CHANDLER, Ariz. -- June 7, 1999 -- Motorola and Cisco today announced an agreement to jointly purchase the fixed wireless assets of Bosch Telecom, Inc. in Richardson, TX. Bosch Telecom is a wholly owned subsidiary of the Robert Bosch Corporation in Germany. In purchasing Bosch Telecom, the Cisco and Motorola will create a jointly owned company called SpectraPoint Wireless.
SpectraPoint Wireless will focus on delivering high-speed data, voice and video capabilities to businesses over a fixed wireless infrastructure called Local Multipoint Distribution Services (LMDS). LMDS is a last-mile technology that replaces the need for wired phone and cable lines. Financial terms of transaction were not disclosed.
The creation of SpectraPoint is the second major wireless announcement between Cisco and Motorola this year. In February, Cisco and Motorola announced plans to invest $1 billion on R&D centers for third-party developers and also create new Internet-based architecture for cellular wireless services, focused on the mobile industries. Both deals extend a strategic alliance between Motorola and Cisco to develop and deliver a New World framework for Internet-based, wireless services.
"Motorola believes local exchange carriers must begin offering timely and cost-effective alternative solutions to meet the growing demand for broadband communications services. Through this partnership, SpectraPoint Wireless will present one face to the customer, while delivering an array of LMDS products and systems," says Rickie Currens, corporate vice president and general manager, Motorola Ground Systems Division.
"Cisco is focused on opening up Old World telecommunications infrastructures and accelerating the delivery of New World broadband services to businesses and consumers over Internet-based infrastructures. Under this agreement, Cisco and Motorola are bringing a New World Internet platform to the wireless industry " said Don Listwin, executive vice president, Cisco Systems. "One of the largest new opportunities for service providers will be delivering broadband Internet services over the air."
Addressing what experts believe will be a US$2 billion-plus market by 2003, both companies are establishing a single organization, SpectraPoint Wireless, that will be focused on delivering a broadband wireless solutions that combines high-speed Internet-based data, voice and video services for the LMDS radio spectrum.
LMDS is a broadband fixed wireless point-to-multipoint communication system. LMDS can replace existing phone lines, cable and other infrastructures without construction and extra cabling work by using a small unobtrusive dish at the customer-end for reception. LMDS provides a single information stream that can carry high-speed data traffic into the home or business, at significantly lower costs than equivalent connections today. The technology provides an effective "last mile" solution for the incumbent service provider and can be used by competitive service providers to deliver services directly to end-users.
Most importantly, LMDS technology offers service providers a method of providing high-capacity local access that is less capital-intensive than a traditional wire-line solution, faster to deploy than wire-line, and able to offer a variety of applications such as data, voice and video.
On February 3, 1999, Cisco and Motorola announced their shared architectural vision to deliver an open Internet-based framework for the cellular industry, intended to work across all wireless standards such as (GSM - Global System for Mobile Communication; CDMA - Code Division Multiple Access; TDMA - Time Division Multiple Access, etc.). This announcement included establishing Internet Solution Centers that will bring end-to-end solutions to our customers through testing, certification and training facilities.
The combination of Motorola's wireless deployment expertise with the networking capabilities of Cisco, delivered by SpectraPoint Wireless is unparalleled in the industry. Customers will finally be able to purchase a total end-to-end broadband wireless solution that provides the depth and breadth of products, services, architectures and complete solutions to meet their business needs. The transaction is expected to become final on June 30th, pending receipt of government approvals and execution of definitive agreements. In the new company, Motorola will be the majority stakeholder and Cisco will hold a minority stake.
Prior to the formation of SpectraPoint Wireless, Cisco Systems, Inc. and Bosch Telecom, Inc. had been working under a strategic alliance for the past year and have developed networks for the top LMDS License Holders in North America and Australia. According to a 1998 study conducted by Pioneer Consulting, the LMDS marketplace will grow from $241 million in 1999 to $1.2 billion by 2001. The growth rate is projected to double to $2.3 billion by 2003. SpectraPoint Wireless is offering the first LMDS product authorized for commercial use in Canada as well as the US to address this emerging market.
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