You can tell it’s December by the last-minute shopping frenzy online and at the malls. But consumers aren’t the only ones lining up at the register. Plenty of mobile and wireless companies, apparently imbued with holiday spirit, have gone on a year-end shopping spree. Here’s a look at a few of the deals, large and small, that have gone down during this Yuletide season.
Verizon Communications has been among the most active buyers out there, swiping its credit card with abandon. After acquiring assets from UpLynk in mid-November, the telecom giant went on to sign an agreement to acquire EdgeCast, one of the industry’s biggest content delivery networks and a member of the Deloitte Technology Fast 50 list. Reportedly valued at $350 million, that deal is set to close early next year.
And while Verizon appears to be more interested in acquiring than unloading, the company is reportedly mulling over the sale of its lower 700 MHz A-Block spectrum to T-Mobile US. Verizon executives haven’t made any secret about being open to selling the A Block, which it purchased for $2.4 billion. Interested buyers would likely have to cough up at least that much to get Verizon’s attention. As an apparent precursor to such a deal, on December 18, Verizon Wireless agreed to swap PCS and AWS spectrum with T-Mobile US. Meanwhile T-Mobile US is the subject of rumor mergers involving Sprint.
Verizon isn’t the only one with acquisition fever. In early December, Openwave Messaging, a provider of white-label messaging systems, purchased Critical Path for an undisclosed amount. Founded in 1997, Critical Path delivers messaging, security and unified communications to service providers and enterprises. Once the deal is done, the combined company will have a hefty chunk – about 35% – of the service provider messaging market and an installed base of 400 million digital mailboxes worldwide.
Then, in mid-December, word got out that Intel’s not-yet-launched online television venture was up for grabs, and Verizon, along with Samsung, was among the interested buyers. Although higher-ups at Verizon would neither confirm nor deny the rumor, sources indicated that a deal between the chipmaker and the ever-expanding telecom provider could potentially be valued at $200 million, less than half of Intel’s reported price tag of $500 million. That said, this acquisition could beef up Verizon’s video offerings and expand its Internet subscriber list.
Equally interesting was AT&T’s sale of its Connecticut wireline network to Frontier Communications. Not only does the deal confirm AT&T’s intention to eventually divest itself of wireline business, it also underscores the company’s goal of focusing on its wireless business. The $2 billion price tag means more money for Project Velocity IP, AT&T’s $14 billion plan to eventually migrate about 99% of its network to a wireless, cloud-based network.
Chip deals
Intel announced plans to buy Mindspeed’s wireless infrastructure division for an as-yet undisclosed amount. The sale didn’t come out of left field, as Light Reading had reported in November that Intel possibly had an inside track on the purchase. The chipmaker is eager to cement its presence in centralized mobile processing technology – and, according to company sources, shore things up even more for the inevitable convergence of telecom and enterprise IT infrastructure. The new assets will bring a few key things to the table that Intel has been hungry for, including technology for signal processing and intellectual property for telecommunications base stations.
Avago Technologies is buying LSI Corporation for $6.6 billion. The deal is financed in part by Silver Lake, the private equity firm that owned part of Avago before its 2009 IPO. Avago makes RF components for mobile phones, and while demand for those chipsets is growing quickly, competition is heating up as well. Qualcomm entered the space this year with its own RF front-end solution.
Telecom software deals
Also in early December, Akamai made a deal to buy Florida-based Prolexic Technologies for $370 million. A big player in the security and CDN arenas, Akamai has been exploring the possibility of expanding further into related Cloud-based services. Prolexic, which offers cloud-based DDoS protection for data centers and enterprise IP applications, fits like a glove with Akamai’s new objectives. The sale is expected to close sometime in the first half of 2014.
And while Akamai was busy doing deals, business support solutions and services company CSG International bought some of Volubill’s key assets. Neither the assets nor the price tag were specified, but Volubill, which offers policy and charging solutions to telecom service providers, is reportedly ripe for acquisition. Although it counts more than 70 operators around the world, including France Telecom/Orange, on its customer list, Volubill’s problems are with scalability, not technology. According to industry experts, the marriage is good for both companies, and Volubill’s assets will find a happy home among CSG’s front-office solutions. Whether Volubill will continue to hold together remains to be seen. The rumor mill has been grinding away since November, with speculation that the company may sell itself to the highest bidder.
On the heels of the CSG-Volubill news, Dailymotion announced that it was purchasing Swiss start-up Jilion, developer of HTML5 video technology, SublimeVideo. Palo Alto, Calif.-based Dailymotion boasts a video-sharing site with nearly 120 million unique monthly visitors and 2.5 billion videos views worldwide. The company noted that the acquisition – and accompanying talent – will help grow Dailymotion’s presence in the video market across multiple platforms, including mobile, tablets and desktop, something the company has been looking to do.
International deals
By mid-December, the auction block was busier than ever. Telecom New Zealand sold AAPT to Australian company TPG Telecom for $450 million. That’s considerably less than the $2 billion Telecom New Zealand paid for the company back in 1999 during the go-go days of the “dot-com” boom. TPG owns fiber in three of Australia’s four biggest cities, but the acquisition should boost the company’s infrastructure – AAPT has 11,000 kilometers of intercity fiber connecting nearly 1,500 on-net buildings throughout Australia.
