P-Com to Buy Switching Company

Wireless telecom provider P-Com, Inc. Monday said it has signed a pact to purchase privately-held Procera Networks in an attempt to sell advanced switching products.

Campbell, Calif.-based P-Com said the stock-for-stock transaction is expected to close in the first quarter of 2003.

Sunnyvale, Calif.-based Procera Networks’ initial product, known as the MLS-XP, allows network administrators to control, monitor, and secure network traffic. But P-Com said it is more interested in Procera’s Layer 7 switching and content control technology. Usually P-Com’s broadband wireless access systems are designed for Internet service providers, competitive local exchange carriers (CLECs), cellular and personal communications service (PCS) providers and for governments. But with more than 150,000 installed systems, P-Com execs say Procera Networks will help it aggressively sell its products to OEMs and telecom operators.

P-Com also says the combination of the two companies will allow it to deliver broadband voice and data services directly to the user’s desktop for the first time.

“Procera Networks’ technology can be easily integrated into P-Com’s entire line of microwave radio products and can also be sold on a stand-alone basis,” said P-Com chairman George Roberts.. Procera Networks’ technology is also well-positioned to satisfy the growing need for enhanced network management as Voice over IP and video begin to reach critical mass.”

Better than the past, where P-Com said it and other microwave radio suppliers have handed off bandwidth management to specialized third party networking devices. Using Procera’s technology, P-Com said it could eliminate expensive add-on hardware and software.

The company says it is also encouraged by a January 2002 report by the research firm Dell’Oro Group that said that the global market for Layer 2-7 switching technology was $11.5 billion in 2001, but is estimated to grow to $18 billion by 2006.

However, the acquisition will put P-Com in the same categories as other switching manufacturers such as Cisco Systems and 3Com .