Mavenir buys ip.access to boost Open RAN, enterprise portfolio

• Mavenir is buying small cell specialist ip.access
• Acquisition will add 2G/3G capabilities to Mavenir’s Open RAN portfolio
• Deal will also improve Mavenir’s enterprise offering

Sensing a growing opportunity for its software-centric, disaggregated network technology, Mavenir has announced the acquisition of small cell specialist ip.access for an undisclosed sum.

The move, according to Mavenir, will strengthen its portfolio for companies seeking to build cellular networks using Open RAN technology, a disaggregated, open interface-based alternative to traditional cellular access networking options. 

And in its Open RAN offer for mobile operators, the move adds crucial support for 2G and 3G: Up to now Mavenir has focused on developing its own 4G/5G Open RAN capabilities, but as interest in Open RAN options grows amongst existing mobile operators that want to diversify their supply chains, being able to support the legacy cellular ‘generations’ that will be important to mobile operators for years to come will likely be an important criterion in Open RAN supplier decisions. Adding such support will also put it on a par with one of its key Open RAN rivals, Parallel Wireless, which has long pitched a multi-generation solution. 

The ip.access acquisition, which has already closed, will add about 115 people to Mavenir’s payroll (the company already has more than 4,000 staff). The parties are not disclosing ip.access’s financials, but say the small cell vendor is profitable on the EBITDA (earnings before tax, depreciation and amortization) line. The deal adds more than 50 operator customers (plus hundreds of enterprise users) to Mavenir’s 250+ existing telco customer list: There is overlap, but according to the companies the relationships are mostly with different teams within those customers, so there will be cross-sell opportunities.

From a technology strategy perspective, ip.access is a good fit. “One of the things we found most attractive about ip.access was the software centricity of the portfolio approach. They've driven a lot of innovation, even in the hardware-oriented small cell industry, on the software stack and that's something that aligned with our DNA,” stated Aniruddho Basu, SVP and General Manager of Mavenir’s Emerging Business unit.

It also has experience in the Open RAN market in partnership with Mavenir. CEO Richard Staveley says ip.access has been “working with Mavenir for about a year on a strategic project… with Vodafone. As many of these relationships do, it started with a strategic project, and we have done some fairly groundbreaking stuff,” noted the CEO. 

But that doesn’t mean ip.access is just going to be swallowed into Mavenir’s Open RAN portfolio: The intention is to maintain ip.access as a standalone unit within Mavenir’s Emerging Business group and retain the name – ip.access is one of the better-known brands in the small cell world and already has business relationships with more than 50 network operator customers, including the likes of Globe and Smart in the Philippines, so it makes sense to retain the identity.

And it makes particular sense as ip.access in now Mavenir’s route into expanding areas of its business, particularly in enterprise verticals, in private networks and in certain geographies.

In the enterprise networking sector, ip.access is already very active in markets such as the aviation and maritime and has also been developing its portfolio for the private networks segment, in particular for companies with CBRS spectrum in the US market.

We looked at the references ip.access had and that fitted very well with our enterprise ambitions. They've got a fairly strong CBRS portfolio and that is an imminent business opportunity in the large and vibrant North American market,” stated Basu. 

“We have had a fairly clear strategy of looking at extending our presence into the enterprise and industry segments. We feel that private networks as well as campus networks, and different kinds of enterprise deployments in the industry and enterprise sector, are going to be a fairly large and interesting business opportunity and  ip.access historically has had extremely good deployments, and has a great number of references in the enterprise space,” continued Basu. “We have been focusing a lot on developing our enterprise portfolio and the complementary assets that ip.access brings to the table, plus the references they have in in the government sector and private enterprise, in industries [such as] airlines and maritime… that will give us a very strong beachhead to expand our propositions into those areas and grow our business,” added the Mavenir man. 

The move also gives Mavenir a presence in Africa, where ip.access has been working with Africa Mobile Networks (AMN), a wholesale operator backed by Facebook and Intelsat, that is hooking up with multiple major operators (including Orange and MTN) in a number of markets across the continent. (See this announcement for more details.)

“This looks a good company for Mavenir to acquire for the reasons stated in its press release – to bring 2G/3G capabilities and a small cell portfolio,” stated Heavy Reading Principal Analyst Gabriel Brown, an expert in the mobile networking sector. “And although it’s a small company, ip.access has deep experience of how to integrate small cells in operator networks as an alternative vendor. That will be worth a lot to Mavenir as it seeks to establish a broader portfolio and grow its RAN business.”

But Brown added a note of caution: “You wonder a bit about culture. One reason ip.access is still a relatively small company, and is the one being acquired, is because it takes a sure but steady approach to new products and markets, and it tries to live within its means. Mavenir's culture is more fast-moving, more risk-taking and more 'gung ho.' Mavenir’s investors are making a bit bigger bet and I suspect they see this acquisition as a ‘bolt on’ on the way to greater things,” added Brown.

The acquisition appears to make sense in a number of different ways for Mavenir, which has ambitions to grow from its current circa $600 million-per-year turnover to become a $1 billion annual sales company within a few years. M&A deals such as this, if executed successfully, could help accelerate Mavenir’s revenue growth, expand its customer base and expand its geographic reach.

And, of course, that in turn could make this privately-held company an even more attractive target for a takeover if the Open RAN market grows to be worth billions of dollars per year as some research houses believe.

- Ray Le Maistre, Editorial Director, TelecomTV