Nokia boosts US presence with SAC purchase July 03 2014

Finnish firm's second infrastructure acquisition with Microsoft cash focuses on indoor small cell and DAS deployments

By Caroline Gabriel

Nokia, in its new handset-free life, is building up its largest business, in wireless infrastructure, and has taken over indoor coverage specialists SAC Wireless. Testing firm Spirent has further deepened its focus on VoLTE with the purchase of the voice-oriented testing unit of Radvision. And antenna giant CommScope has shelled out for two businesses of UK-based Alifabs to enhance its metrocells offering.

Nokia expects to close its SAC Wireless deal in the third quarter, though the price was not disclosed. By strengthening its hand in the indoor market it hopes to improve its position in the US, where it has fared poorly in the first wave of major LTE deals, compared to Ericsson and Alcatel-Lucent.

However, as north American operators start to complete their initial, coverage-oriented LTE build-outs, their second investment phase will focus heavily on adding capacity, often via a small cell layer, and on improving indoor coverage. By acquiring SAC, Nokia gains an immediate entry point, since the firm claims all the major US cellcos as customers for its services. These include the design, installation and maintenance of DAS (distributed antenna system) networks for enterprises, venues and government bodies, though it will also extend Nokia's small cells proposition.

Indoor coverage is a critical business issue, as the increase in mobile data usage inside buildings is faster than that outdoors, and mobile-first patterns mean enterprises need fully reliable voice coverage too. Those challenges have led all the big OEMs to expand their indoor offerings, both in terms of products and services - as seen in Ericsson's twin announcements of its Radio Dot distributed radio system, and an 'as a service' proposition for indoor deployments.

In many ways, the services element - particularly site acquisition and backhaul provisioning - is a greater source of competitive advantage than the cells and antennas themselves. SAC, for instance, claims to bring Nokia particular expertise in site development; and in 'self-perform' implementations of indoor and outdoor small cells and DAS.

Some expected Nokia to use its cash windfall, from the sale of its devices division to Microsoft, to make a huge purchase, such as Alcatel-Lucent. So far, it has stuck to buying smaller companies which fill gaps in its core platform, rather than extending its portfolio significantly - in line with last year's restructuring to become a firm entirely focused on mobile broadband. Recently, Nokia also acquired Mesaplexx to strengthen its small cell technology.

Ricky Corker, EVP north America for Nokia, said in a statement: "With SAC Wireless' capabilities complementing our own inhouse expertise, we are well positioned to bring enhanced quality and increased end-to-end delivery efficiency to our customers. No other infrastructure provider is offering this level of proven services."