The pending acquisition of Motorola's mobile telecom equipment arm by Nokia Siemens Networks (NSN), which is pending approval by China's Ministry of Commerce, would make it more difficult for domestic rivals Huawei Technologies Co and ZTE Corp to enter the US market, an analyst said.
The deal has cleared every administrative hurdle it needs from the US, the European Union and Japan, among others. A Reuters report Wednesday said the completion of the deal would be pushed back to the first quarter of 2011.
"This delay is disappointing, but we're looking forward to completing the acquisition early in the new year," Nokia Siemens Networks CEO Rajeev Suri said in a statement Tuesday.
The deal will not only grant Nokia Siemens Networks a stronghold in the US market, but also enhance its technology in CDMA, a 3G mobile standard that Motorola has specialized in, said Yang Jingyu, head analyst with Gartner, an IT research and advisory firm, in Shanghai.
Nokia Siemens Networks, a 50-50 joint venture between Nokia and Siemens started initiated a $1.2 billion buyout of Motorola's telecom network equipment arm this July, after China's Huawei failed to reach agreement with Motorola, due to concerns that the deal would be rejected by US regulators.
Should the deal be completed, the Nokia Siemens Networks would overtake Huawei to become the second-largest mobile telecom equipment manufacture in the world, trailing only behind Ericsson.
This would complicate the chances for Chinese companies Huawei Technologies Co and ZTE Corp to gain access to the US market, said Zhao Guozhang, a telecom equipment analyst with iSuppli in Shanghai.
