Cisco Is Buying Ubiquisys For $310M For A Big Move Into Mobile Coverage With Femtocells And Small Cells

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Cisco has just announced that it is buying UK-based Ubiquisys for $310 million to beef up its business in femtocells and small cells, technologies that help improve connectivity on mobile data networks indoors and short-range outdoor spaces. The deal is one of the biggest exits in European tech in the last several years.

Cisco says the $310 million figure is a combination of cash and employee retention incentives. The acquisition is expected to close in the fourth quarter of 2013.

The news follows on from Cisco’s acquisition in January 2013 of Intucell for $475 million, and of BroadHop in the same month, both of which also expand the company’s holdings in mobile infrastructure.

Specifically, Ubiquisys specialises in what’s called small-cell technologies, which help patch together coverage for 3G and LTE, as well as WiFi networks, for carriers, large enterprises and even private users in places where traditionally they have been patchy. This possibly most often used for indoor coverage, but also in outdoor areas where network connections may not be as strong, and mobile operators link up with broadband networks to improve coverage.

This is a business that Ubiquisys has built up over the years. It has some 70 carrier customers and others on its books, including T-Mobile, Google, SFR and Softbank.

Daryl Schoolar, an analyst at Ovum, notes that the acquisition will be particularly useful for Cisco’s strategy to extend into cellular services on 3G and LTE.

“Cisco is no stranger to small cells, but that has been primarily through its carrier Wi-Fi efforts,” he writes. “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’ small cell experience greatly bolsters Cisco’s small cell position.”

He also adds that this will help it reduce reliance on third parties for small-cell expertise, and fills out its product suite in targeting the carrier market.

“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,” he notes, adding that now in the area of licensed small cells, Cisco can also offer things like data analytics and evolved packet core needed to build a mobile network. “This isn’t something all of Cisco’s competitors can claim.”

The move comes at a time when we are seeing two other things happening: attention shifting to improving indoor coverage and services overall. Just last week, Apple acquired WifiSLAM for $20 million. WifiSLAM specialises in technology that lets applications pinpoint indoor location more accurately. It’s not clear whether this is something that Apple intends to offer to developers, integrating it into its SDK, or whether it’s something that will make its way to its iOS devices themselves. Perhaps both.

At the same time, more moves from the large enterprise titans to build out their products targeting mobile carriers. Oracle’s acquisition of Tekelec last week also fits into this trend.

Ubiquisys has been around since 2004 and has raised some $81 million in funding from backers that include Advent Venture Partners, Accel, Atlas Venture Partners and Yasuda Enterprise Development. The most recent round was in August 2012, when the company raised a venture round of $19 million from investors led by 5CCG / Sallfort Privatbank and including Mobile Internet Capital, the venture arm of NTT DoCoMo.

Ubiquisys has existing equipment partnerships with BroadCom, Texas Instruments and Intel. As those three already have existing relationships with Cisco, that could be a sign that all of that will remain intact.

In the meantime, Cisco says that it will be forming part of its Small Cell Technology group led by Partho Mishra.

Cisco and Ubiquisys’ announcement is here. An additional blog announcement from Hilton Romanski, head of corporate business development at Cisco, is below.

Today, I am pleased to announce Cisco’s intent to acquire Ubiquisys, a privately-held company headquartered in Swindon, UK for $310 million in cash and employee retention incentives. Ubiquisys is a leading provider of intelligent 3G and LTE (Long-Term Evolution) small-cell technologies that provides seamless connectivity across mobile heterogeneous networks for service providers.

The acquisition of Ubiquisys exemplifies Cisco’s innovation framework based on a build, buy and partner approach. 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.

As carriers around the world increase cellular data capacity to serve the rapidly growing population of smartphone and tablet users, adding small cells is one of the most cost-effective ways to multiply data capacity and make better use of scarce spectrum assets. Ubiquisys’ indoor small cells expertise and its focus on intelligent software for licensed 3G and LTE spectrum, coupled with Cisco’s mobility portfolio and its Wi-Fi expertise, will enable a comprehensive small cell solution to service providers that supports the transition to next generation radio access networks.

The acquisition of Ubiquisys further reinforces Cisco’s commitment to service providers and strengthens Cisco’s mobility capabilities to continue to extend the intelligent mobile network.

Ubiquisys’ product portfolio and team will be integrated into our Small Cell Technology Group led by Partho Mishra.