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Cisco targets AT&T's SON technology with $475M purchase of Intucell

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Cisco Systems said it will pay $475 million to buy an Israeli mobile networking startup, Intucell, that specializes in self-optimizing network (SON) software. The acquisition is part of a string of recent deals Cisco has made to add more intelligence to its networking gear and servers for cellular and Wi-Fi networks.

Intucell's SON software allows carriers to plan, configure, manage, optimize and deal with issues on cellular networks automatically, all based on real-time network demands. Once the deal closes, Intucell employees will be integrated into Cisco's Service Provider Mobility Group. The deal includes retention-based incentives to acquire the entire business and operations of Intucell and is expected to close in the third quarter of Cisco's fiscal year 2013, which ends in September.

As data traffic has increased, SON has become a hot topic for carriers and vendors alike, as operators seek to more dynamically manage network traffic and resources. AT&T Mobility (NYSE:T) has said it plans to continue to use SON to improve dropped call rates and throughput speeds and reduce the loads on cell sites. In fact, Kelly Ahuja, senior vice president and general manager of Cisco's Service Provider Mobility Group, told FierceWireless that AT&T is an Intucell customer. He said Intucell has been working with around 10 operators worldwide on trials and deployments, and while he declined to name them he said many are Cisco customers as well.

Ahuja noted that Intucell's technology "takes intelligence from wireless networks and allows a dynamic reconfiguration of the network." This is done via a software platform in carrier data centers, he said, not at the radio level, and works in multi-vendor and multi-network environments.

Ahuja said Cisco made the Intucell deal because more carriers need to maximize their existing spectrum and network capacity. He said Intucell's SON technology can help carriers more efficiently deploy heterogeneous networks. 

Privately held Intucell was founded in 2008 and one of its early investors was venture capital firm Bessemer Venture Partners. Bessemer made a $6 million investment in 2011 for about half of Intucell, making its stake now worth around $230 million.

The deal is the latest in a series of acquisitions for Cisco, which in November agreed to buy Wi-Fi and cloud networking vendor Meraki for $1.2 billion, augmenting its capabilities in those areas as more networks turn to Wi-Fi to offload traffic. Cisco said the Meraki deal would allow it to continue to move toward a world where it offers more software-centric networking solutions for carriers and service providers.

The Meraki deal followed Cisco's September acquisition of Wi-Fi analytics firm ThinkSmart Technologies. Cisco is leveraging that acquisition to provide enterprises, airports, museums and others with a Wi-Fi location data analytics platform to help them enhance customer experiences and make money using indoor Wi-Fi location data. By 2016, Cisco expects more than half of the world's Internet traffic to stem from Wi-Fi connections.

Ahuja said the deals all involve companies that take network intelligence and then "allow for optimization and monetization opportunities." Cisco's strategy, he said, is to use all of that information and analytics and apply it to a business or technical policy with a carrier.

For more:
- see this release
- see this TechCrunch article
- see this WSJ article (sub. req.)

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