Alvarion(R) Signs Definitive Agreement to Acquire Wavion, a Leading Provider of Carrier-grade WiFi Solutions

Alvarion Ltd. ALVR -5.51% , a provider of optimized wireless broadband solutions addressing the connectivity, capacity and coverage challenges of public and private networks, today announced that it has signed a definitive agreement to acquire privately-held Wavion, an Israel-based technology leader in carrier-grade WiFi applications, for approximately $30 million in cash, including an assumed earn-out. Wavion's revenues for the last twelve months were approximately $16 million. Excluding non-recurring acquisition-related charges, Alvarion expects the acquisition to be accretive to non-GAAP earnings beginning in the second quarter of 2012. This acquisition marks another milestone in the execution of Alvarion's strategic plan aimed at shifting its primary focus from WiMAX-based RAN solutions to becoming a multi-technology wireless broadband solution powerhouse. Capacity and Coverage Challenges Multiplying Alvarion believes that the explosion of broadband data usage is creating an ever-growing set of coverage and capacity challenges that cannot be addressed effectively by any single technology. This is true for all types of wireless broadband networks from Tier 1 mobile carriers to wireless internet service providers, enterprises, governments and municipalities, and private network operators in various vertical markets. Alvarion's strategy is to leverage its years of experience providing carrier-grade solutions to create a unique combination of capabilities, employing multiple complementary technologies, which can be optimized for various types of networks and applications. The advanced WiFi technology provided by Wavion, including its leading edge beamforming capability, has reached a level of maturity and acceptance that makes it an attractive option for addressing the most demanding mission-critical applications. Alvarion intends to combine Wavion's best-of-breed WiFi platform with Alvarion's 4G RAN solution and recently-acquired DAS (distributed antenna systems) capabilities to create a full suite of capacity and coverage solutions that is not available from any other vendor. "Carrier WiFi is one of the fastest growing segments in the telecom equipment industry, and represents a significant new market opportunity for Alvarion," said Adlane Fellah, President, Maravedis. "This market is expected to grow at least 40% annually to about $500 million over the next several years. Alvarion's leadership and global presence in 4G solutions, augmented by Wavion's enhanced WiFi 2.4GHz and 5GHz technology, will allow network operators to address the increasingly complex requirements of wireless broadband networks." Wavion's Strengths Wavion's two-way spatially adaptive beamforming and Multiple Input Multiple Output (MIMO) technologies, based on the latest 802.11n standard, address the performance, penetration and profitability challenges of today's wireless broadband networks. Wavion's solutions ensure that carriers, service providers, governments and enterprises are able to deploy their wireless networks quickly and effectively, supporting applications such as: -- Seamless cellular offloading -- Business connectivity -- Residential access -- Digital cities -- Video surveillance -- Internet to schools and universities, hotels and resorts, malls and large venues Interference is one of the biggest challenges in deploying WiFi. Wavion's solution provides better coverage, higher capacity and interference immunity, using smart antenna, beamforming and SDMA technologies. "Wavion's field-proven solution is the ideal addition to our portfolio," said Eran Gorev, president and CEO of Alvarion. "Wavion's offering will enable us to leverage our global reach, extensive customer base, and network of go-to-market partners. This acquisition will also position the company in exciting new high-growth segments such as WiFi offload. "Wavion was the obvious choice for implementing the next step in our strategy because its team consists of experts in WiFi with decades of experience and the foresight to anticipate WiFi's emerging role in solving some of the most difficult network capacity and coverage issues. We understand carrier-grade requirements and Wavion's platform was designed from the ground up to provide the type of performance and reliability that is required for the most demanding applications for both public and private networks." "Wavion has a strong team of 75 people and a cutting-edge WiFi product portfolio which we believe will fit well with Alvarion's vision of multi-technology solutions," said Tal Meirzon, CEO of Wavion. "Being a high growth company in a high growth market, we believe we can be one of the growth engines of Alvarion. We look forward to serving customers and partners with a unique combination of expertise and complementary capabilities." Closing is expected before the end of 2011 and is subject to customary closing conditions. Alvarion will finance the acquisition with a $30 million 3-year credit facility from Silicon Valley Bank.

