Nokia Siemens Networks (NSN), a 50-50
joint venture between Nokia Corp. (NOK -
Analyst Report) and Siemens AG
(SI - Analyst Report), won an eight year contract
from LightSquared. The deal is worth more than $7 billion. This is
closely followed by NSN's announcement just a day before to buy Motorola
Inc.'s (MOT - Analyst Report) network-equipment business
unit for $1.2 billion in cash.
As per the terms of the contact, Nokia Siemens will install and maintain
a new U.S. 4G LTE mobile broadband network with around 40,000 base
stations that will cover 92% of the U.S. population by 2015.
LightSquared is a new telecom network venture launched by New York-based
hedge fund Harbinger Capital Partners. Nokia Siemens plans to use its
remote network operations centre in India extensively to manage the new
In the past, NSN has already received some contracts for supplying LTE
equipments to AT&T (T - Analyst Report) and T-mobile U.S. With the
acquisition of the Motorola's unit, NSN will become the third largest
telecom network solutions provider in the U.S., after L.M.
Ericsson AB (ERIC - Analyst Report) and Alcatel-LucentALU
- Analyst Report).
Industry sources estimate that by far this over $7 billion contract is
the single largest contract in the global wireless gear manufacturing
industry. From early 2010, NSN has taken several steps to improve its
financials. This helped the company to win 15 LTE contacts throughout
the world. Notable among them are TeliaSonera AB,
- Analyst Report) and Shaw
Communications Inc. (SJR - Analyst Report).
This contract win together with NSN's proposed acquisition of Motorola's
wireless infrastructure assets will significantly boost its presence in
the lucrative U.S. market, which accounted for more than 40% of the $82
billion global wireless network infrastructure business.
Source: Zacks Equity Research (http://www.zacks.com/stock/news/37260/NSN+Wins+$7+Billion+Contract)