Mitel To Buy Mavenir For $560M

Mitel has struck a $560 million deal to acquire Mavenir Systems, a company that specializes in voice-over-LTE technologies and one that has recently begun to set its sights on the cable industry and its pursuit of voice-over-WiFi services.

With the acquisition, Mitel said it expects to expand its total addressable market by about $14 billion by 2018. Upon closing of the deal, Mavenir will become the mobile business division of Mitel and retain the Mavenir brand. Mavenir president and CEO Pardeep Kohli will join Mitel as president, reporting to Mitel president and CEO Rich McBee.

Mavenir handiwork includes VoLTE with MetroPCS (now T-Mobile) and IMS-based VoWiFi with T-Mobile US.

Mitel is snapping up Mavenir as the company was starting to get aggressive with a WiFi voice strategy aimed at the cable industry.

Last month, Mavenir launched a voice-over-WiFi solution for cable operators that hooks into an operators existing IMS core network and features session control, application/messaging servers, access/border gateways, subscriber management/activation systems, and clients. Taking it a step further, the system is also designed to help MSOs seamlessly connect services on WiFi and cellular networks, possibly in a so-called “WiFi-First” scenarios that prefer WiFi connectivity and use cellular as a backup.

“We already have a trial underway for voice over WiFi that supports those handouts with a major cable provider,” Kohli said February 26 when the company announced its fourth quarter earnings results. He added that Mavenir has two cable trials underway – one in Europe, and one in the U.S.—with hopes that one of them could push ahead toward commercial deployment within the next couple of quarters.

Kohli said Cablevision Systems, which launched a WiFi-only phone service last month called Freewheel, is not using Mavenir’s product, but sees the launch as one that will catalyze more VoWiFi activity among cable operators.

“With wireless adoption of IP and 4G LTE and demand for next gen mobile services ramping quickly, we see a compelling opportunity to capitalize on a major market transition to add a high-growth mobile business to Mitel," said McBee, in a statement. “We believe the combination of Mitel and Mavenir creates a powerful new value proposition for enterprises and mobile service providers, using a common IP technology layer as the foundation for convergence, growth and competitive differentiation."

Mavenir posted a Q4 net loss of $12.3 million, widened from a loss of $2.8 million in the year-ago quarter, on revenues of $33.7 million, up 24% year-over-year.