Cisco To Buy Navini for $330 Million

Cisco Systems Inc. is snapping up privately held Navini Networks Inc. for $330 million, extending the networking equipment maker's acquisition streak and providing the latest validation for the new wireless network technology called WiMax.

Cisco, the world's largest maker of routers and switches to direct traffic over the Internet, said Tuesday that Navini's technology will help it build high-speed Internet networks deep in emerging markets where traditional Internet infrastructure doesn't exist or is spotty.

Unlike Wi-Fi networks, which are found in homes and cafes and typically have a range of just a few hundred yards, WiMax networks can extend for miles and blanket entire cities with broadband connectivity.

WiMax -- short for Worldwide Interoperability for Microwave Access -- can deliver wireless broadband at speeds of 70 megabits per second across a distance up to 40 miles.

The longer the distance the slower the connection speed. But WiMax's top speed is more than 30 times that of many Wi-Fi and fixed-line broadband connections.

Richardson, Texas-based Navini makes base stations, modems and antennas for beaming and receiving radio signals using WiMax technology.

Larry Lang, vice president and general manager of Cisco's Mobile Wireless Group, said Navini's products will complement the Wi-Fi wireless technology already embedded in Cisco's products.

"In the U.S., there are a number of choices, and it's nice to have WiMax as another choice," he said. "But there are some places in the emerging markets where it would have been WiMax or nothing."

The acquisition will cost San Jose-based Cisco $330 million in cash and assumed options, but that won't make much of a dent in Cisco's cash hoard, which stood at $22.3 billion at the end of the last fiscal year.

When the deal closes in the second quarter, which ends in January, Navini will be Cisco's 124th acquisition. Navini has 260 employees, most of whom Cisco plans to retain.

WiMax's popularity is growing as Internet service providers look for ways to connect more people, particularly in developing countries.

Last week, the U.N. telecommunications agency, the International Telecommunication Union, added WiMax to a global standard for mobile devices, signaling that airwaves designated for technologies in the standard known as IMT-2000 can now be used for networks based on WiMax.

The announcement was a big victory for early promoters of WiMax worldwide, including Intel Corp., Samsung Electronics Co., Motorola Inc. and Nokia Corp.

In the U.S., wireless provider Sprint Nextel Corp. is rolling out a massive nationwide WiMax network with financial help from competing provider Clearwire Corp.

Sprint Nextel plans to spend $5 billion on the network and serve 125 million people with it by 2010.

Cisco shares rose 17 cents to close at $31.54 Tuesday.


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