Tech-obsessed Koreans drive smartphone boom

Technology-obsessed South Koreans fell in love with the smartphone relatively late, but are making up for lost time at astonishing speed. The number of smartphone subscribers hit 20.1 million late last week in a country of just under 49 million people — compared to 10 million in March this year and fewer than 500,000 only two years ago. With free wireless networks and cutting-edge gadgets widely available, users will likely number 30 million in the first half of 2012 and 40 million at the end of next year, said Lee Sang-Hak, director of the Korea Communications Commission’s telecommunications policy planning division. “We’ll likely exceed the US in terms of the percentage of smartphone users in the total population early next year,” he told AFP. South Koreans got their first taste of Apple’s iPhone only in November 2009, a year or two after the United States and Europe, when regulators dropped restrictions which had largely closed off the local market. The iconic device became an instant hit, unnerving Korean cellphone giants like Samsung Electronics and LG Electronics which rushed to roll out competing models. Samsung, the world’s second-largest maker of all types of mobile phones after Nokia, unveiled its flagship Galaxy S smartphone series in June 2010. In the third quarter of this year it even overtook Apple in the global smartphone market, shipping almost 28 million units compared to 17 million by the US technology giant, according to research firm Strategy Analytics. Lee said Samsung’s success has helped fuel the local smartphone craze. “Having such a big player at home helps a lot, since Samsung can market, sell and distribute more easily and faster here than elsewhere,” he said. The country’s widespread broadband network also helped drive growth, he said, as existing networks can offer wi-fi services and let smartphone users access the Internet with no extra data charges. South Korea is one of the world’s most wired societies, with 95 percent of homes using broadband Internet. It also has the world’s top Internet download speeds, according to a study released by Pando Networks. SK Telecom, the country’s leading wireless operator, has invested a record 2.3 trillion won ($2 billion) this year to upgrade networks to handle growing data traffic caused by its own 10 million smartphone users. Another 6.8 million use KT, and 3.3 million subscribe to LG Uplus. “We didn’t expect that the number would rise at this speed… investment in network infrastructure is one of our top priorities now,” said an SK Telecom spokesman. Other wireless operators have also strengthened networks, and the capital city joined in as well. In June it pledged to spend $44 million to offer free wi-fi in 10,430 locations — parks, streets and most public places — by 2015. Kang Jeong-Soo, a researcher at the Yonsei Communications Institute in Seoul, said Koreans’ passion for gadgets means they waste no time trying out new technologies. “Average South Korean consumers replace mobile phones every nine months, compared to more than two years in countries like Germany or France,” he told AFP. Many South Korean mobile users are far more sensitive to trends than to prices and are hardly discouraged by higher prices of smartphones or costlier phone bills, he added. “No one here wants to be left out when a new big technology comes out… especially when everyone else is mingling on Twitter or Kakao Talk,” he said, referring to a local mobile messenger app which claims 25 million downloads.

