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April 5, 2005

Nokia prepares exit from PMR with sale to EADS

Finnish telecom equipment vendor Nokia is preparing to exit the professional mobile radio (PMR) business, in which high-performance push-to-talk (PTT) services are provided to government entities that include security forces.

By CBR Staff Writer

Talks have been initiated with German aerospace and defense services vendor European Aeronautic Defense and Space Company (EADS) NV with a view to the sale of its Professional Mobile Radio business unit. Nokia expects the sale to complete by the end of this year, with a likely price tag of around 90m euros ($116m).

Espoo-based Nokia sells PMR networking equipment that uses the Tetra standard. Tetra is short for Terrestrial Trunked Radio and uses lower frequencies than consumer mobile networks allowing high levels of geographic coverage for a given number of transmitters. This also makes it highly tolerant of local failures. However, the system currently trades these advantages off against a much lower user density per cell.

EADS, which though German is now based in Amsterdam, Holland, is in the PMR market with a different technology, namely Tetrapol, which despite the similarity in name is fundamentally different from Tetra in that it uses frequency division multiplexing (FDMA) rather than time-division (TDMA). A spokesperson for EADS said that though Tetra and Tetrapol are mutually exclusive technologies today, interoperability is technically possible and we plan to develop that capability.

A Nokia spokesperson said the company was exiting the PMR market to concentrate on commercial mobile telephony.

Other sector sources suggested that it may have decided that the investment in migrating its circuit-switched Tetra offering to a packet-switched one, which would enable it to carry data as well as voice, was not a justifiable one.

Nokia announced plans to data-enable its Tetra base stations in October last year, but may now have had a rethink. We made that investment about two years ago, said Jeppe Jepsen, EMEA business relations director for the government and enterprise business at Motorola, which alongside Nokia is the largest player in Tetra.

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