Ericsson Sharpens WiFi Focus With BelAir Buy

STOCKHOLM—Telefon AB L.M. Ericsson Tuesday said it agreed to buy Canada’s BelAir Networks Inc., in a deal that will bolster the Swedish network group’s WiFi portfolio.

Ericsson’s newly appointed chief technology officer, Ulf Ewaldsson, told Dow Jones Newswires that through the acquisition Ericsson aims to provide WiFi data connectivity through radio networks to supplement its third- and fourth-generation mobile data networks.

The financial terms of the acquisition weren’t disclosed.

The deal comes at a time when WiFi has become increasingly important as mobile operators look to increase data network capacity and offload mobile data traffic, said industry analyst Leif-Olof Wallin at research firm Gartner Inc.

“We estimate that 90% of operators in North America and Western Europe will have run out of bandwidth on the 3G spectrum by 2013,” Mr. Wallin said. “Offloading traffic from the expensive 3G spectrum to WiFi is one of the ways for operators to counter this development.”

The problem with crowded data networks is especially apparent in crowded urban areas, where operators have already been deploying many mobile data cell sites.

“Eventually, the radius of the cells in urban areas will become so small that it isn’t economically justifiable to add more cells to increase capacity. Then it’s better to offload traffic to WiFi,” Mr. Wallin said.

As a measure of mobile operators’ WiFI expansion, Telefonica SA’s O2 subsidiary in the U.K. aims to have 14,000 WiFi hotspots across the country by 2013, while TeliaSonera AB in Sweden has 4,000 WiFi hotspots.

“The WiFi experience offered to consumers has to become more integrated. Today one has to connect manually to WiFi networks, but our ambition is to offer WiFi connectivity seamlessly through the radio network,” Ericsson’s Mr. Ewaldsson said.

Ottawa-based BelAir Networks, a company with 120 employees, offers carrier-grade WiFi technology to North American operators such as AT&T Inc. and Comcast Corp.

“Given that we have a global sales channel, we don’t envisage the need to make any similar acquisitions in other regions, and instead intend to globalize the BelAir technology offering,” Mr. Ewaldsson said.

(The Wall Street Journal, FEBRUARY 21, 2012)