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Ericsson Acquires NetSpira

NetSpira Networks SL is the latest data services platform startup to be swallowed by a larger rival player, with Ericsson AB (Nasdaq: ERICY) acquiring the company for an undisclosed sum (see Ericsson Buys Data OSS Firm).

Founded in 2001, NetSpira has developed what it calls an Enhanced Control Solution, which sits alongside the GPRS gateway support node (GGSN) or the packet data serving node (PDSN) in wireless networks. The kit aims to enable operators to create, rate, and bill for data services without needing to upgrade their transport infrastructures.

Despite keeping a low profile since its inception, the Spanish startup claims more than 25 carrier deployments as a result of partnership and OEM deals with the likes of Hewlett-Packard Co. (NYSE: HPQ), Lucent Technologies Inc. (NYSE: LU), and Starent Networks Corp. (see Starent, NetSpira Do Billing and NetSpira, Lucent Win Billing Contract). Customer wins include Eurotel Praha spol. s.r.o. in the Czech Republic, MobileOne Ltd. (M1) (Singapore: MONE) in Singapore, Telefònica Mòviles SA in Spain, and Vodafone Group plc's (NYSE: VOD) Spanish subsidiary (see Czechs Czoose NetSpira, NetSpira Charges Up Telefonica, and Vodafone Spain Trials NetSpira).

With a headcount in the mid-20s, NetSpira has raised only one round of funding, worth “a few million” dollars, from Spanish VC Bullnet Capital (see NetSpira Cranks Up).

“We have proven to be sustainable,” says Salim A. Mawji, executive VP of business development. “Our cost structure has been very carefully maintained... We are going to be a business unit of Ericsson in their packet core network division. Given that we are a legal entity of Ericsson now, we will fit into Ericsson Spain’s legal unit. It makes perfect sense. We don’t have to move to Stockholm.”

“NetSpira's technology will be integrated into Ericsson's Gateway GPRS Support Node, which has been developed in cooperation with Juniper Networks Inc.,” notes a joint statement. “The existing ECS product line will be further developed and sold via existing channels as well as forming part of Ericsson's core mobile data offering. Ericsson will continue to support NetSpira's existing customers and partners.”

The deal follows the acquisition of rival startup P-Cube by Cisco Systems Inc. (Nasdaq: CSCO) in August 2004 (see Cisco Plucks P-Cube for $200M). Struggling startup ProQuent Systems Corp. was also bought by Bytemobile Inc. in March this year (see Bytemobile Swallows ProQuent). Megisto Systems Inc. and VoluBill are the only two remaining startups in this space.

— Justin Springham, Senior Editor, Europe, Unstrung

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