Telecom Lead America: Cisco is set to acquire 3G and LTE / 4G small-cell provider Ubiquisys for $310 million.
The acquisition is part of Cisco’s plan to increase its presence among telecom operators. Infonetics forecasts that the global small cell market will grow from a very small base now to $2.7 billion by 2017.
2013 is shaping up as a kick-off year for small cells, driven by 4G small cells deployed for capacity upgrades, said Infonetics Research in a 25 March 2013 note.
Telecom operators such as AT&T, Sprint, and Verizon Wireless in the U.S., Vodafone in Europe, LG U+ in South Korea, and NTT Docomo in Japan have announced small cell plans. These mobile operators are looking at enhancing the capacity of saturated macrocellular networks to deliver denser, higher-capacity coverage to tech-savvy populations in urban areas.
Ubiquisys’ indoor small-cell products and its focus on software for licensed 3G and LTE spectrum, coupled with Cisco’s mobility and Wi-Fi portfolio, will enable a comprehensive small-cell solution for service providers.
Kelly Ahuja, senior vice president and general manager, Cisco Mobility Business Group, said: “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.”
The Ubiquisys acquisition also complements Cisco’s mobility strategy along with the recent acquisitions of BroadHop and Intucell, reinforcing research and development such as service provider Wi-Fi and licensed radio.
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.”
Ubiquisys has over 50 customers (vendors and operators) that include Softbank (Japan), SFR (France), and Network Norway.
“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,” Schoolar added.
Cisco will be trying to compete with Nokia Siemens, Huawei, etc. in the small cell business.
Nokia Siemens Networks highlighted an extended small cell portfolio at Mobile World Congress 2013. This includes new Micro and Pico base stations for LTE and Wi-Fi, designed to complement standard base station capacity in hot zones – areas of high subscriber density.
Geographically, Infonetics expects Asia Pacific to lead the small cell market in 2013 with 50 percent of all units shipped, followed by EMEA with 34 percent, and North America with 14 percent. This means that Cisco will try to get more business from telecom operators in these regions.