Motorola is planning a group spin-off and will push for the separate listing of its mobile phone and network equipment businesses at the beginning of next year. Motorola co-CEO Greg Brown will lead this new company.
Huawei is eager to boost its sales in the U.S. market. Huawei and Motorola currently have a cooperative relationship; the two companies became partners in 2006 to develop 3G wireless network equipment.
Motorola's network equipment business currently belongs to a larger department, which also includes TV set-top boxes. Last year, the revenue of this department was $8 billion, down 21% year-on-year. The operational profit decreased by 39% to $558 million.
Brown has decided to operate the two departments separately, allowing him to sell the network equipment business or form a joint venture with competitors. Huawei will obviously pursue this business from Motorola, but such transactions will face opposition from the U.S. Congress.
However, Brown stated: "The network equipment business remains competitive over a longer period of time. If there are other options, or we can cooperate with other companies, bringing us greater economic value, we will consider it." Currently, the mobile network equipment market mainly has four larger manufacturers including Ericsson, Huawei, Nokia Siemens, and Alcatel-Lucent.
Bernstein analysts estimate that the value of Motorola's network equipment business is between $1 billion and $2 billion. Due to the lack of scale advantages in this department, Motorola is very likely to sell it to a larger competitor.
Sina Tech News, early on March 16th Beijing Time, reported today according to foreign media that Motorola is preparing for a possible plan to sell its mobile network equipment business and does not rule out the possibility of forming a joint venture with competitors in this field.