STOCKHOLM Feb 21 (Reuters) – Swedish telecoms gear
maker Ericsson is to buy privately held WiFi
technology company BelAir Networks to boost its mobile broadband
offering.
Demand for wireless connectivity has boomed in the last
couple of years with the proliferation of mobile devices, such
as smartphones and tablets.
BelAir, which produces indoor and outdoor WiFi systems for
telecoms operators that allow people to surf the Internet
without a physical coupling to a network, has 120 staff.
” With this acquisition Ericsson will be able to
add the WiFi functionality to its micro base stations at a low
incremental cost, making its emerging small-cell cellular
infrastructure offerings more appealing,” said Pal Zarandy, a
partner at telecom consultancy Rewheel.
Telecom operators see WiFi hotspots as crucial to helping
them cope with wireless data traffic, which is expected to grow
26-fold in the next five years, according to Cisco, as
usage of video on mobile devices surges.
Other telecom equipment vendors would likely follow Ericsson
with acquisitions in the wireless hotspot sector, said analysts
and industry executives.
“The Ericsson acquisition of BelAir is a harbinger of things
to come, marking the beginning of a period of M&A activity in
the telecoms equipment sector,” said Selina Lo, president and
CEO of BelAir’s peer Ruckus Wireless.
“There is a huge land grab taking place in the wireless
industry right now as mobile operators try to solve the issues
of capacity and coverage, looking to smarter Wi-Fi technology,”
she said.
For example, China Mobile — the world’s largest
mobile carrier by subscribers — plans to deploy a million
hotspots and Japan’s second-largest mobile carrier, KDDI
, plans to increase its 10,000 Wi-Fi hotspots to 100,000
within six months.
“Ericsson will lead the way in the growing converged WiFi
and cellular market where improved end-user experience is the
driving force,” Ericsson CEO Hans Vestberg said in a statement.
“By integrating BelAir Networks’ market-leading products and
competence into Ericsson’s existing radio portfolio, we will be
able to do this more quickly.”
Ericsson did not give any financial details of the deal.
Jefferies was advising BelAir — which had raised some $43
million of venture funding — on the deal.