Extends mobile solution with innovative 3G/4G mobile packet core to help
customers succeed
NAPERVILLE, Ill., Oct. 22 /PRNewswire-FirstCall/ -- Users want mobile Internet
services anywhere, anytime. Sales of smartphones are growing more than 30% a
year, and netbooks are taking root. As a result, Tellabs' mobile customers
expect mobile data traffic to grow 30% to 50% a year for the foreseeable
future. Such high growth demands scalable, next-generation network
architectures to deliver 3G and 4G services.
That's why Tellabs, a leader in mobile backhaul networks, will acquire
WiChorus of San Jose, Calif. The combination creates advanced 3G/4G mobile
networks that revolutionize the mobile Internet, deliver new applications to
generate revenue and simplify networks to achieve significant savings for
mobile carriers.
"As we expand logically into an adjacent market with the SmartCore(TM)
platform, Tellabs and WiChorus can help mobile customers succeed by
revolutionizing the mobile Internet," said Robert W. Pullen, chief executive
officer (CEO) and president of Tellabs. "Our customers are excited about this
combination, since they can deliver rich, distinctive personalized user
experiences such as mobile Internet, video and commerce. This move
complements, differentiates and advances our growth solutions portfolio
including Tellabs Mobile, Optical and Business Solutions."
The acquisition adds WiChorus' breakthrough SmartCore(TM) mobile packet core
platform, the only currently available platform that is purpose-built for 4G,
LTE and WiMax, with support for 3G. The SmartCore(TM) platform addresses the
unique requirements of the mobile Internet as it:
-- Includes a full range of mobile IP products (from low entry price to
highly scalable) for applications including GGSN, LTE and WiMax, plus
new application enablement with superior DPI capability.
-- Offers 8 times more throughput, 4 times more simultaneous Internet
connections and active users, compared with competitive platforms in
gateway applications.
-- Uniquely combines world-class application analytics with a mobile core
gateway for improved traffic engineering and network optimization.
-- Enables customers to analyze and monetize more than 400 of the top
mobile Internet applications.
-- Makes mobile networks content-aware and context-aware, with
personalized
application-awareness.
-- Outperforms other platforms in delivering mobile Internet capacity.
For
example, competitors' capacity significantly degrades (as much as 30%
to
50%) during deep-packet inspection (DPI).
-- Delivers new and differentiated applications such as Internet offload
and distributed LTE gateway. The SmartCore(TM) platform can offload as
much as 70% of traffic at the network edge, increasing core network
efficiency and improving user experiences. As a result, customers can
save as much as 50% in capital expenses, compared with the present
method of operation.
Under the terms of the transaction, which was approved by both companies'
boards of directors, Tellabs will pay approximately $165 million in net cash
for WiChorus. The transaction is expected to be dilutive to Tellabs' earnings
in 2010, then additive to Tellabs' non-GAAP earnings in 2011 and beyond.
Non-GAAP earnings exclude amortization associated with acquired intangibles
and other purchase accounting adjustments.
"WiChorus SmartCore is the leading packet core solution in the industry,
providing the highest performance and built-in optimization and monetization
capabilities," said Rehan Jalil, president and CEO of WiChorus. "The
combination of the world's most advanced packet core with Tellabs' IP mobile
backhaul solution and intelligent network manager creates a winning
combination and a comprehensive mobile Internet portfolio. The combination
will enable service providers to enhance mobile users' experience, deliver new
revenue-generating applications and achieve savings."
On completion of the transaction, Rehan Jalil will head a newly formed Tellabs
IP and mobile Internet group, as senior vice president, reporting to Pullen.
The transaction is subject to customary closing conditions and regulatory
reviews. It is expected to close within the next several months.
Prior to close, Tellabs and WiChorus will continue to operate as separate
companies. The combined company will employ about 3,250 people.
Simultaneous Webcast and Teleconference Replay -- Tellabs will host an
investor teleconference at 7:30 a.m. Central Daylight Time today to discuss
the WiChorus acquisition. To access the conference call, dial 866-393-8608 at
least 15 minutes prior to call-start time. (Outside the United States, call
706-679-4976). When prompted, enter the Tellabs conference ID number:
37493961. Internet users can hear a simultaneous webcast of the teleconference
at www.tellabs.com; click on the webcast icon. A taped replay of the call will
be available beginning at approximately 10:30 a.m. Central Daylight Time
today, until midnight Central Daylight Time on Oct. 23, at 800-642-1687.