Reforming the telcos

The day before All Saints’, a friend suffered a massive stroke and died at the wheel of his car inside a high-traffic mall in Quezon City. Maybe, just maybe, he could have been saved by faster medical attention and trained rescuers, instead of the mall security guards who eventually came to his aid. The victim was brought by the guards who found him slumped in the driver’s seat after his immobilized car had caused a traffic jam. They took him to a nearby but sadly ill-equipped hospital, where he was pronounced dead on arrival; he was all of 42. But apart from the grief and loss suffered by friends and family, there are other considerations that should make this untimely death worth noting. And if the people who make money hand over fist operating the various malls truly care for the customers whose money is their steady and lucrative lifeblood, they will listen and take measures to avoid such problems in the future. It is truly scandalous that the giant malls that litter our urban landscape and which attract hundreds of thousands of people every single day do not even have paramedics and ambulances. While every event that draws a significant number of people, like a concert of a basketball game, always has to prepare for such emergencies, the malls that are visited by even larger numbers cannot even employ people who can give critical care or even first aid. These malls hire armies of security guards and even bomb-sniffing canines to ensure the safety of their visitors. And yet they do not have even one EMS unit on standby, just in case someone needs emergency medical assistance like my late friend. Think about it: given the number of people who go to the malls, the possibility of such an emergency happening is certainly a lot higher than in some rock concert of sporting event. And the long minutes that could have been used giving immediate medical assistance to him (and which could have saved him) were spent instead finding ways to unravel a traffic jam and to get him to some hospital that did not even have basic equipment to revive a stroke victim. There ought to be a law, maybe. Or perhaps just some sympathy from the billionaire mall owners for the medical needs of their millions of visitors. * * * The recent order of the National Telecommunications Commission to slash by more than half the current texting or short messaging service (SMS) interconnection charge of 35 centavos to only 15 centavos per message is welcome news to millions of cellular phone users. The price drop will allow telcos to expand their “bucket” offers of unlimited texts and calls across-the-board, including subscribers of rival networks. This directive is actually part of a series of measures to prevent a monopoly or any other corporate maneuver that will be detrimental to the welfare of subscribers. This is an offshoot of NTC’s approval of the P69.2-billion merger of Philippine Long Distance Co., which owns the Smart network, and Digital Telecommunications Philippines Inc. (Digitel), which runs Sun Cellular. NTC Commissioner Gamaliel Cordoba explained that his agency was correct in not rushing a decision on the PLDT-Digitel merger. The exhaustive deliberations actually gave the NTC time to thresh out all contentious issues involving the PLDT-Digitel tie-up, in a bid to find a solution that would be acceptable to both the telecoms industry and its subscribers. One of the conditions set by NTC was for Digitel-Sun to continue providing nationwide “unlimited” call and text services and to keep its operations separate from PLDT. This should make millions of Sun subscribers happy. Sun’s “unli” call and text service was its strategy to capture a share of the telco market. Many speculated that Sun might have to terminate its affordable mobile phone services if the merger with PLDT pushed through. NTC’s new Memorandum Circular 02-10-2011 reducing interconnection charges for text messaging services between separate telcos by more than half will also further reduce fees charged by the different networks. Right now, telcos charge a rate of as low as 10 centavos for every SMS sent within a network. This fee goes up when a message is sent to a different telco because a separate fee is charged by the receiving company plus the interconnection fee of 35 centavos per SMS. The new lowered interconnection fee is expected by the NTC to lead to cheaper retail prices of SMS and make texting more accessible and affordable to all subscribers nationwide. The NTC memo will take effect 15 days after its publication. * * * NTC plans to lower interconnection fees for mobile and landline voice calls next – and soon. The networks can very well afford to reduce rates anyway, now that they have proved that they can all provide “unli” promos. Also, the new order directs all telcos offering SMS to ensure that they have sufficient facilities so that 99 percent of text messages sent to subscribers within their respective networks or to subscribers of their competitors are recieved within 30 seconds. Telcos that need to interconnect are required to provide the interconnection circuits or links necessary for them to handle their SMS traffic, and to have adequate termination equipment so they can immediately connect the interconnection circuits to their networks. On top of these consumer-friendly measures, NTC is also working on the rules on six-second pulse billing so subscribers making voice calls will eventually be billed based on actual usage instead of on the more costly per-minute basis. NTC is also currently completing the interconnection between PLDT and Globe Telecom landlines. Cordoba said interconnection issues in the provinces of Pampanga, Zamboanga and Bulacan have already been resolved, while those in six other provinces (Quezon, Laguna, Nueva Ecija, Benguet, La Union and Iloilo) are expected to be fixed by yearend. When NTC-directed interconnection is completed, subscribers would no longer be billed long-distance charges for province-wide calls between Globe and PLDT phones. NTC is also moving to ensure faster broadband connection for wired and wireless lines, by working on the promulgation of guidelines covering domestic Internet peering which will require Internet service providers to send and receive traffic without having to pass across national borders. This would also lead to lower broadband connection rates so a wider segment of the population, particularly residents in the countryside who have yet to discover the benefits of Internet usage, will go online. Starting December, the regulatory body will also put in place a quarterly monitoring system to check the quality of services offered by the telcos, to ensure that these comply with NTC standards. It will also enforce rules on the minimum speed of broadband connections, in response to numerous complaints slow Internet services.