The rumours were right: Cisco has signed a deal to buy WiMax radio vendor Navini Networks for $330m (£159.8m).
The basic story is simple: the move gives Cisco an established fixed and mobile WiMax product line, and 70 existing Navini customers. Cisco plans to incorporate these products, for both fixed and mobile WiMax, into a package with its Wi-Fi outdoor nodes and mesh gear, for broadband wireless access to telecoms.
The price tag is $110m (£53.2m) less than Cisco paid in 2005 to buy Wi-Fi switch pioneer Airespace, whose products are now the mainstay for Cisco’s Wi-Fi offering for both indoor and outdoor wireless LANs, and for the company’s continued dominance of the enterprise WLAN market.
Cisco clearly hopes for a similar result by acquiring Navini. The company, founded by Silicon Valley entrepreneur Wu-Fu Chen and radio frequency expert Guanghan Xu, has reaped some $160m (£77.4) in venture backing as it developed and brought to market its RipWave MX line of mobile WiMax base stations, customer premises equipment, and adapters. A particular feature is the company's patented beamforming technology that can shape and direct WiMax radio waves, boosting range and performance.
WiMax is a cost-effective access technology to IP backbones, according to Larry Lang, vice president and general manager of Cisco’s mobility wireless business unit. Lang says the idea for the purchase grew out of Cisco CEO John Chambers’ meetings with carrier and network provider customers, especially in developing countries. "They want to invest in advanced telecommunications," says Lang. "But putting in next generation infrastructure is one thing. It’s another thing to connect to them [from client devices]. In many of these emerging markets, it’s impractical to run copper. The answer is radio waves."
Among the flock of well-funded WiMax startups, Navini offered several attractions, according to Lang. First, the vendor had a full WiMax product line available. "They have everything they need to build commercial WiMax nets," he says.
Secondly, it was deep intellectual property portfolio around its "smart beamforming" and MIMO technologies: 13 patents awarded, another 49 pending, according to Lang. Another reason was that Navini already had network deployments (initially of its "pre-WiMax" radio technology) in such diverse markets as Texas, Nigeria, Bulgaria, and Peru.