Telstra has revealed the addition of almost one million new mobile services in the six months to December 2011, but Sensis revenues plummeted 24 percent in 12 months.
Cisco Systems is to acquire Scientific-Atlanta, one of the world's largest suppliers of set-top boxes, end-to-end video distribution networks and video system integration, for approximately $US5.3 billion, making the acquisition one of Cisco's largest ever.
Cisco expects to be able to leverage Scientific Atlanta's expertise and technologies in large scale video distribution systems, and its own Internet Protocol routing and switch technologies to enable service providers to "move beyond video/IPTV to develop and deliver a variety of integrated media services in the connected home."
The experience and expertise in the consumer market of its Linksys division is also seen as being a key to exploiting synergies.
Cisco's president and CEO, John Chambers, said: "The combination of Cisco and Scientific-Atlanta brings unmatched experience and innovation in delivering large scale video systems and networks, and the addition of Scientific-Atlanta further extends Cisco's commitment to and leadership in the service provider market. Moreover, Cisco's international presence and IP leadership will also create strategic synergies that accelerate the combined growth opportunity."
Chambers continued, "As consumers demand more sophisticated information and entertainment services in their home, tightly coupled applications, devices and networks will be essential. The collective strength of Linksys and Scientific-Atlanta will extend Cisco's leadership position across the entire networked digital home."
Following the close of the transaction, Scientific-Atlanta will become a division of the Routing and Service Provider Technology Group under the leadership of Cisco senior vice president Mike Volpi. Scientific Atlanta's chairman, CEO and president Jim McDonald will report to Volpi.
Commenting on the deal, research company, Infonetics said: "Most of Cisco's acquisitions are technology buys where there's very little market share. In this case, Cisco is investing into an adjacent market, buying both market share and technology in the hot IPTV market, which we forecast to reach $US44 billion and 53.7 million subscribers worldwide by 2009.
"With Scientific-Atlanta's cable set top boxes, Cisco strengthens their position in the service provider video market with both cable and telco providers. Video is the killer app of triple-play, and mobility is the killer app of quadruple play. Cisco now has both. Quadruple play is going to be huge. Video will go mobile from TV to PC to PDA to phone."
David Bass
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