Xura is betting big on 5G -- buying Mitel Mobility and Ranzure -- in a bid to become a player in next-generation virtualized networks and Internet of Things (IoT) applications.
Xura Inc. announced today that it is buying the Mitel Networks Corp. 's Mobility unit -- formerly Mavenir Systems -- for $350 million in cash. It is also acquiring startup Ranzure Networks for an undisclosed sum. Ranzure, a Cloud RAN company started by former Mavenir CEO, Pardeep Kohligot, received $7.6 million in seed funding this June from Mitel Mobility and others. (See Mitel to Offload Mobile Unit to Xura for $350M+.)
Wakefield, Mass.-based Xura was a unified communications company spun-out of Comverse Technology in 2012. It was taken private by Siris Capital Group for $643 in August. (See Siris Capital Takes Xura Private in $643M Deal.)
This Monday, however, Xura revealed that it will now attempt to reinvent itself as a 5G networking player, by bringing together the ex-Mavenir unit from Mitel with its former CEO. Kohligot will become CEO of Xura, replacing Philippe Tartavull, and managing the combined company when the transactions close in the first quarter of 2017. Xura is moving its headquarters to Dallas, Texas.
Xura is also bringing on some big names to flesh out the combined company. Krish Prabhu, former CTO of AT&T and former President of AT&T Labs, will join the board of directors. Former Alcatel-Lucent CFO Hubert de Pesquidoux already serves as executive chairman of the company. (See AlcaLu's CFO Signs Off.)
Xura says it will offer a full portfolio of 5G software for operators. This will include virtualized voice, video, messaging, security, radio access and core software for "5G ready" networks.
Xura is taking an ambitious, if risky, bet on being a wide-scale 5G software provider. For one thing, operators may not need a complete portfolio for their initial 5G rollouts. This is because LTE will be used as the control plane in the Phase 1 5G specification. (See 3GPP Wants to Complete Initial 5G Radio Spec in June 2018.)
This means that LTE will be used to manage and set up 5G sessions. And operators will use LTE for voice and messaging, much like 4G networks still fall back to 3G for voice in many network deployments.
So, part of the suggested 5G software portfolio from Xura may not become entirely relevant for operators until the next decade.
The company, meanwhile, already faces competition from successful startups like Affirmed Networks Inc. -- as well as established vendors -- on bedrock 5G software, such as an updated core. (See Affirmed: 5G-Ready Core Is Table Stakes for Operators.)
Nonetheless, bringing on Prabhu, and relocating to Dallas does seem to suggest that Xura believes it has a chance of snagging AT&T Inc. (NYSE: T) as a customer.
— Dan Jones, Mobile Editor, Light Reading