Cisco strengthens small cell portfolio with $310M deal for Ubiquisys

Cisco Systems is boosting its small cell and femtocell activity by acquiring UK-based Ubiquisys for $310 million (£205 million). The deal is scheduled to close by the end of 2013 and involves a combination of cash and employee retention incentives.

This move follows Cisco's purchases in January of Intucell for $475 million and BroadHop in December, both of which also expand the company's holdings in mobile infrastructure.

Kelly Ahuja, senior vice president and general manager of Cisco's Service Provider Mobility Group, told FierceWireless that Cisco was drawn to Ubiquisys not just for its hardware capabilities but also for its software, which allows carriers to turn on small cells through the cloud when extra capacity is needed. That kind of ability, Ahuja said, is part of Cisco's broader strategy to add more intelligence to network designs. "This is not just about the small cell," he said. "It's about the mobility architecture and intelligence in the network architecture."

Ovum analyst Daryl Schoolar noted that Cisco's experience with small cells has primarily been through its Wi-Fi effort with operators, and its femtocell work with AT&T.

"Outside of its work with AT&T, Cisco's licensed small cell experience has been hard to find," Schoolar in a statement. "Ubiquisys, on the other hand, has over 50 customers (vendors and operators) that include Softbank (Japan), SFR (France), and Network Norway. Ubiquisys' small cell experience greatly bolsters Cisco's small cell position."

"Ubiquisys provides Cisco much greater market credibility when it comes to 3G and LTE small cells," he added. "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."

Ubiquisys already has existing technology agreements with Broadcom, Texas Instruments and Intel, according to TechCrunch. Given these three semiconductor firms already have existing relationships with Cisco, these partnership deals could remain intact.

According to a recent report from Infonetics Research, increasing demand for small cells, driven by LTE deployments, will push the small cell market to a value of $2.7 billion by 2017.

Fore more:
- see this Cisco statement
- see this TechCruch article
- see this Ovum statement

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