Cisco announced its intention on 3 April 2013 to acquire privately held small cell manufacturer Ubiquisys for $310m. Headquartered in Swindon, UK, Ubiquisys is a provider of intelligent 3G and long-term evolution (LTE) small-cell technologies that provide seamless connectivity across mobile heterogeneous networks (HetNets) for service providers.
The move marks a second acquisition in the small cell space following Cisco’s purchase of Wi-Fi manufacturer Meraki in 2012, which augmented its own Wi-Fi product portfolio. However, the acquisition of Ubiquisys provides Cisco with small cell technology in the licensed cellular space.
Commenting on the proposed acquisition, Daryl Schoolar, principal analyst at Ovum, said: ‘Cisco is no stranger to small cells, but that has been primarily through its carrier Wi-Fi efforts. In the licensed spectrum small cell space Cisco has basically been reliant on its femtocell relationship with AT&T.
‘Outside of its work with AT&T, Cisco’s licensed small cell experience has been hard to find. 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.
Schoolar continued: ‘The acquisition doesn’t just provide Cisco with Ubiquisys’ small cell knowhow; it also gives Cisco experience in working with a broader set of mobile operators. Ubiquisys provides Cisco much greater market credibility when it comes to 3G and LTE small cells. 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.
‘Small cell vendors should take Cisco very serious. Not only is Cisco greatly improving what it can offer mobile operators in terms of a licensed small cell, Cisco can also offer those mobile operators other tools, like data analytics, SON, and evolved packet core needed to build a mobile network. This isn’t something all of Cisco’s competitors can claim,’ concluded Schoolar.
In a statement issued today, Cisco said the acquisition of Ubiquisys further reinforces its commitment to service providers and strengthens its mobility expertise to deliver more intelligent mobile Internet networks.
Cisco said that as mobile service providers around the world increase voice and data capacity to serve the rapidly growing use of Internet-enabled devices, offloading traffic to small cell networks is a cost-effective way to increase capacity and make better use of spectrum assets.
Small cells deliver their signal over a shorter range, which allows mobile users to get a faster, more consistent voice and data experience. Ubiquisys' small-cell solution adds dynamic intelligence at the edge of the network, enabling service providers to better monetise and optimise their mobile networks.
Ubiquisys' indoor small-cell expertise and focus on intelligent software for licensed 3G and LTE spectrum, coupled with Cisco's mobility portfolio and Wi-Fi expertise, will enable a comprehensive small-cell solution for service providers, which supports the transition to next-generation radio access networks.
Cisco said that together, Ubiquisys and Cisco will offer a differentiated connected experience to the end-user by providing service providers with a comprehensive solution that extends an intelligence layer across the mobile network, the Cisco statement said.
‘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.
‘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. For service providers, Ubiquisys supports cost effective coverage and capacity that delivers a differentiated customer experience,’ said Ahuja.
The acquisition of Ubiquisys exemplifies Cisco's innovation framework based on a build, buy and partner approach, according to the company. The Ubiquisys acquisition also complements Cisco's mobility strategy along with the recent acquisitions of BroadHop and Intucell, reinforcing in-house research and development such as service provider Wi-Fi and licensed radio. These technologies will tie together the mobility architecture that leverages the intelligence of the network from the wireless edge of the network into the wired core.
Upon the close of the acquisition, the Ubiquisys employees will be integrated into the Cisco Service Provider Mobility Group, reporting to Partho Mishra, vice president and general manager, Service Provider Small Cell Technology Group.
Under the terms of the agreement, Cisco will pay approximately $310m 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, subject to customary closing conditions.