Motorola 2010 Annual Report Download - page 13

5
Large system integrators are seeking to move further into the government markets. The Company and
competitors in this segment may also serve as subcontractors to large system integrators and are selected based on a
number of competitive factors and customer requirements. Where favorable to the Company, we may partner with
large system integrators to make available our portfolio of advanced mission-critical services, applications and
devices.
Several other competitive factors may have an impact on our segment, including: the consolidation among
telecommunications equipment providers; evolving developments in the 700 MHz band; increasing encroachment by
broadband and IP solution providers; and new low-tier entrants. Numerous companies, including present
manufacturers of scanners, lasers, optical instruments, microprocessors, wireless networks, notebook computers,
handheld devices and telephonic and other communication devices may have the technical potential to compete with
our business. As demand for fully-integrated voice, data, and broadband systems continue, the segment may face
additional competition from public telecommunications carriers.
Payment Terms
Payment terms vary worldwide, depending on the arrangement. Generally, contract payment terms range from
30 to 45 days from the invoice date within North America and are typically limited to 90 days in regions outside of
North America. A portion of the contracts within our government and public safety customers include
implementation milestones, such as delivery, installation and system acceptance, which generally take 30 to
180 days to complete. Invoicing the customer is dependent on completion of the milestone.
We generally do not grant extended payment terms. As required for competitive reasons, we may provide long-
term financing in connection with equipment purchases. Financing may cover all or a portion of the purchase price.
Regulatory Matters
The use of wireless voice, data and video communications systems requires radio spectrum, which is regulated
by governmental agencies throughout the world. In the U.S., the Federal Communications Commission (“FCC”)
and the National Telecommunications and Information Administration (“NTIA”) regulate spectrum use by
non-federal entities and federal entities, respectively. Similarly, countries around the world have one or more
regulatory bodies that define and implement the rules for use of the radio spectrum, pursuant to their respective
national laws and international coordination under the International Telecommunications Union (“ITU”).
Consequently, the results of the segment could be positively or negatively affected by the rules and regulations
adopted by the FCC, NTIA or regulatory agencies in other countries from time to time. The availability of
additional radio spectrum may provide new business opportunities and the loss of available radio spectrum may
result in the loss of business opportunities. Regulatory changes in current spectrum bands may also provide
opportunities or may require modifications to some of our products so they can continue to be manufactured and
marketed.
The segment manufactures and markets products in spectrum bands already made available by regulatory
bodies. These include voice and data infrastructure, mobile radios and portable or handheld units. Our products
operate both on licensed and unlicensed spectrum. In addition, new spectrum bands and modified regulations
provide possible opportunities for new business.
As television transmission and reception technology transitions from analog to more efficient digital modes,
various countries around the world are examining, and in some cases already pursuing, the redevelopment of
portions of the television spectrum. In the U.S., pursuant to federal legislation, analog television stations ceased
operation in the broadcast television spectrum on June 12, 2009. As a result of this transition, 108 MHz of
spectrum historically used for broadcast television, now known as the 700MHz band, is being redeveloped and
deployed for new uses (the so-called “digital dividend” spectrum), including broadband and narrowband wireless
communications. This spectrum can provide new opportunities for the Company and for our competitors. Under
rules adopted by the FCC, 24 MHz of the 700 MHz band already allocated by the FCC will support new public
safety narrowband and broadband communications systems. Prior to the end of the transition from analog to digital
television on June 12, 2009, over 40 public safety customers were already implementing narrowband 700 MHz
systems in areas where television incumbency was not an issue. Now that the spectrum is open nationwide,
additional agencies have also been deploying narrowband systems and others are in the planning stages.
The FCC is also making provisions for a 700 MHz band nationwide public safety broadband network that may
be built over the next 10-15 years. In May 2010, the FCC issued 21 conditional waiver grants to public safety