(Outside the United States, call 706-645-9291.) When prompted, enter the
Tellabs conference ID number: 37493961. A podcast of the call will be
available at www.tellabs.com/news/feeds/ later today.
About Tellabs -- Tellabs helps customers succeed through innovation. That's
why 43 of the top 50 global telecom service providers choose our mobile,
optical and business solutions. We help telecom service providers,
independent operating companies, MSO/cable TV companies, enterprises and
government agencies get ahead by adding revenue, reducing expenses and
optimizing networks. With wireless and wireline networks in more than 90
countries, we enrich people's lives by innovating the way the world
connects(TM). Tellabs (Nasdaq: TLAB) is part of the NASDAQ Global Select
Market, Ocean Tomo 300(TM) Patent Index, the S&P 500 and several corporate
responsibility indexes including FTSE4Good and eight KLD indexes.
www.tellabs.com
About WiChorus -- WiChorus is an industry leader in Smart 4G Packet Core
infrastructure products. Its purpose-built SmartCore platform's unmatched
performance with integrated content and network intelligence enables operators
to deploy smart HSPA, LTE and WiMAX Packet Core networks, that optimize
network resources, deliver new revenue generating services and monetize the
Internet. With headquarter offices in San Jose, California, WiChorus is a
private company with financial backing from Accel Partners, Mayfield Fund,
Redpoint Ventures and Pinnacle Ventures. For more information, please visit
www.wichorus.com. For more information, please visit www.wichorus.com.
Forward-Looking Statements -- Statements in this press release regarding the
proposed Tellabs acquisition of WiChorus. which are not historical facts,
including expectations of financial results for the combined companies (e.g.,
projections regarding revenue, earnings, cash flow and cost savings), are
"forward-looking statements." Forward-looking statements are not guarantees of
future performance and involve risks, uncertainties and other factors that may
cause either company's actual performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by those statements. Either company's actual future results could
differ materially from those predicted in such forward-looking statements.
Investors and security holders are cautioned not to place undue reliance on
these forward-looking statement and any such forward-looking statements are
qualified in their entirety by reference to the following cautionary
statements.
Important factors upon which the forward-looking statements presented in this
release are premised include: (a) receipt of regulatory and stockholder
approvals without unexpected delays or conditions; (b) timely implementations
and execution of merger integration plans; (c) retention of customers and
critical employees; (d) economic changes impacting the communications
industry; (e) successfully leveraging Tellabs/WiChorus comprehensive product
offering to the combined customer base; (f) the financial condition of
communications service providers and equipment vendors, including any impact
of bankruptcies; (g) the impact of customer and vendor consolidation; (h)
successfully introducing new technologies and products ahead of competitors;
(i) successful management of any impact from slowing economic conditions or
customer demand; and (j) protection and access to intellectual property,
patents and technology. In addition, the ability of Tellabs/WiChorus to
achieve the expected revenues and accretion will be affected by the effects of
competition (in particular the response to the proposed transaction in the
marketplace), the effects of general economic and other factors beyond the
control of Tellabs/WiChorus, and other risks and uncertainties described from
time to time in Tellabs public filings with the Securities and Exchange
Commission. Tellabs disclaims any intention or obligation to update or revise
any forward-looking statements.
Glossary
3G Mobile Networks are wireless networks build for digital voice and
high-speed data, including video.
4G Mobile Networks are the future generation of wireless networks, designed to
offer broadband speeds and integrate different types of mobile technology.
LTE or Long Term Evolution, which is still being defined by industry standard
bodies, is faster, cheaper and better than 3G.
WiMax provides wireless broadband Internet service in a coverage area of up to
30 miles in diameter.
HSPA or high-speed packet access is a high-speed, 3G digital packet service
based on GSM (global system for mobile communications) standard.
DPI or deep packet inspection looks into a packet or traffic stream to
determine its impact and make decisions on its significance, so it can be
handled appropriately to improve the user experience.
GGSN or Gateway GPRS Support Node is a component that fits into the mobile
switching center of a wireless network.
Tellabs® and Tellabs logo® are trademarks of Tellabs or its affiliates in the
United States and/or other countries. Any other company or product names
mentioned herein may be trademarks of their respective companies.
SOURCE Tellabs
media, George Stenitzer, +1-630-798-3800, george.stenitzer@tellabs.com,
investors, Tom Scottino, +1-630-798-3602, tom.scottino@tellabs.com, both of
Tellabs
