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Cisco Acquires Mobile Cell Service Ubiquisys For $310M

April 4, 2013
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Michael Harper for redOrbit.com — Your Universe Online

Cisco announced yesterday that they had picked up UK-based femtocell makers Ubiquisys for $310 million. According to the Wall Street Journal, this sum will be partly paid in cash and partly in incentives to retain the 130-member team who will keep their offices in the UK.

This deal is expected to close in Cisco´s fourth quarter of fiscal 2013.

Femtocells are small antennas which help boost mobile service coverage indoors. Cisco recently purchased two other mobile-focused companies earlier this year, Intucell and BroadHop. The former of the two companies helps mobile carriers spread out heavy traffic across multiple towers, effectively expanding their coverage. Cisco bought Intucell in January for $475 million, according to TechCrunch.

By acquiring Ubiquisys, Cisco has once more made a strong push to boost their mobile infrastructure and provide technology for mobile service providers.

Brian Marshal, an analyst with ISI Group, believes small cell technologies could be key in helping Cisco boost their offerings to mobile customers.

“Small-cell technologies are one of the most cost- effective ways to add data capacity and will grow in importance as service providers address the explosion of mobile network traffic,” said Marshall in a research report, according to Bloomberg.

“The acquisition adds to the mobility capabilities Cisco has been building up,” he added.

Ubiquisys´ small cells or femtocells can boost 3G and 4G coverage in crowded areas as well as create a strong Wi-Fi hotspot in homes and office spaces. The actual femtocell equipment is small enough to be tucked away in a corner, but the extra coverage they provide can be powerful for those who live in areas with shaky connectivity. Femtocells also help carriers by allowing them to use their spectrum more efficiently and reduce traffic on their networks.

One Ubiquisys executive told the Wall Street Journal that these small cells also help networks by improving the overall customer experience, noting that customer satisfaction increases by 94 percent when femtocells are deployed.

By picking up Ubiquisys, Cisco will no longer have to rely on third-parties to create small cell equipment.

Daryl Schoolar, an analyst at Ovum, told TechCrunch that this could greatly improve the American company´s offerings to mobile customers.

“Cisco will also benefit by having greater control over Ubiquisys´ product development cycle, freeing Cisco from having to rely on the development cycle of third-party partners like IP access,” said Schoolar. Cisco will now add the Ubiquisys technology to their existing folder of customer solutions, making them an even more attractive company to these service providers.

“Ubiquisys´ small cell experience greatly bolsters Cisco´s small cell position,” Schoolar said.

This deal marks one of the largest exits by a European company. It´s a point of pride for remaining businesses who hope to one day be picked up by a larger American company.

Mike Chalfen, a Ubiquisys investor with London-based Advent Venture Partners told the Wall Street Journal that he expects many more companies to be moved across the pond in the future.

“Europe has a lot of fantastic opportunities like this, high value businesses. This is not a one-of,” he noted.


Source: Michael Harper for redOrbit.com – Your Universe Online



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