Motorola, Northern telecom to team up

February 11, 1992|By Anthony Ramirez | Anthony Ramirez,New York Times News Service

NEW YORK --Two of the world's largest telecommunications companies, Northern Telecom Ltd. of Canada and Motorola Inc. of the United States, said yesterday that they planned to market their equipment jointly to large operators of cellular telephone systems, many of which have been buying equipment from rivals such as AT&T and LM Ericsson AB of Sweden.

The move is intended to strengthen the competitiveness of both companies, which had competed directly in some digital switches, the giant multimillion-dollar computers that can field thousands of calls.

Northern Telecom, which had revenues of $8.2 billion last year, and Motorola, which had $11.3 billion, are combining their marketing staffs and product lines to design products using the companies' merged expertise.

The 50-50 venture will seek to take advantage of the companies' strengths.

Northern Telecom is the biggest maker of central-office digital switches, the electronics that can fill an office floor and that compete directly with those of American Telephone & Telegraph Co.

Motorola is the largest maker of radio transmission equipment for cellular operators and cellular telephones, including the popular Micro-tac, one of the smallest pocket phones on the market.

The venture, to be based in the Chicago area, will try to sell to cellular operators in the United States, Canada and Latin America, but not in Europe yet.

The venture will have at least $500 million in revenues in its first year from existing contracts and a staff of 800 to 1,000 consisting of current employees, officials of both companies said at a news conference in Manhattan yesterday.

The companies plan to spend "several hundreds of millions of dollars" to begin the venture, officials said.

Analysts say that Motorola, based in Schaumburg, Ill., and Northern Telecom, with headquarters in Mississauga, Ontario, have been losing large contracts in recent years.

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