Due to the move to IP network architecture and because of its recent acquisitions in the mobile industry, research firm Strategy Analytics is warning that Cisco Systems could grow into a major player in the wireless network equipment space, challenging the likes of Ericsson (NASDAQ:ERIC), Nokia Siemens Networks and Alcatel-Lucent (NYSE:ALU).
"The transition of mobile networks to 'All-IP' networking has created an opportunity for traditional fixed IP vendors like Cisco to target mobile networks as a growth area," wrote Strategy Analytics' analyst Sue Rudd in a recent report. "It has also driven the leading Telecoms Equipment Manufacturers (TEMs)--Ericsson, Alcatel-Lucent, Huawei and Nokia Siemens Networks--to develop significant in-house IP routing expertise and service platforms. Now these IP players and the TEMs are increasingly competing head-to-head to gain market share as leading providers of the next generation mobile IP infrastructure."
Rudd notes that Cisco is already starting to win business from mobile operators; MetroPCS last month inked a deal with Cisco to aid its transition to IPv6 technology, shortly before T-Mobile US (NYSE:TMUS) closed its acquisition of MetroPCS.
Cisco's ambitions represent the culmination of a shopping spree that now totals $1.5 billion. Cisco paid $475 million for Intucell, which specializes in self-optimizing network (SON) software for radio access network (RAN) and small cell integration; an undisclosed amount for BroadHop, which provides more than 70 policy installations at service providers around the world; an undisclosed amount for ThinkSmart, provider of location intelligence and analytics; and $1.2 billion for Wi-Fi and cloud networking vendor Meraki.
Strategy Analytics said that the acquisitions, put together, could allow Cisco to present a "next generation 'All IP' flat network architecture and scalability" that could threaten established players the space.
To be clear, Cisco doesn't build large cell sites, but the company believes that it can still play a major role in the evolution of wireless networks that are increasingly looking to small cells to improve coverage and expand capacity.
"I see macro radio vendors' small cell strategy as 'number one, build more macro,'" Jared Headley, senior director of small cell solutions within Cisco's mobility business group, recently told FierceBroadbandWireless. "We believe the mobile network needs to be more dynamic, and there is so much information in the network that is valuable in so many different ways to optimize and monetize."
Of course, Cisco faces series challenges in its attempts to grow into a major wireless network equipment supplier. Rudd noted Cisco must work to fully integrate its technology acquisitions into its product portfolio, and it will need to partner with other software and semiconductor providers in order to flesh out its offerings.
Nonetheless, Rudd pegs Cisco as one to watch in wireless: "As it creates a truly integrated RAN portfolio, Cisco potentially becomes a real threat to several of the TEMs--especially those who are focused on small cell solutions."
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