Officials at Alvarion, a Tel Aviv-based broadband wireless manufacturer,
announced its decision to acquire 3G equipment maker Interwave for $56
million Wednesday.
The all-cash merger, in which Interwave will become a wholly-owned
subsidiary, is subject to shareholder approval. According to Carlton
O’Neal, Alvarion vice president of marketing, shareholders will meet sometime next
month, and he expects the deal to close by the end of the third quarter of 2004.
Erwin Leichtle, Interwave CEO,
will become Alvarion’s mobility chief when the acquisition is complete.
The acquisition adds a new area of growth for Alvarion, known for its
license and license-free spectrum equipment for enterprise networks, ISPs
and telecoms.
Interwave manufactures the infrastructure equipment used by wireless phone
carriers to deliver 3G
Network-In-A-Box, which is a mobile switching center, base station
controller and base transceiver station.
The company’s products take
advantage of the two dominant wireless standards — CDMA
GSM
a year after signing an all-encompassing licensing
agreement with Qualcomm, owner of the CDMA technology.
The company’s product lineup of GSM, used by more than half of the 3G
networks in the world, and CDMA, used primarily in the United States, made it an
attractive acquisition for Alvarion, which sells its equipment to 130
countries.
According to O’Neal, Interwave has been experiencing better growth,
percentage-wise, than Alvarion, which makes it even more attractive, as does
the expertise the company brings.
Providing 3G equipment is only part of the strategy behind Wednesday’s
announcement. Interwave’s assimilation is part of Alvarion’s goal to boost
WiMAX, a technology that’s more hype than substance at the moment.
WiMAX is the next generation of broadband wireless access (BWA),
officially called 802.16 and sometimes referred to as “Wi-Fi” on steroids. It
is potentially capable of delivering T-1 data transfer rates as far as 30 miles
away and connecting 802.11x hotspots into one encompassing metropolitan area
network.
3G wireless phone mobility will play an important part in WiMAX’s
development and deployment in coming years, O’Neal said, and Alvarion wants
to be at the forefront of development when that time comes.
“The strategy of the company is to lead the entire industry with full-scale
interoperability with WiMAX, and one element of that is to be mobile,” he
said.
The development of WiMAX is similar to the cellular telephone spread of the
1980s and 1990s, when small carriers slowly morphed into nationwide
providers. At a Wireless Communications Association meeting last month, one
cell phone company executive said the BWA movement is at the cell phone’s
1985 stage of deployment and predicts
mass market adoption as far as a decade away.
Zvi Slonimsky, Alvarion CEO, said in a statement that the merger with Interwave will accelerate
their efforts in 802.16 growth.
“We are well-positioned to continue leading this last-mile revolution as
WiMAX moves from fixed-only solutions to include both fixed and mobile
capabilities.”
