The wireless and routing industries are in constant flux. I’ve written about mergers and acquisitions before, and there have been a few more in the last week.
AT&T buys Alltel and spectrum from Verizon
AT&T is shelling out nearly $2.7 billion to acquire more spectrum. Telecom Engine reports that AT&T alone made 50 spectrum deals in 2012 to increase its national spectrum holdings by a third. Following its failed $39 billion bid to acquire T-Mobile, AT&T has been looking to other sources to piece a national network of additional spectrum together. AT&T recently announced it will buy Alltel, which was spectrum-rich, primarily in remote locations, for nearly $800 million. AT&T is using the other $1.9 billion to buy spectrum from Verizon in several markets.
The other big news this last week was related to two firms in Cradlepoint’s marketspace that are selling off the consumer portions of their businesses.
Sierra divests AirCard business
Sierra Wireless is selling its AirCard business to Netgear. Sierra coined the term AirCard but decided it needs to focus on M2M embedded applications instead of the consumer USB and hotspot market. Netgear was a logical target since they are a well-known consumer router company. They report the trade is worth $138 million.
Cisco sells home networking business to Belkin
Cisco has been moving out of the consumer business for a couple years now. It purchased Linksys Group 10 years ago for half a billion dollars, and recently margins have been under pressure. As its most recent move to exit the consumer market, Cisco is selling its home networking business to Belkin. There’s not as much value to be added in the consumer space while the enterprise demands high-level functionality, security, and services. The enterprise market offers more room for high-level routing functionality and the customers that will demand it.
Cradlepoint has also been making a shift from basically starting the portable hotspot business for consumers to offering enterprise-class solutions for primary connection and failover in distributed enterprise and kiosk locations. Cradlepoint’s line of embedded ARC and COR routers with 3G/4G connectivity and enterprise-class routing and security features have become integral for many national corporations who demand uptime at branch offices, distributed locations, and retail kiosks.