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Cisco to Acquire Portable Broadband Leader Navini Networks, Inc.

Acquisition will help the penetration and adoption of broadband worldwide

October 23, 2007

Today, Cisco announced its intentions to acquire Navini Networks, Inc. The Richardson, TX-based company, known as a leading independent broadband wireless access equipment provider, offers users rich experiences anytime, anywhere, and across any network. News@Cisco spoke to Cisco senior vice president/general manager, Service Provider Technology Group, Tony Bates, about the acquisition and how it will help extend and enhance Cisco's IP Next Generation Network (IP NGN) vision to enable service providers to deliver any network service to any device over any access technology.

What is WiMAX technology? What are the opportunities for Cisco in this market through this acquisition?

Tony Bates: WiMAX, or Worldwide Interoperability for Microwave Access, is an Internet Protocol technology designed to provide wireless broadband services over long distances. Through this acquisition, Cisco is addressing several key goals in our service provider IP Next Generation Network architecture. Specifically, it helps to realize our corporate mobility vision to deliver rich user experiences anytime, anywhere, and across any network. In conjunction with our cable and Ethernet solution sets, WiMax supports Cisco's ultimate goal of accelerating the penetration and adoption of broadband worldwide.

Fast, low-cost, and readily accessible broadband is especially critical for country transformation in "emerging markets." We believe there is a direct correlation between the availability of broadband services and standard of living. The Internet has the potential to enable emerging countries to leapfrog legacy technologies altogether in favor of leading edge technologies, and therefore, put them in the forefront of the Internet economy. Broadband, arguably, is key to bringing access to the Internet and to the average consumer. We are excited about the opportunity for our service provider customers in the emerging countries to use technologies such as WiMAX to roll out portable broadband services quickly and on a mass-market scale over an end-to-end Cisco IP Next Generation Networks infrastructure.

You mentioned "Portable Broadband" - can you explain that further?

Tony Bates: Portable Broadband is a CPE-centric, un-tethered, high speed, efficient broadband technology that delivers data-intensive services to a wide range of IP devices over a wide area. For users, it's an additional access technology for the connected home and allows consumers to enjoy high-speed network experiences to a wide range of devices, such as their PC, TV or phone. Users simply buy a WiMax modem, plug it into their computer, and fire up the service. They don't have to wait for any lines to be installed or services to be switched on, and if they were to move, they can easily take their modem with them and keep their current service.

For providers, Portable Broadband is great too. By providing the means to users to do the installation themselves, it eliminates the time consuming and costly need for the provider to send a truck out to the customers' premises. This process is significantly more efficient and cost-effective. In addition, since this is all done over their existing IP Next Generation Networks, providers can now more quickly offer new services to their consumer and small businesses customers.

Back in 2004, Cisco CDO Charles Giancarlo said Cisco isn't interested in WiMAX. Why is now the right time for Cisco to enter this market?

Tony Bates: While Cisco has not historically sold WiMAX radio systems, we have delivered products and solutions that are part of WiMAX-based broadband wireless systems. These include the Mobile Wireless Home Agent, Cisco Network Registrar, partnerships with several WiMAX radio systems vendors, and the Cisco ServiceMesh architecture which includes WiMAX as a tested backhaul option.

Cisco listens to our customers and observes the market. Recently, the WiMAX radio systems to deliver broadband wireless have matured, customers are deploying live networks, and overall investment and demand as increased. Therefore, Cisco views this as the proper time to add licensed WiMAX products to our broadband wireless offer.

Also, given the IP-centric nature of the WiMAX technology, it is a natural fit for Cisco's strategy, experience, expertise, and IP NGN product portfolio. Licensed WiMAX radio systems represent a strategic opportunity for Cisco to quickly address the pent-up demand for broadband connectivity in emerging countries where penetrations are comparatively low.

Cisco's strategy is to capitalize on market transitions, and Cisco believes that WiMAX has the ability to transform the broadband wireless market to an open IP-based platform, benefiting both service providers and their consumer and business customers.

Why Navini Networks? What are the competitive advantages of Navini Networks?

Tony Bates: As part of Cisco's normal due diligence in acquiring a company, we carefully evaluated a number of possibilities before selecting Navini Networks. We believed that Navini Networks best met our key requirements for successful acquisitions. Specifically, the two companies share a common vision and there is good compatibility of technologies, people and culture.

Navini Networks is a pioneer in the industry, with innovation available for today's market, and expertise and intellectual property to support even broader innovation for the future. Navini Networks also has a leading portfolio of "Smart WiMAX" products and technologies with wide-ranging offerings including subscriber modems, base stations, adaptive antenna arrays and management systems. With the acquisition of Navini Networks, Cisco is well-positioned to offer complete end-to-end wireless broadband solutions within the IP NGN architecture. By providing differentiated revenue-generating services to operators worldwide, Cisco is now particularly well positioned to address the immediate market needs in emerging markets.

Entering this market, Cisco will face new competition from its traditional mobility partners. What does this mean for Cisco's future partnerships?

Tony Bates: As I mentioned earlier, the opportunity of the Navini Networks acquisition is in helping Cisco further execute on our Mobility Vision of delivering rich user experiences anytime, anywhere, and across any network. This is an inherently technology-agnostic view and we see WiMAX as one of many access technologies providers need to offer in order to deliver the connected life to their subscribers, whether they be at home, at work, or on the move. Innovation at Cisco is based on our ability to build, acquire and partner. We will continue to use one or all of these strategies to meet our business goals.

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