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Cisco Scoops Up Starent to Manage Mobile Data Deluge

ciscostarentThe rush to deliver the web on the go has led Cisco (s csco) to offer $2.9 billion for Starent (s star), a telecommunications equipment company whose boxes help manage the different types of traffic traversing mobile and wired networks. The gear is especially important for mobile networks, as they handle more types of radio signals and where limited resources such as spectrum force operators to prioritize different types of IP traffic.

Starent’s boxes help carriers translate between their existing circuit-based networks and all IP-based 4G networks such as WiMAX or LTE. The gear sits between the core network and the variety of access technologies, which can range from cellular radio to Wi-Fi or femtocells. Because each box can handle multiple signals, it replaces the need for several access-specific boxes from competitors such as Cisco, Alcatel-Lucent and Huawei.

This is a pretty esoteric piece of equipment, but carriers like Verizon (s vz) and Vodafone are customers of Starent. A Deutsche Bank report from last month estimated that Starent, which reported sales of $254 million for 2008 had potential orders of $2.5 billion through 2011. Cisco’s decision to buy it gives the networking giant access to that potential customer base, as well as neutralizes a competitor whose gear is designed to handle the increasing complexity in networks, as wireless and wireline operators try to sate our need for ubiquitous connectivity.

For Cisco, it shows that even as it plunks down $3 billion on a video conferencing equipment maker and pushes its new line of servers, it still has its eye on its service provider customers.

6 Responses to “Cisco Scoops Up Starent to Manage Mobile Data Deluge”

  1. Cisco has been struggling in this one area, so the acquisition was somewhat expected. Opportunities in 4G and smart grids are enormous to ignore. Also Cisco has done lot of financial re-structuring and raised about $4 Billion in additional cash recently. So good use of capital to position the company well as the economy comes out of recession –