Nokia Siemens Networks moves fast to shed its WiMAX assets

Daryl Schoolar, principal analyst, Infrastructure, Ovum

AUSTRALIA: On November 23rd, Nokia Siemens Networks announced a major company reorganization that would primarily focus the company on mobile networks. As part of this new focus, the vendor said it would be shedding those assets that don’t fit with its long-term strategic plans. NSN’s WiMAX assets, which it acquired from Motorola earlier in the year, were listed as one of those areas the company would be exiting. NSN did not wait long to move on its WiMAX plans. On November 29th, the vendor announced it was selling its WiMAX division, which includes both infrastructure and devices, to NewNet.

Prior to the Motorola acquisition NSN had already shut down its own in house WiMAX operations. Considering mobile operators’ rapidly diminishing interest in WiMAX, the technology no longer fit within the company’s long-term vision. The only synergy between WiMAX and NSN’s other mobile network assets is TD-LTE. This is an opportunity that NSN can still act on.

It is surprising that the Motorola-developed TD-LTE solution for WiMAX to TD-LTE migrations wasn’t part of the WiMAX sale to NewNet. NSN retained those assets. NSN has also developed its own in-house TD-LTE solutions based on its Flexi base station platform. With Clearwire (a NSN WiMAX operator) and other major WiMAX service providers looking to deploy TD-LTE, NSN’s retention of those Motorola-developed TD-LTE solutions should provide a financial benefit to the vendor going forward.

Obviously, NSN being able to quickly shed a non-core asset in WiMAX was a good thing, but what does this mean for NewNet?

NewNet, while not nearly as well known as NSN in the mobile infrastructure market, does have a history in the area, having purchased the IP messaging and PDSN (packet data serving node, for CDMA networks) assets of UT Starcom in 2010. The company also has a heritage in SS7 systems.

While WiMAX’s growth outlook seems limited, there are still revenue opportunities. In areas without a fixed broadband system, operators are still open to WiMAX. NewNet should also find success with devices as this was part of its deal with NSN. While opportunities for building new WiMAX networks appear limited, existing networks still have a need for subscriber devices, which NewNet can now fulfill. NewNet can also use its new infrastructure gear to pursue opportunities in vertical applications like security. But, it is when WiMAX operators’ discussions turn to TD-LTE that NewNet will find itself lacking.

Hopefully for the company it can either develop its own TD-LTE solution or find a way to work with a partner – perhaps NSN.