February 22, 2012

Hetnet Boost Part Of Ericsson’s BelAir Strategy

Ericsson plans to acquire 100 percent of the shares of privately held Canadian indoor/outdoor Wi-Fi company BelAir Networks. In return, the Swedish giant says it gets “a strong carrier grade Wi-Fi portfolio, technological expertise, IPR, and established customer contracts and relationships.

The terms of the deal, which is set to close sometime during the next few months, were not disclosed.

According to Ericsson CEO Hans Vestberg, "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.”

Following Ericsson’s announcement, ABI Research sent out its own analyst commentary, citing recent growing interest among mobile operators to use Wi-Fi to offload some of their burgeoning data traffic.

“AT&T reported 1.2 billion Wi-Fi connections on AT&T hotspots during 2011, a tripling of connections from 2010. Most of this has been driven by the rise of smartphones, tablets, netbooks and laptops, all of which are becoming a part of mobile lifestyles,” the firm wrote. “With Wi-Fi conveniently available indoors and outdoors and its ubiquity in the office and home environments, Wi-Fi should become an integral part of mobile networks going forward.”

It continued, “Ericsson’s acquisition of BelAir signals a tectonic shift in the carrier Wi-Fi ecosystem, with Wi-Fi now considered a mainstream technology along with traditional cellular technologies like GSM, CDMA, UMTS, HSPA and LTE. Ericsson’s massive influence with mobile operators worldwide should signal a wider acceptance of Wi-Fi within mobile networks. Ericsson’s closest rivals, including Nokia Siemens, Huawei, and Alcatel-Lucent, have all announced carrier Wi-Fi-related solutions, but none on the scale of acquiring a leading carrier Wi-Fi vendor.”

In conclusion, it posed the following questions, “With BelAir now getting absorbed into the Ericsson radio portfolio, how does this impact Cisco and Ruckus, who are known to be key competitors of BelAir? What does this mean for Ericsson’s rivals including Alcatel-Lucent, Nokia Siemens Networks and Huawei in terms of their competitiveness around carrier Wi-Fi? Does Ericsson’s acquisition of BelAir give an impetus to Wi-Fi over small cells?”