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Optical/IP

Cisco Eyes Home Base

Cisco Systems Inc. (Nasdaq: CSCO) could be the next major vendor to get interested in the home base station market, possibly through an investment in U.K.-based startup Ubiquisys Ltd. , industry and analyst sources tell Unstrung.

A home base station -- or femtocell -- is a low-cost, low-power 3G cellular radio system that users can put in their dwelling to boost bandwidth and coverage and enable new applications such as fixed/mobile convergence (FMC) in the home. Such mini-base stations have become more interesting to vendors as operators have started to take the devices more seriously, both as an alternative to WiFi hotspots or as a complementary technology.

The concept is particularly popular in Europe, where BT Group plc (NYSE: BT; London: BTA), Orange (NYSE: FTE), and others have started to roll out initial FMC services.

Vendors such as Ericsson AB (Nasdaq: ERIC) and Motorola Inc. (NYSE: MOT) have already jumped on the home base station bandwagon with actual and planned products. Qualcomm Inc. (Nasdaq: QCOM) also recently said that it wants to combine mini-3G radios with WiFi to satisfy convergence-hungry appliance makers. Cisco may be next. Industry and analyst sources tell us that the firm is plotting an investment in UbiquiSys -- the new company formed by ex-IPWireless Inc. CEO, Chris Gilbert.

One industry source in the U.K., who believes Cisco will invest in the startup, describes UbiquiSys's work in the femtocell market so far as "very impressive."

UbiquiSys's core product is the 3G HSDPA ZoneGate home access point system. It is starting to build more convergence -- particularly unlicensed mobile access-based capabilities -- into its system through partnership deals with the likes of Kineto Wireless Inc. and Netopia Inc. . Sony Corp. (NYSE: SNE) is making the firm's mini-basestations.

Such products could be useful to Cisco in the cellular and hotspot sphere -- especially in light of CEO John Chamber's recent speech at CES about the importance of the consumer market and advanced home networking in general for Cisco.

The networking giant is keeping mum if it does have any designs on this emerging market. "Obviously we don't comment on rumor and speculation," says a spokesman for Cisco.

Swindon, U.K.-based UbiquiSys has yet to respond to requests for clarification, but a spokesman for the firm initially told Unstrung that they "are not aware of anyone trying to buy the company."

— Dan Jones, Site Editor, Unstrung

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