Cisco reported to be close to buying WiMAX vendor Navini

Cisco is reported to be on the verge of closing a deal to buy a WiMAX base station vendor called Navini Networks.

A news report at Unstrung.com cited two industry sources, one named, for the pending deal. The report quoted a venture capitalist as saying that Cisco would be willing to fork over between $200 million and $230 million for Navini, giving the network giant a foothold in the emerging global WiMAX wireless broadband market.

Earlier rumors had indicated Cisco’s interest in a flock of young WiMAX infrastructure vendors, which are wooing carriers worldwide in an effort to roll out fixed and mobile WiMAX nets. Late in September, rumors surfaced that Cisco was looking at Alvarion, Aperto Networks, and Redline Communications, as well as Navini, all with established products and a number of deployments.

Navini, based in Richardson, Texas, was founded by Silicon Valley entrepreneur Wu-Fu Chen and radio frequency expert Guanghan Xu. The company has reaped some $160 million in venture backing as it developed and brought to market its RipWave MX line of mobile WiMAX base stations, customer premises equipment, and adapters. A particular feature is the company’s patented beamforming technology that can shape and direct WiMAX radio waves, boosting range and performance.

In the United States, the two WiMAX carrier leaders are Sprint and Clearwire, which are investing billions in complementary nationwide deployments, using several WiMAX equipment suppliers. On the client side, Intel is readying a WiMAX chip set that eventually will be a standard embedded wireless interface in notebooks and other client devices.

“Cisco has been relatively mum regarding its plans in the WiMAX area and it seems as though there may, in fact, be two camps within Cisco,” says Chris Silva, WiMAX analyst for Forrester Research, Cambridge, Mass. “One [camp is ] pro-WiMAX and one a bit more skeptical on the technology’s validity as a consumer and business wireless broadband solution.”

If the Navini acquisition — or any WiMAX infrastructure vendor acquisition — takes place, it would be a solid addition to Cisco’s suite of wireless networking offerings,” Silva says. “Infrastructure vendors like Cisco would be smart to make acquisitions that broaden their ability to provide WiMAX connectivity infrastructure.”

In fact, Sprint executives have explicitly said the enterprise IT market is a key focus of its unfolding WiMAX service.

As expected, Cisco declined comment. “Cisco does not comment on rumors or speculation in the marketplace,” said a company spokesman via e-mail.

Cisco has taken a public position on WiMAX, on the technology generally, and on how it relates to moble operators.

If Silva is right, the internal debate may be over whether WiMAX could drive a billion dollars in new revenue. That was the thinking behind Cisco’s acquisition of Aironet, a maker of Wi-Fi radio chip sets, and later of Airespace, one of the pioneers of the wireless LAN controllers and their companion thin access points.

The timing of the Airespace acquisition, and the subsequent purchase of Linksys, which sells Wi-Fi gear into residential and SOHO markets, has given Cisco the lion’s share of both the enterprise and consumer Wi-Fi markets. And Cisco has maintained that dominant share quarter after quarter in a fast-growing market. WiMAX offers the chance for a repeat performance, especially in Asia, South America, and Africa. These are areas where WiMAX operators are hoping to use wireless broadband to introduce voice and data network infrastructures where copper and fiber are prohibitively expensive.

As the Cisco’s Wi-Fi move shows, the wireline vendor is increasingly seeing wireless of all kinds as a key area of growth. In 2005, Cisco launched the Application Oriented Network initiative, introducing support for RFID traffic over the net infrastructure. A WiMAX buy would be a logical step in a Cisco plan to the infrastructure leader in broadband wireless as much as broadband wired nets.

Network World is an InfoWorld affiliate.