Motorola To Acquire 3G Player

Motorola announced it has entered into a definitive agreement to acquire Winphoria Networks, Inc., a core infrastructure provider of next generation packet based mobile switching centers for wireless networks, which Motorola plans to integrate into its Global Telecom Solutions Sector (GTSS) business unit.

Inset is Mike Champa, president and CEO of Winphoria Networks who is quoted below.

The completion of the acquisition is subject to customary closing and regulatory conditions and is expected to occur in the second quarter. Motorola intends to purchase the privately held concern in an all cash transaction. Additional terms of the agreement were not disclosed.

The acquisition will provide Motorola with additional capability to deliver on its strategy to provide complete networks to support operators' 2.5 Generation (2.5G) - 3rd Generation (3G) systems worldwide. GTSS will increase its technology capability, enabling it to develop better choices for cost- effective, enhanced featured mobile switching center solutions.

"In acquiring Winphoria, we will augment our strategic position by adding an innovative core telecom switching capability to our portfolio and by providing a competitive media gateway solution. These translate into direct benefits for our carrier customers and prospects by helping them reduce operating costs, and by offering them a software-driven switch that can be easily upgraded and enhanced at lower cost," said Christopher B. Galvin, chairman and chief executive officer, Motorola, Inc.

Adding the soft-switch will address a long-standing need in Motorola's network infrastructure solution. It will add core functionality in a way that complements Motorola's existing outsourced circuit-switching portfolio. Customers will still be able to make the choice to purchase traditional circuit switches based on our existing switch supplier relationships, however the addition of soft-switch technology will enable GTSS to provide less expensive, yet more versatile, switching solutions to operators as they migrate to technologies that will support integrated voice, data and video applications.

"We believe soft-switch technology has the potential to impact the wireless networking industry," said Adrian Nemcek, executive vice president of Motorola and president and chief executive officer of GTSS. "The acquisition of Winphoria -- and its more than 100 highly skilled associates -- will strengthen GTSS' value proposition by enabling us to offer operators an enhanced portfolio of network systems in addition to recently announced offerings of network management services and application and integration solutions."

"We are pleased and excited to join the Motorola GTSS unit," said Mike Champa, president and CEO of Winphoria Networks. "Our cutting-edge solutions and entrepreneurial spirit will benefit from Motorola's scale and market presence. We see this combination as the ideal way to bring our pioneering technology to the global marketplace."

Soft-switches have several significant advantages over traditional legacy circuit switches. They are particularly appealing in emerging markets and among early adopters in mature markets where operators find them an attractive option for upgrading network capacity. The efficient performance and affordability of the soft-switch, combined with the ability to support 2G and 3G networks simultaneously, is projected to dramatically increase demand so that they outnumber traditional circuit switches by 2012.

Soft-switches require less room, less power to operate, and can be deployed much more quickly than traditional legacy circuit switches. In addition, soft-switch architectures allow rapid feature development and high core networking flexibility. For example, Winphoria's soft-switch architecture, as it develops over time, will also allow for server-based applications such as Push-to-Talk solutions. These advantages translate into potential savings for operators including lower capital expenditures, and switch-operating costs associated with technology migration and transport costs.

Motorola GTSS announced an OEM agreement with Winphoria in August 2002. Through that relationship the first commercial trial of the Winphoria soft- switch, branded the Motorola Soft-Switch (MSS) began in Asia. CDMA 1X network customer trials are currently underway in North America and Asia, with limited commercial introduction slated for June 2003.

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