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Motorola ups NetSpeak stake

The companies will combine Motorola's wireless technology with NetSpeak's IP telephony gear to allow multimedia transmissions over wireless networks.

Motorola (MOT) said today that it is expanding its relationship with voice, video, and data communications software provider NetSpeak (NSPK).

The companies will combine Motorola's wireless technology with NetSpeak's IP Telephony gear to allow IP multimedia transmissions over wireless networks. Motorola has also committed to buying $30 million worth of NetSpeak products and will increase its equity investment in the company by purchasing 3 million, or 34.5 percent, of NetSpeak's outstanding shares. Last June, Motorola acquired 452,855 shares of common stock in NetSpeak.

Motorola said it has also been granted an exclusive license to develop radio frequency products using NetSpeak's technology. That means the company can offer IP-delivered voice, data, fax, audio, and video services in its cellular phones, satellite networks, pagers, and two-way radios.

Motorola is the second company this year to take a major stake in NetSpeak. In January, Bay Networks (BAY) bought $37.6 million worth of NetSpeak stock, giving it roughly 9 percent of the firm.

Communications companies such as Motorola are rushing to add IP capabilities to data networks. Researchers expect voice traffic to be eclipsed by data traffic by the year 2000, a startling turn of events for the public network infrastructure that has most carriers scrambling to deal with the changes brought on by the explosion of the Net.

Telecommunications deregulation across the globe has also contributed to the discussion of new technologies, like using IP for voice, video, and data.

Use of IP for voice, video, and data functions allows network service providers to offer value-added data and voice services to customers easily since everything is based on the same protocol.

Bay plans to integrate various NetSpeak technologies over the next year and a half, starting with a voice- and fax-over-IP software gateway for the company's BayStack line of switching hardware for corporate enterprise networks.

NetSpeak, in its initial public offering last May, floated out 2.4 million shares and raised $21 million in its IPO. In early morning trading today, NetSpeak stock rose 5/8, to 27-1/8.