October 14, 2009, 12:00 AM

Big on the mobile web, Cisco agrees to pay $2.9 billion for Starent

Noting that the mobile web is at an inflection point of rapid growth, Internet gear provider Cisco Systems said this week it will pay $2.9 billion in cash for Starent Networks, a supplier of IP-based technology for mobile service providers.

Katie Evans

Managing Editor, International Research

Noting that the mobile web is at an inflection point amid rapid consumer acceptance of web-enabled smartphones, Internet gear provider Cisco Systems Inc. said this week it will pay about $2.9 billion in cash for Starent Networks, a supplier of IP-based technology for mobile carriers.

"Cisco and Starent Networks share a common vision and bring complementary technologies designed to accelerate the transition to the mobile Internet, where the network is the platform for service providers to launch, deliver and monetize the next generation of mobile multimedia applications and services," says Pankaj Patel, senior vice president and general manager of Cisco’s Service Provider Business.

Starent president and CEO Ashraf Dahod, who will join Cisco as head of a new mobile technology unit and report to Patel, adds that the two companies will work to enhance the capability of mobile phones to carry a higher level of video and multimedia content-a move that would support the growth of retail merchandising and marketing displays in mobile commerce. "Combining Cisco`s strength in video and IP with Starent Networks` leading mobile infrastructure solutions creates a compelling portfolio of products that provides an integrated architecture to offer rich, quality multimedia experiences to mobile subscribers on 3G and 4G networks," Dahod says. 3G and 4G refer to high-speed mobile networks.

The acquisition, which has been approved by each company’s board of directors, is expected to close in the first half of next year. Cisco has agreed to pay $35 in cash per share of Starent Networks.

"We are very pleased that Starent Networks will be joining the Cisco team, and we believe their products and engineering talent will greatly benefit our service provider customers as they build out their mobile Internet offerings," says Cisco CEO John Chambers.


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