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Deutsche Telekom Invests in DSL Chipmaker

Michelle Donegan
News Analysis
Michelle Donegan
3/1/2010
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Deutsche Telekom AG (NYSE: DT) showed some love today for the former wireline communications business unit of Infineon Technologies AG (NYSE/Frankfurt: IFX) -- now known as Lantiq Semiconductor -- by announcing a strategic investment in the DSL chipset vendor. (See T-Venture Invests in Lantiq.)

The move is the latest by Deutsche Telekom to take a strategic interest in companies that enable fixed and wireless broadband access and networking at home. The carrier's investment arm, T-Venture , made the investment in Lantiq for an undisclosed sum. Other similar investments made by the carrier's T-Mobile Venture Fund , which is managed by T-Venture, are femtocell firm Ubiquisys Ltd. , femto chipmaker Percello Ltd. , and fixed/mobile specialist Kineto Wireless Inc. , just to name a few. (See T-Mobile Joins Google, T-Mobile Invests in Femto Firm, and T-Mobile Backs Femto Chip Startup.)

Today's news marks Deutsche Telekom's first investment in Lantiq, but the carrier already uses the vendor's chipsets in DSL equipment in central offices as well as in customer premises equipment. "It's a very mature customer relationship," says a Lantiq spokesman.

Lantiq came into existence in October 2009 after Infineon sold its wireline business to an affiliate of private equity firm Golden Gate Capital for €243 million (US$328 million). (See Infineon Slims Down, Infineon Sells Its Wireline Business, Infineon Meshes DSL, IPTV, and Infineon DSL: Past & Future.)

And Lantiq has hit the ground running. Since becoming a standalone company, Lantiq has already made two acquisitions in an effort to expand into home networking and wireless LAN (WLAN) technologies.

In October, Lantiq acquired Aware Inc. 's home networking and DSL-related assets and intellectual property. As a result of the deal, Lantiq set up an office in Bedford, Mass., and gained 40 engineers from Aware.

In January this year, Lantiq acquired wireless LAN–related assets and intellectual property from Metalink Ltd. (Nasdaq: MTLK) for $16.9 million. With this acquisition, Lantiq acquires 802.11n Multiple Input Multiple Output (MIMO) technology that can support high-definition video streaming over WLAN.

— Michelle Donegan, European Editor, Light Reading Mobile

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