There’s no doubt that WiFi is the future of mobile Internet connectivity. Last year, a report published by market research company Informa Telecoms and Media indicated that the number of public Wi-Fi hotspots is expected to increase by 350 percent in the next four years. The report also stated that wireless carriers all around the globe will increasingly use WiFi as a means to offload traffic from their mobile networks.
Therefore, it’s no surprise that major telecom vendors are working aggressively to grab a lion’s share of the global Wi-Fi pie. To that effect, Alcatel-Lucent last week announced that it’s integrating Wi-Fi into mobile network equipment it builds for carriers with its lightRadio architecture, allowing users to move seamlessly between the two networks and authenticate using the SIM card.
Not to be left behind, arch rival Ericsson has responded by scooping up Canada’s BelAir Networks Inc., in a deal that will bolster the Swedish network group’s WiFi portfolio. While some believe it’s a direct response to Alcatel-Lucent’s recent move, others claim it was always a question of ‘when’ rather than’if’.
Ericsson expects to close the acquisition by March, subject to customary conditions. BelAir, founded by Bernard Herscovich and Stephen Rayment in 2001, produces indoor and outdoor WiFi systems for telecoms operators that allow people to surf the Internet without a physical coupling to a network. The company is headquartered in Kanata, Ontario and it has around 120 employees, which will now be a part of Ericsson’s global workforce.
BelAir’s clientele include big names such as AT&T and Comcast. Ericsson and BelAir have been collaborating for years on the Comcast deployment. The company’s investors include VenGrowth Capital Partners, Panorama Capital, Comcast Ventures, T-Mobile Venture Fund, Ventures West Management, Trilogy Equity Partners, BDC Venture Capital, MMV Financial, McLean Watson Capital and EDC.
“Ericsson will lead the way in the growing converged Wi-Fi and cellular market where improved end-user experience is the driving force. By integrating BelAir Networks’ market-leading products and competence into Ericsson’s existing radio portfolio, we will be able to do this more quickly. We welcome 120 highly skilled people into the company,” Ericsson chief executive Hans Vestberg said in a press release.
BelAir founder Herscovich believes the deal is a win-win proposition for both companies as BelAir is the number 1 player in the Wi-Fi segment and Ericsson is No. 1 in cellular domain. Experts believe the Ericsson acquisition of BelAir would further propel M&A activity among other telecom manufacturers.
The financial terms of the deal weren’t disclosed.