Summary:

Another month, another big acquisition to bolster Cisco’s portfolio for mobile carriers. This time it’s Ubiquisys, the highly-rated purveyor of small cells, SON technology and other operator-focused treats.

Ubiquisys femtocell

The networking giant Cisco has been into small cell technology for about five years, since it made a strategic investment in the picocell and femtocell outfit ip.access. However, Cisco was clearly not satisfied – its hunger for more small cell tech has now led it to offer $310 million in cash and employee retention incentives for UK-based Ubiquisys.

Small cells are effectively tiny cellular base stations that offload mobile data traffic onto a wired backhaul service. Along with good old Wi-Fi, they are seen as essential to warding off the so-called mobile data crunch, as they free up capacity on the macrocells that form the basis of cellular networks. Ubiquisys is something of a leader in the field, having recently been ranked number one (ip.access was number three) by ABI Research for enterprise and residential femtocells.

Ubiquisys is also into self-optimizing network architecture (SON). It also offers a “smart cell” system called EdgeCloud, delivered in partnership with Intel, that combines server and small cell functionality to deliver cloud applications from the edge of the network, a bit like a content delivery network (CDN) for mobile rather than fixed-line surfers.

This is the third major acquisition Cisco has announced in the last four months that is aimed at boosting its portfolio for mobile carriers — in December it was Broadhop (policy management) and in January it was Intucell (SON). According to a blog post on Wednesday from Cisco business development chief Hilton Romanski, the Ubiquisys deal “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”:

“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.”

Ovum analyst Daryl Schoolar issued a statement after the deal was announced, pointing out that Ubiquisys would give Cisco “much greater market credibility when it comes to 3G and LTE small cells” — after all, Cisco currently has one big femtocell customer in AT&T, while Ubiquisys has over 50 vendor and operator customers including Japan’s Softbank and France’s SFR.

“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 added. “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.”

Assuming the deal goes through, it is expected to close in the fourth quarter of this year. The Ubiquisys employees, who are based in the English town of Swindon, would join the Cisco Service Provider Mobility Group.

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