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January 4, 1998

MOTOROLA SELLS ARDIS NETWORK AND LOOKS TO IRIDIUM

By CBR Staff Writer

Motorola Inc is to get out of the business of operating communications networks in the US when it sells its Ardis wireless messaging network to American Mobile Satellite Corp. Reston, Virginia-based American Mobile will pay Motorola $100m for the network, half in cash and half in shares, although the deal is awaiting government approval. With Ardis no longer hanging round its neck, Motorola has cleared the way to concentrate on providing equipment for such networks, and to generate revenue from the Iridium satellite network, of which Motorola is the biggest investor. Iridium will be in competition with Ardis, although there are doubts that prices of the satellite network will be cheap enough to pose a serious threat to Ardis. Ardis was originally developed by Motorola and IBM Corp in the 1980’s and launched in 1990, but Motorola bought IBM’s 50% stake for $35m in 1994 (CI No 2,453). It remains the largest network for two-way data transmission in the US, and American Mobile is expected to expand the network’s services, targeted primarily at businesses, enabling it to transmit voice messages as well as data. The sale of the network by Motorola signals its continued plans to streamline its business, but plans ran into problems just before Christmas when Hayes Microcomputer Products Inc pulled out of buying the Illinois company’s analog modem business (CI No 3,316).

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