Optical/IP Networks

Is Starent Ready for M&A Action?

10:00 AM -- A few months ago we suggested that mobile packet core specialist Starent Networks Corp. (Nasdaq: STAR) was well positioned to consider a strategic acquisition that would expand its capabilities and enrich its technology set. (See After Verizon, What's Starent's Next Move?)

And, according to market chatter, that's exactly what it's doing.

The word on the street is that Starent has been holding talks with policy control specialist Camiant Inc. about a potential purchase. (See Camiant Studies Bandwidth Management .)

The move makes sense. The coming wave of LTE mobile infrastructure rollouts is going to require a tightly integrated combination of packet traffic management and policy control capabilities that will (in theory at least) enable operators to manage their network (bandwidth) and service resources to optimum effect and maximize their revenue and customer experience management potential. And that's what a combination of mobile packet core and policy control capabilities can deliver.

In addition, the two companies are already partners and have at least one joint deployment together, at Vodafone Hungary . (See Vodafone Hungary Deploys Camiant.)

And both are well geared up for LTE. (See Camiant Sprinkles In LTE, Starent Adds Smarts to LTE Core, and MWC 2009: Starent Dines on LTE.)

Neither party is commenting on the speculation, as you'd expect.

Camiant is regarded as one of the leading players in the policy server market, and so would make a good catch. It's also doing well in the cable sector, where Starent recently scored a deal with one of Camiant's customers, Cox Communications Inc. (See Camiant Leads Policy Control, Camiant Claims Euro Success, and Starent at Core of Cox's 3G Push.)

Starent, meanwhile, needs all the smarts it can get as it competes with the likes of Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), Huawei Technologies Co. Ltd. , Nokia Networks , and WiChorus Inc. in the battle to be at the heart of the world's LTE networks. (See WiChorus Packet Core Is in the Clear, Starent Reports Q2, and Core Network Challenges LTE Vendors.)

Starent's share price currently stands at $25.22, giving it a market capitalization of $1.8 billion. It ended June this year with nearly $390 million in cash and cash equivalents. Camiant's revenues are not disclosed, but it is believed to be growing quickly, and was on course to double its annual revenues in 2008.

— Ray Le Maistre, International News Editor, Light Reading

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