The $2.9 billion deal calls for the Starent operation, which provides multimedia core platforms for mobile carriers, to be merged into Cisco's Service Provider Business. Ashraf Dahod, Starent's chief executive officer, will head up a new Cisco Mobile Internet Technology Group within the Cisco unit.
Starent, which has several major contracts from carriers developing emerging wireless mobile networks, has been providing cutting edge platforms for the carriers as they shift from 2.5G and 3G network technologies to 4G networks. For instance, Starent has landed major contracts to assist in the development of Verizon Wireless' planned shift to Long-Term Evolution (LTE) in the U.S. while Starent has also won a WiMax contract in Taiwan.
Starent delivers networking solutions ranging from multimedia intelligence, and core network functions to mobile infrastructures involving CDMA2000, UMTS/HSPA and WiMax networks. Starent had revenue of about $254 million in 2008.
Cisco's acquisition of Starent has been in sharp contrast to its recent acquisition of Tandberg, a videoconferencing provider. The Tandberg deal was marked by several weeks of bickering over an acquisition price as Tandberg shareholders squeezed another $350 million or so from Cisco to nail down a final price of about $3.4 billion.
In describing the benefits of the acquisition, Dahod has said: "Combining Cisco's strength in video and IP with Starent Neteworks' leading mobile infrastructure solutions creates a compelling portfolio of products that provides an integrated architecture to offer rich, quality multimedia experiences to mobile subscribers on 3G and 4G networks."