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Tellabs Wraps WiChorus Purchase, Stock Down Slightly

Tellabs Inc. (TLAB) officially has entered the “mobile core” market with the closing of its WiChorus purchase, announced in mid-October.

The deal was projected for completion in several months but wrapped up on Dec. 1 after Tellabs received antitrust clearance from the Federal Trade Commission. The Illinois-based telecom equipment maker now is positioned to help wireless carriers build 3G/4G mobile networks as wireless broadband demand soars.

“By adding this breakthrough technology, we can help customers simplify networks, reduce expenses and deliver new applications to generate revenue,” Tellabs president and CEO Rob Pullen said in a prepared statement.

For example, the company said it now sells mobile IP products for applications including LTE and WiMAX. Plus, the WiChorus gear provides eight times more throughput, and four times more simultaneous Internet connections and active users as compared to rival platforms in gateway applications. All told, the technology can save customers as much as 50 percent in capital expenses, Tellabs said.

Indeed, Tellabs’ timing seems spot-on. Investment bank UBS said recently the wireless data sector is growing at a rate of 30-50 percent each year, which means the entire mobile core market could reach $2.6 billion by 2013.

Meantime, as expected, Tellabs is keeping the WiChorus office in San Jose, Calif., as well as the acquired firm’s employees around the world. Rehan Jalil, WiChorus founder and its now-former CEO, has joined Tellabs as senior vice president of mobile Internet. He reports to Pullen.

With the addition of WiChorus, Tellabs now employs about 3,300 people.

Tellabs’ stock fell slightly on the finished-merger news. Its shares dropped .36 percent to $5.61 by 12:21 p.m. Eastern.


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