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Tellabs announced its plan to acquire WiChorus in October 2009 and completed the deal on December 1, 2009. The acquisition was intended to extend Tellabs from mobile backhaul into mobile packet core, using WiChorus technology that Tellabs marketed as the SmartCore 9100 platform. The company later stopped developing new mobile packet-core products, though it said it would continue supporting existing customers.

Why did Tellabs acquire WiChorus?

Tellabs’ stated goal was to broaden its mobile-network business beyond backhaul—the transport of traffic between cell sites and the rest of the network—into the mobile packet core. The packet core handles IP data connectivity and associated gateway and control functions. Adding WiChorus was meant to give Tellabs a product for that adjacent part of operators’ networks, while Tellabs contributed its customer and service reach.

In its December 2, 2009 closing release, Tellabs said: “The acquisition enables Tellabs, a leader in mobile backhaul networks, to expand into mobile packet core networks, deliver new applications and provide significant savings for mobile carriers.” That was the company’s description of the deal’s intended benefits, not evidence that the anticipated savings or growth were achieved.

How much did Tellabs pay?

Deal measure Amount and meaning
Cash consideration $180 million for WiChorus capital stock and vested options; Tellabs assumed unvested options.
WiChorus cash balance $15.3 million, as reported by Tellabs for 2009.
Net cash price $164.7 million in Tellabs’ 2009 annual report, or approximately $165 million when rounded.

The deal announcement was made in October 2009, and the acquisition closed December 1, 2009, after Hart-Scott-Rodino approval from the Federal Trade Commission.

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What was the SmartCore 9100?

Tellabs incorporated WiChorus’ technology into its SmartCore 9100 platform and described it as a mobile-core gateway. The company positioned it for packet-core applications in 4G WiMax and LTE networks, as well as use in 3G networks. Tellabs presented SmartCore alongside its IP mobile-backhaul products as part of a broader set of offerings for mobile carriers.

These descriptions establish Tellabs’ intended product positioning; they do not independently verify performance claims or show that one network-generation application was superior to another.

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How did the acquisition fit Tellabs’ business at the time?

Tellabs’ 2009 figures show the company’s broader emphasis on product development and growth offerings, but they do not isolate the acquisition’s effects. More than 80% of its research and development spending in 2009 went to mobile, optical, and IP/Ethernet product development. Growth products and services accounted for 46% of revenue that year.

Tellabs-reported measure Figure Qualification
Data-product revenue $342.0 million in 2009; $215.1 million in 2008 Tellabs said SmartCore began to be included in data products in the fourth quarter of 2009, so the 2009 total does not represent a full year of SmartCore revenue.
R&D spending allocation More than 80% in 2009 Applied collectively to mobile, optical, and IP/Ethernet product development.
Growth products and services share of revenue 46% in 2009 Tellabs’ company-reported category.

These are historical company figures, not independent measurements of mobile-data traffic growth or proof that the WiChorus acquisition succeeded. The available company figures do not support a specific traffic-growth statistic attributable to this transaction.

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What happened to Tellabs’ mobile packet-core business?

Tellabs’ 2011 Form 10-K said the mobile packet-core market had not measured up to its expectations during the preceding two years and that the company would stop developing new products for that market. It also said it would continue supporting existing customers. The disclosure therefore marks a retreat from further product development, not an immediate end to customer support or proof that installed equipment stopped operating.

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