Wednesday, October 21, 2009

Tellabs Acquires WiChorus for $165 Million for Packet Core

Tellabs agreed to acquire WiChorus, a start-up offering a mobile packet core platform for $165 million in net cash. The transaction is expected to be dilutive to Tellabs' earnings in 2010, then additive to Tellabs' non-GAAP earnings in 2011 and beyond.

WiChorus' platform, which has been selected by Clearwire for deployment in its WiMAX network, provides subscriber management on a per application, per subscriber, per flow basis at line rate. WiChorus also provides advanced charging features, enables operators to adopt new business models that leverage Internet-based services. These include content-based charging, mobile advertising and revenue-sharing partnerships. In addition, the advanced stateful Layer 7 capabilities are coupled with SmartCore's knowledge of the wireless topology to allow operators to ensure fairness in network bandwidth consumption, and optimize scarce spectral and backhaul resources.

The WiChorus HSPA GGSN is currently in trials with mobile operators.

In addition, WiChorus said its "SmartCore" mobile packet core platform 8 times more throughput, 4 times more simultaneous Internet connections and active users, compared with competitive platforms in gateway applications.It can be used to deliver new and differentiated applications such as Internet offload and as a distributed LTE gateway. WiChorus calculates that its SmartCore platform can offload as much as 70% of traffic at the network edge, increasing core network efficiency and improving user experiences.

"As we expand logically into an adjacent market with the SmartCore platform, Tellabs and WiChorus can help mobile customers succeed by revolutionizing the mobile Internet," said Robert W. Pullen, chief executive officer (CEO) and president of Tellabs. "Our customers are excited about this combination, since they can deliver rich, distinctive personalized user experiences such as mobile Internet, video and commerce. This move complements, differentiates and advances our growth solutions portfolio including Tellabs Mobile, Optical and Business Solutions."

WiChorus is based in San Jose, California. On completion of the transaction, Rehan Jalil will head a newly formed Tellabs IP and mobile Internet group, as senior vice president, reporting to Pullen.

The combined Tellabs + WiChorus company will employ about 3,250 people.

Investors in WiChorus include Accel Partners, Mayfield Fund, Redpoint Ventures and Pinnacle Ventures.

  • In November 2008, WiChorus secured $18 million in series C funding for its scalable platforms for Smart 4G Networks. Pinnacle Ventures led the oversubscribed up-round, which included existing investors Redpoint Ventures, Mayfield Fund and Accel Partners. This brought total funding in the company to $43 million.

  • WiChorus was founded by Rehan Jalil, who previously served as chief architect of WiMAX for Aperto Networks.