Cisco is planning to buy femtocell maker Ubiquisys for US$310 million (£205 million) in cash and retention-based incentives, the company announced yesterday.
Ubiquisys, which is located in the U.K., makes 3G and LTE small-cell technologies that provide connectivity across mobile heterogeneous networks for service providers.
"The acquisition of Ubiquisys further reinforces Cisco's commitment to service providers and strengthens its mobility expertise to deliver more intelligent mobile Internet networks," Cisco said.
Ubiquisys' technology can be used by mobile service providers to offload traffic to small-cell networks, which can help serve the rapidly growing use of Internet enabled devices, Cisco said. Small cells deliver a signal over a shorter range, allowing mobile users to get faster, more consistent voice and data connections, it added.
Cisco plans to expand its wireless portfolio and couple Ubiquisys' technology with its own mobility and Wi-Fi offerings, it said. "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," it added.
The acquisition makes good sense, said Dimitris Mavrakis, principal analyst at Informa Telecoms & Media. "It is the perfect complement for Cisco's existing business," he said, adding that Cisco didn't have small cells in its portfolio.
Cisco is aiming to become a one-stop shop for mobile networks, Mavrakis said. "Market wise it will probably not change the business trends. It will not directly impact the user experience," he said. "Cisco is interested in the technology."
Cisco is planning to acquire the entire business and operations of Ubiquisys. The acquisition is expected to close in the fourth quarter of the company's fiscal year 2013.