LONDON – Information technology equipment vendor Cisco Systems Inc. (San Jose, Calif.) has announced its intention to buy Ubiquisys Ltd., a provider of 3G and LTE small-cell basestation technologies for $310 million.
Ubiquisys (Swindon, England) was founded in 2004 by engineers formerly with Motorola which closed down a development site in the town. It has pioneered a number of technologies and software-based services for femtocell and small-cell basestations although the market has been slow to develop. ABI Research recently declared Ubiquisys the number one vendor for indoor small cell access points.
After the acquisition Ubiquisys employees will be integrated into the Cisco Service Provider Mobility Group, reporting to Partho Mishra. Cisco is set to pay approximately $310 million in cash and retention-based incentives to acquire the entire business and operations of Ubiquisys.
The acquisition is expected to close in the fourth quarter of Cisco's fiscal year 2013 which ends towards the end of July 2013, subject to customary closing conditions.
"Cisco is doubling down on its small cell business to accelerate strong momentum and growth in the mobility market," said Kelly Ahuja, senior vice president and general manager, Cisco Mobility Business Group, in a statement. "By acquiring Ubiquisys, we are expanding on our current mobility leadership and our end-to-end product portfolio, which includes integrated, licensed and unlicensed small cell solutions that are tightly coupled with SON, backhaul, and the mobile packet core."
The Ubiquisys acquisition will follow on from a couple of other Cisco acquisitions; BroadHop and Intucell.
Let's not forget that Cisco bought and later sold Linksys.
The real deal here is the integration of business and absorption of the profit made on Small Cell side of equipment. I do not think this is a big move, just a natural absorption of a provider into an integrated Cisco solution that provides to enterprises the WLAN and now LTE. The small cell market for equipment/solution providers is so fragmented that the gross margin will soon be reduced to modest values.
Funny how these recent topics intersect. IMO, small cells are the future of cellular communications, because I don't see anything but expansion in portable wireless. And small cells can scale up wireless access, to meet the demand, a lot more credibly than adding a few MHz of channel space to large cells.
From Motorola to Cisco. Very interesting. Given how so much Internet access has been migrating from wired to wireless, and given how Cisco has shown interest in more than just providing the "big iron" for core and enterprise networks, this move makes a lot of sense. All the best!
It makes sense for this little would-be disrupter of the Ericssons, Huaweis, Nokia Siemens Networks and AlcaLus would get snapped up by a Cisco that has a big service provider business but nothing much in base stations, let alone small cells.