would also provide an excellent opportunity for our WiMax employees. We have great confidence in NewNet’s plans to become a major WiMax infrastructure provider. The company has a solid track record in acquiring telecommunication businesses and driving revenue growth.”

For Nokia Siemens, the deal also comes at a transition point. The company earlier this month announced plans to cut about 17,000 jobs as it redirects its business to focus on mobile broadband. Nokia Siemens, which currently has about 74,000 employees, expects to complete the job cuts by the end of 2013.

“We believe that the future of our industry is in mobile broadband and services – and we aim to be an undisputed leader in these areas,” Nokia Siemens CEO Rajeev Suri said in a statement while announcing the upcoming layoffs. “At the same time, we need to take the necessary steps to maintain long-term competitiveness and improve profitability in a challenging telecommunications market.”