The Wall Street Journal left out one key nugget in its report over the weekend that Motorola (MOT) and Nortel (NT) are considering a joint venture to operate their combined wireless infrastructure equipment business: They’ve already tried this — and failed. Way back in the early 1990s Motorola and Nortel combined their sales teams in North America to sell wireless gear, the heavy metal that phone companies buy so their customers can use cell phones. It was called Motorola Nortel Communications, and it was a flop. Customers preferred dealing with the original companies, and the two parents fought endless turf battles. The joint venture, which died in 1993, lasted just over a year. (One wonders if anyone at either company even remembers this ancient history. Probably not.)
Joint ventures can work, of course. It’s just hard to think of many that do. And in this case, you’ve already got two companies that have the common experience of failure. Perhaps the biggest difference, though, between 2008 and 1993 is that back then Motorola still wanted to be in this business. Today, the diminished giant just wants out.
UPDATE: A Motorola spokeswoman emailed a “no comment” regarding the Wall Street Journal report. She did, however, offer some thoughts on Motorola’s infrastructure business. They’ll be of interest only to insiders, but here they are:
* While the legacy market is slowing, Motorola is experiencing great momentum in wireless broadband and leads the market in WiMAX globally with 60 engagements with customers in more than 41 countries; this year we will be trialing LTE with key customers to enable greater consumer experiences
• That said, Motorola’s networks business is one of the only profitable companies in this area and has been profitable for the past quarters based on our normal ongoing business excluding any special charges.(we publicly stated this in our earnings calls); recently winning contracts with Zain Group in Saudi Arabia as well as Etisalat and Celtel Nigeria.
• In terms of iDEN we are continuing to see traction. In addition to the US customers we have, for example, there are over 5 million subscribers in Latin America alone.
