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Sprint Ventures Into Mobile Security

The new venture capital arm of Sprint Corp. (NYSE: S) is still smaller than most startups, but the group's investment focus will be a good indicator of the carrier's business focus in the coming year.

Mobile security will be a key area of focus for Sprint Ventures, currently a four-person group in Overland Park, Kan. "It's a hot area that all carriers in the space need to focus on," says Scott Ford, general manager at Sprint Ventures, who recently received a Kauffman fellowship from The Center for Venture Education. "Because the transmission of data is becoming more sophisticated and faster, it's important to make sure the information is secure."

"Sprint sells the quality of the network and they have a pretty big base of enterprise users," says Iain Gillott, founder and principal of iGillott Research Inc. "If viruses get into the network then they're toast."

Other areas of focus for Sprint Ventures will include mobile entertainment, mobile commerce and advertising, fixed/mobile convergence, and "any opportunities where companies can bridge wireless and our joint ventures with cable partners," Ford says.

So far Sprint Ventures has made only a single, undisclosed investment. The plan is to start small, with maybe half a dozen investments in 2006, and expand the operation in 2007 if all goes well. The company decided to form its venture group last fall, shortly after Sprint and Nextel announced the completion of their merger.

"It's part of an overall effort focused on overall innovation for Sprint," Ford says. "We knew that if we did it right, venture activities would help us with this notion of innovation."

During the month of April 2006, private wireless companies announced $490.6 million in new financing, primarily in the carrier, carrier infrastructure, and consumer application sectors, according to Rutberg & Co. , which tracks such investments. Wireless funding announcements for private companies from January 1 through the end of April totaled about $2.2 billion.

There are no immediate plans for Sprint Ventures to lead a major round of financing. "We will likely work as a participant within a syndicate," he says. The group is working with a bevy of venture firms that already invest heavily in wireless technology, including Redpoint Ventures , Sequoia Capital , DCM - Doll Capital Management , Matrix Partners , and Charles River Ventures .

In deciding where its funds go, the group wants to focus on general strategy rather than on straight return on investment, Ford says.

"Strategic value means to help capitalize a company to quickly scale with us," he says. "We have 50 million customers and we'll inject startups with cash to help them scale to our operational needs."

— Carmen Nobel, Senior Editor, Light Reading

materialgirl 12/5/2012 | 3:52:47 AM
re: Sprint Ventures Into Mobile Security At last, a half intelligent comment from a service provider. Instead of focusing on me-too "services" from IMS that consumers don't even want, why not focus on security, an actual service they can provide that consumers DO want. It is too innovative and tough, I suppose, for their competitors to try.
Carmen Nobel 12/5/2012 | 3:52:46 AM
re: Sprint Ventures Into Mobile Security Which specific security problems do the mobile carriers need to solve?
Gabriel Brown 12/5/2012 | 3:52:44 AM
re: Sprint Ventures Into Mobile Security Mobile networks have good AAA and encryption features baked-in to the standards. This is really a security success story.

The challenge comes with the move from closed, controlled, and secure, voice-centric networks to more open IP-orientated networks, with smart phones and PCs as end-points.

Then, depending on what the carrier is trying to do, the security requirements can mushroom. For example:

* Smart phones with open OSs increase the threat level GÇô but, ironically, may not be powerful enough run their own security apps. So there will likely be a need for network-based AV, for example.

* Protection for the data services infrastructure (regular Internet companies have this; mobile operators may be under developed in this area)

* Bigger GTP and Internet firewalls as data traffic increases

* VPN services for corporates, or third-party partners

* Protection for the IMS call-control layer (SBCs, SIP firewalls, etc)

* AAA resources and, possibly, tunnel-termination for alternative access networks.

IGÇÖve just written a report on this last point. The summary is here:

From Closed to Open Mobile Networks
http://www.unstrung.com/inside...


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