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Cisco Quits WiMax Radio Business

The decision to cease making WiMax base stations gives a boost to Cisco's Long-Term Evolution portfolio.

WiMax is taking another hit as another major supplier -- Cisco -- confirmed that it is quitting the WiMax radio access network business and will cease making WiMax base stations. However, the networking company said it will continue supplying IP core and WiMax edge products like Wi-Fi and femtocells to WiMax customers.

The decision gives a boost to Cisco's Long-Term Evolution portfolio, which was strengthened in recent months by Cisco's acquisition of Starent Networks. Clearwire, which is majority owned by Sprint Nextel, has been the major deployer of WiMax in the United States.

Cisco got into the WiMax business through its acquisition of Navini Networks for $330 million in October 2007, but most carriers have since snubbed WiMax for the more efficient LTE. WiMax has been more popular in non-U.S. markets and its users, including Clearwire, have noted that it is relatively easy to shift network infrastructure -- and subscribers -- from WiMax to LTE.

Navini had a head start in WiMax and had supplied equipment to several startups scattered around the world. Its largest U.S. customer, Xanadoo, in Texas, said it had signed up more than 14,000 subscribers two years ago. Navini's use of MIMO antennas and Smart Beamforming technologies received high marks from many carriers. Navini's networks also were selling in countries with emerging business technologies.

When Cisco acquired Starent for $2.9 billion a few months ago, the acquisition also appeared to seal the doom of WiMax as a Cisco base station supplier. Starent was already gaining major contracts from LTE carriers like Verizon Wireless, which is scheduled to roll out the first U.S. LTE network later this year.

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