Korea's Ace buys into remote radio head growth
Acquires UK-based Axis NT for $35m to tap into strong carrier and OEM interest
Published: 14 May, 2010
READ MORE: M&A | South Korea | LTE
Remote radio heads (RRH) are set to a defining feature of base stations in the 4G world, as seen by major commitments from advanced carriers like NTT DoCoMo, which said this month that it plans to invest about $2bn in these modular architectures over the coming three years.
The use of RRH, which divides the radio from the baseband and supports more flexible roll-out and migration strategies, is also bringing some non-traditional players into the wireless infrastructure market, either directly or through deals with the major OEMs. So we can expect a wave of alliances and even acquisitions as vendors position themselves for the LTE boom, and Korea's Ace Technology has made an early move, acquiring UK-based pioneer Axis Network Technology.
Ace's core business is in wireless network components and its acquisition of Axis NT gives it a strategic expansion into key growth areas - flexible base stations with RRH, and the growing trend for carriers to build out 4G with compact base stations in dense networks of small cells. The firm will now sell RRH along with existing products such as RRH filters.
Ace will pay $35m for Axis NT, split between the vendor itself, with 55% ownership, and holding firm Ace & Partners, with 45%.
"There is only a handful of companies in the world today that can develop and manufacture complete RRHs with high efficiency amplifiers, software and RF modules. The combination of Axis's RRH technology and product platforms together with Ace's global manufacturing infrastructure makes the combined entity very competitive in the global market," said Ace CEO Koo Gwanyoung. The company supplies the top four base station vendors and is looking to offer them a wider range of products. "Our customers have been looking for competitive RRH suppliers so this acquisition provides us with an opportunity to work with them at a whole different level - from components to systems," Koo added.
For Axis NT, whose primary customer base has been in WiMAX, the acquisition brings the scale to expand the portfolio and speed time to market. COO Steve Cooper commented in a statement: "We now have the resources and scale to satisfy the most demanding requirements of our global OEM customers. The acquisition allows us to focus our R&D resources on widening our product range, reducing time to market and increasing overall levels of innovation."
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