September Bonanza for Motorola

Struggling mobile phone maker Motorola Inc (MOT) is sailing through nicely with its Broadband Mobility (consisting of Home & Network Mobility and Enterprise Mobility segments) businesses.

On Sept. 29, Cincinnati Bell Inc. (CBB - Analyst Report) has selected Motorola's gigabit passive optical network (GPON), edge modulation, encryptor and encoding solutions for deployment in its fiber network. Motorola’s GPON solution will enable Cincinnati Bell to deliver next-generation video technologies including high-definition TV (HDTV), video-on-demand (VOD) and standard definition television programming.

On Sept. 22, Middleburgh Telephone Company selected Motorola's gigabit passive optical network (GPON) to enable the delivery of rich, personalized media experiences to its subscribers. Motorola solutions inherently support SCTE-55-1, or Motorola RF return path functionality, for easy integration with its RF set-tops and head-end equipment.

On Sept. 21, Motorola was awarded a contract to supply EuroDOCSIS 3.0 digital video modems to UPC Broadband for its pan-European network. UPC Broadband is the European division of Liberty Global Inc (LBTYA - Analyst Report), the largest cable TV operator in Europe. Although the financial terms of this contract have not been disclosed, we believe the UPC contract will act as a major catalyst for the company’s cable modem termination system business since Motorola is quickly losing its ground to both its larger peer Cisco Systems Inc (CSCO - Analyst Report) and the emerging dark-horse Arris Group Inc (ARRS - Analyst Report).

In August, Motorola received a shot in the arm after being selected as a key development partner of KDDI Corp’s next-generation LTE (Long Term Evolution) network. This is the company’s first public order for LTE technology. Motorola will implement the basic infrastructure of RAN (Radio Access Network) and base stations for the KDDI’s LTE network. We believe that the contract size may exceed $1 billion.

In addition to doing a complete revamp of its loss making Mobile Devices division, Motorola is continuously introducing innovative products for broadband communications infrastructure, enterprise mobility and public safety solutions. According to our view, the market for broadband network and enterprise solutions will remain healthy in the long-run. We maintain Neutral recommendation for Motorola.

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