Once again, Motorola appears to land on its feet
As speculation of a Sprint-Nextel merger ran rampant a little more than a week ago, the notion of the merged carrier embarking on the construction of a CDMA EV-DO network was supposed to be bad news for Motorola.
Among analysts, the consensus was that the merger would bring an end to Motorola’s exclusive supplier relationship with Nextel, which was assumed to be ditching its iDEN network for the CDMA upgrade.
The argument made perfect sense — except that it turned out to be wrong.
Instead of trying to move Nextel customers onto a CDMA network to the detriment of enterprise customers’ beloved push-to-talk service, the merged company plans to maintain both networks while building the EV-DO platform. In fact, Motorola was inked to a three-year extension to expand and enhance the iDEN network.
Better yet, Motorola will be asked to build dual-mode phones that will work on the CDMA network at 1.9 GHz and on the iDEN network at 800 MHz. This might have happened anyway with Nextel as a standalone company, but now Motorola will get to manufacture more than twice as many of the handsets, which should boost its bottom line while also letting the phones be more affordable.
It’s not the first time Motorola has made lemonade out of alleged lemons. Four years ago, a struggling Nextel was contemplating an expensive switch to CDMA when Motorola officials convinced the carrier to stick with its iDEN technology — a decision that helped generate the kind of profits and subscriber growth that made this week’s merger announcement possible.
Meanwhile, the notion of integrating disparate networks via the handset will be watched closely. If Sprint Nextel and Motorola are able to make this work economically, the precedent could impact thinking throughout the wireless industry — not only on the commercial side, but also for public safety, which is seeking interoperable solutions.
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