NSN parts ways with WiMax

The writing for NSN’s exit was on the wall after NSN watched its initially high momentum in WiMax peter out over the last two years. In 2007, Sprint (NYSE:S) named NSN—then Nokia Networks—as a principle 4G radio access vendors along with Motorola (NYSE:MOT) and Samsung. But in 2008 Sprint took away NSN’s initial launch market Dallas-Fort Worth, awarding it to Samsung, as NSN failed to deliver a commercial version of its Flexi base station on time. In January, right after Sprint and Clearwire (NASDAQ:CLWR) merged their 4G assets, NSN’s parent Nokia called its commitment to WiMax into question by canceling production of its only WiMax device, the N810 Internet Tablet. Meanwhile, Clearwire got cozy with Motorola and Samsung. In May Clearwire chief strategy officer Scott Richardson revealed that NSN was effectively out of loop—at least on the initial round of deployments. Richardson did hold out the possibility of NSN competing for a third vendor slot in the future, putting NSN back at square one.

NSN’s spokesperson said the vendor wasn’t writing off WiMax but feels it must focus its attentions on the much larger LTE and high-speed packet access (HSPA) markets. By supporting WiMax customers through its services division, NSN is continuing a strategy that allows it to support any operator, no matter what network they deploy, even if it isn’t the primary equipment vendor.

“Nokia Siemens Networks still believes there is a role for WiMax technology, especially in emerging markets with a low broadband penetration rate and in the US, where a significant amount of spectrum is available,” NSN said. “However, we also see that the mobile broadband market is converging around LTE and HSPA+ technologies, and that we need to respond to our customers' business needs. This partnered approach for WiMax enables us to do that and serve the specific needs of our customers.”

NSN now joins the growing ranks of vendors who are throwing their full R&D and political weight behind LTE. NSN has already developed a Flexi base station, which can be outfitted with LTE, though it hasn’t yet announced a commercial radio contract. It is hoping to broaden its potential market by purchasing Nortel’s CDMA and LTE assets. NSN plans to incorporate Nortel’s highly-touted LTE software and algorithms into its Flexi architecture, giving what NSN hopes will be a technology edge over its competitors. With the CDMA assets, NSN CEO Simon Beresford Wylie said the vendor can establish a huge customer base in North America, where much of the initial 4G activity is taking place.

But NSN has plenty of competition for those assets. It has submitted a bid for $650 million for the businesses, but on Tuesday a group of Nortel creditors offered up $725 million for the same assets, starting a bidding war. Research in Motion (NASDAQ:RIMM) is also interested in Nortel’s wireless goods and has said it is willing to pay as much as $1.1 million for them. But RIM also claims Nortel is blocking its bid, preventing the fellow Canadian vendor from competing for them.