Wireless network equipment maker Tellabs said that it will acquire wireless infrastructure gear manufacturer WiChorus for $165m to enhance its network architectures to deliver 3G and 4G services and gain from increasing sale of smartphones.
The company said that the combination would create advanced 3G/4G mobile networks that will deliver new applications to generate revenue and simplify networks to achieve savings for mobile carriers.
The acquisition adds WiChorus’ SmartCore mobile packet core platform, which is purpose-built for 4G, LTE and WiMax, with support for 3G. It includes mobile IP products for applications including GGSN, LTE and WiMax, plus new application enablement with DPI capability.
Tellabs said that the SmartCore mobile packet core platform can offload as much as 70% of traffic at the network edge and customers can save up to 50% in capital expenses, compared with the present method of operation.
The transaction is expected to be dilutive to Tellabs’ earnings in 2010, then additive to non-GAAP earnings in 2011 and beyond. Non-GAAP earnings exclude amortisation associated with acquired intangibles and other purchase accounting adjustments.
Robert Pullen, chief executive officer and president of Tellabs, said: “As we expand logically into an adjacent market with the SmartCore platform, Tellabs and WiChorus can help mobile customers succeed by revolutionising the mobile internet.
“Our customers are excited about this combination, since they can deliver rich, distinctive personalised user experiences such as mobile internet, video and commerce. This move complements, differentiates and advances our growth solutions portfolio including Tellabs Mobile, Optical and Business Solutions.”
On completion of the transaction, Rehan Jalil, president and CEO of WiChorus, will head a newly formed Tellabs IP and mobile internet group, as senior vice president, reporting to Mr Pullen. The transaction is subject to customary closing conditions and regulatory reviews. It is expected to close within the next several months.
Prior to close, Tellabs and WiChorus will continue to operate as separate companies. The combined company is expected to employ about 3,250 people.
