Cisco's First 2013 Buy Bolsters Service Provider Mobility Group

Cisco will pay about $475 million, including cash and retention-based incentives, for the Ra'anana, Israel-based company, which marks Cisco's first acquisition of the new calendar year.

With carriers continuing to spend on Long-Term Evolution (LTE) 4G network infrastructure, they're also looking for self-optimizing network (SON) and other types of management platforms to optimize how cellular networks respond to increasing network demands and support for mobile devices, Cisco noted.

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"The mobile network of the future must be able to scale intelligently to address growing and often predictable traffic patterns," Kelly Ahuja, senior vice president and general manager of Cisco's Service Provider Mobility Group, said in a statement. "Through the addition of Intucell's industry-leading SON technology, Cisco's service provider mobility portfolio provides operators with unparalleled network intelligence and the unique ability to not only accommodate exploding network traffic, but to profit from it."

Cisco expects the acquisition to close in the current quarter. After that, Intucell's employees will join Cisco's Service Provider Mobility Group, reporting to Shailesh Shukla, vice president and general manager, Software and Applications Group.

Several of Cisco's recent acquisitions have, like Intucell, been tuck-ins for the Cisco Service Provider Mobility Group. In December, Cisco said it would acquire BroadHop, a policy control and service management specialist, and in November, said it would acquire Cariden, a maker of network planning, design and traffic tools for service providers.

M&A is expected to be rampant in the broader market for LTE/4G infrastructure tools as carrier spending on LTE continues to ramp. In a 2012 report, ABI Research projected the number of LTE subscribers to reach 785 million by 2017, up from 58 million in 2012. In another report, IHS iSuppli predicted that LTE infrastructure spending will be higher than 3.5G infrastructure spending for the first time in 2013.

Cisco, for its part, returned to its traditionally frequent pace of M&A in calendar year 2012, buying or announcing its intent to buy about a dozen companies.

PUBLISHED JAN. 23, 2013