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Motorola to Unveil Cellular Deal

Telecom: Company is expected to announce it's won contract to set up digital network in Japan.

March 26, 1997|From Associated Press

Motorola Inc. is expected to announce today that it has won a lucrative contract to set up a digital cellular telephone network for several Japanese companies.

The multiyear contract is potentially worth billions of dollars, the Wall Street Journal reported Tuesday, citing sources familiar with the deal.

Laura Cain, a spokeswoman at Motorola's headquarters in Schaumburg, Ill., would not deny the report.

"I can't tell you you're wrong," she told Associated Press. She said she could not release details until the announcement this morning.

Motorola stock rose $1 to close at $58.375 on the New York Stock Exchange.

Japanese contracts could be a further validation of Motorola's decision to place its bets on a relatively new technology called code-division multiple access, or CDMA. The technology is one of a new generation of personal communications services that promises clearer connections, lower bills, greater security and more options--such as voicemail and paging--than regular cellular phones.

But unlike cellular phones, the new pocket-size phones can be used only in areas where equipment is in place to send and receive the digital signal.

That has led to consumer confusion in the United States, where different phone companies have chosen technologies that aren't compatible with others and, therefore, make a cellular phone inoperable in certain areas. Companies are developing phones that combine digital and analog capabilities to allow a user to switch over in areas where the PCS system doesn't work.

The Japanese deal probably would not have such problems. It appears to be with two of Japan's largest providers and would probably cover most of that country's calling area. Japanese participants include DDI Corp. and Nippon Idou Tsushin Corp., the Journal reported.

CDMA, developed by San Diego-based Qualcomm Inc., allows cellular providers to squeeze more digital signals into a particular slice of the radio network.

Last year, Motorola chose not to participate in Sprint PCS' $3-billion roll-out of CDMA across the United States, citing disagreements over financing. That joint venture between Sprint Corp., Tele-Communications Inc., Comcast Corp. and Cox Communications was finally launched later in the year, but only in limited cities.

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