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Cisco gobbles UK mobe mast maker - you know where this is going

Tiny cells in your Wi-Fi router - checkmate, Huawei

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Swindon-based Ubiquisys will soon be part of Cisco in a $310m (£205m) buyout. The networking colossus has, in effect, snapped up more than 50 customers wanting small cellular base stations and the technology they want.

Cisco will hand over cash and "retention-based incentives" to persuade key staff at the Brit biz to stay on. The deal should be done and dusted by September, putting Cisco into the vanguard of mobile infrastructure deployments and another US-owned UK innovator looking for a foothold in the industry.

The last one was Picochip, which was based in Bath and not a million miles from the Ubiquisys headquarters. Picochip designed processors for femtocells, which are low-power phone masts that extend mobile network coverage into homes and offices. Picochip was bought by Californian outfit Mindspeed Technologies 15 months ago for $52m.

While Picochip focusses on the silicon, Ubiquisys makes complete devices and thus competes against Mindspeed's networking gear. Both British businesses offer entry to a field critical to the future of mobile networks.

Femtocells, as they were initially known, are self-configuring boxes designed to be mailed out to customers lacking mobile network coverage. Once switched on, and plugged into a broadband connection, the femtocell finds a licensed frequency that is empty and backhauls voice calls and mobile data over the public internet. When launched they were expected to revolutionise portable communications and make Wi-Fi redundant.

But that didn't happen because the little boxes weren't cheap enough and being locked to one licensed operator was a problem for users. Other than a few launches, such as Vodafone's Sure Signal, the industry lost interest. But the technology designed for femtocells can be used in bigger base stations, which is where things got really interesting.

The Femtocell Forum, a non-profit formed to promote the tiny cellular gear, rapidly rebranded itself as The Small Cell Forum. Its members, including Ubiquisys, now punt out self-configuring cells to network operators all over the world. The number of base stations providing phone connectivity could soar if these small cells are used: most of them just need CAT5 cabling and sometimes power-over-Ethernet to keep the logistics really simple; there's no need to map out the reception as the coverage radius per cell is small and the effects of buildings and pavements minimal; and the need for skilled engineers to install the kit is dramatic reduced.

It's not hard to imagine that the business is exploding.

The supply of network infrastructure has always been limited to a handful of players. Operators usually just pick one or two suppliers from Nokia Siemens Networks, Ericsson, Alcatel Lucent and Huawei - all of which together own about a third of the global market. Getting onto that list of suppliers is really tough, which is why small cells are of such interest to Cisco, which dominates in so many other areas of data networking.

Cisco has already invested in UK small-cell biz IP.Access, which boasted last month that its tech has been deployed in a million homes. Cisco's announcement of the Ubiquisys acquisition talks of "doubling down on its small cell business to accelerate strong momentum and growth in the mobility market", and taking advantage of the intelligence built into the Ubiquisys platform.

The network titan wants to muscle into the world of mobile infrastructure and buying Ubiquisys is another way of integrating phone network technology into an existing hardware portfolio - the idea being to turn cellular coverage into just another tick box on a product sheet. ®

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