Dangers lie ahead as M&As surge with Oberthur, Intel, HP fighting for a technology edge

London, UK. June 16, 2015:  Last year saw global TME (telecoms, media & entertainment) mergers & acquisitions (M&A) reach US$34.5 billion*, and this trend is predicted to increase in 2015. Among others, Oberthur is buying OTA clients and expertise, Intel sees IoT potential in Altera, while HP is acquiring ConteXtream to accelerate NFV adoption. But experts are urging firms to understand the target business before they buy.

Digital security solutions provider, Oberthur Technologies (OT), has completed its acquisition of Prodo Telecom. Prodo is one of the few companies exclusively specialising in Over-The-Air (OTA) platforms.

These allow mobile operators to update SIM (subscriber identity module) and embedded cards during their lifecycle, relying on short messages and data connections, minimising card replacement costs, optimising their roaming services and providing new value-added services to their customers.

Since its creation in 2001, Prodo Telecom has become a technology leader thanks to its next-generation, modular and lightweight product. Prodo’s 50 reference clients worldwide are mainly comprised of established mobile network operators (MNOs) ranging from small-sized to tier-1 groups.

 

Why Intel is acquiring Altera Corporation

 

Intel_Altera.Market_shares.6.15

Intel has agreed to buy Altera Corporation for US$54 a share (approximately $16.7 billion) making this Intel’s largest purchase. As Tom Hackenberg, principal analyst, embedded processing for IHS says, “Intel is the largest supplier of microprocessors (MPUs) in the world, with overall semiconductor revenues nearing $50 billion in 2014 and MPUs comprising 80% of that revenue. While not as large as Intel, with $2 billion in 2014 revenues, Altera is the second-largest supplier of programmable logic devices (PLDs) and system-on-chip (SoC) field programmable gate arrays (FPGAs).

Demand for desktop PCs and forecasts for portable PCs, Intel’s largest MPU markets, have slowed in recent years, largely through the advent of smartphones and tablets. Communications infrastructure and data centre equipment, however, make up some of the largest synergistic markets for Intel and Altera. Intel is already the leading supplier of high-performance wired and wireless telecommunications infrastructure processor solutions and — with an increasing market for IoT connected devices — these markets provide even greater opportunity for the right solutions. Altera’s position as a strong supplier of broadband, networking and telecoms solutions was likely a crucial consideration for Intel, when the company decided to purchase Altera.

 

ConteXtream’s SDN controller platform ‘complements’ HP OpenNFV

Saar Gillai, SVP and general manager NFV at Hewlett-Packard Company, also announced recently that HP has agreed to acquire ConteXtream, a provider of OpenDaylight-based, carrier-grade SDN fabric for NFV, and a current HP OpenNFV partner. Headquartered in Mountain View, California, ConteXtream’s solutions allow service providers to create a more flexible and programmable network through an SDN/NFV model. Its open SDN controller platform is said by HP to complement the latter’s NFV expertise as well as telecommunications and IT experience.

conteXtream_logo

ConteXtream’s scalable and open and standards-based technology delivers innovative capabilities like advanced service function chaining, and is deployed at a number of major carrier networks across the globe. It connects subscribers to services, enabling carriers to leverage their existing standard server hardware to virtualise functions and services.

Saar Gillai of HP
Saar Gillai says the acquisition of ConteXtream will see HP increase its support for OpenDaylight

 

ConteXtream’s SDN controller platform complements HP OpenNFV solutions and, says Gillai, “aligns with NFV’s evolution as an open source-driven architecture. With this acquisition, HP will increase its involvement in and contribute key ConteXtream capabilities to the OpenDaylight community and accelerate delivery of an open source-based, carrier-grade SDN controller.”

When the transaction closes, ConteXtream will become part of HP’s Communications Solutions Business. The company’s current CEO, chairman, and co-founder, Nachman Shelef will continue to lead the ConteXtream business within HP reporting to Saar Gillai.

 

Make sure you understand new business areas

A study of 100 senior corporate executives by global law firm Reed Smith, in partnership with Mergermarket, reveals that 84% of technology, media and entertainment (TME) companies expect to see more cross-sector convergence M&A deals over the next two years.

The report, entitled Wired up: The convergence of technology, media and entertainment, explains the changing M&A landscape for TME firms. This is being driven by an increasingly fierce battle fought by TME firms who are attempting to gain a competitive edge in the market. Last year saw TME deals amounting to US$34.5 billion, and this trend is predicted to increase further.

The Wired up report also shows that TME companies seeking growth are increasingly crossing borders, with 57% saying their next acquisition is likely to be outside their home market. Of those businesses in search of cross-border opportunities, 37% say they are most likely to target Asia-Pacific, followed by Western Europe (23%) and North America (17%). These expectations must be set against the need for firms to understand the political and regulatory risks in the target markets.

This desire to converge is not limited to the global giants in the industry, say the report’s authors. There has been a recent upsurge in quad-play deals, in which communication service providers (CSPs) seek to become a one-stop shop for TV, broadband, fixed and mobile telephony.

Michael Young, corporate finance partner at Reed Smith, explains: “With increased cross-border convergence activity, companies must be prepared for the regulatory challenges that will result as they move from one jurisdiction to another. Local guidance, whether that be legal, commercial or financial, thorough due diligence and thoughtful deal structuring is critical to the success of these transactions.”

Nick Cheek, global managing editor of Remark, the events and publications division of the Mergermarket Group, adds: “In the face of aggressive and agile competition, trusted business models can no longer be relied on. For many companies, survival increasingly hinges on developing capabilities beyond their traditional core.”

* Click here to view the full convergence M&A report.

 

RECENT ARTICLES

Semtech enhances global connectivity with NTN support in HL78 modules

Posted on: March 29, 2024

Semtech Corporation has announced the integration of non-terrestrial network (NTN) support into its HL series LPWA modules, specifically the HL7810 and HL7812. This significant advancement showcases a leap forward in enabling uninterrupted global connectivity even amidst the most challenging conditions.

Read more

Enhance EV charging performance with cellular connectivity

Posted on: March 28, 2024

Electric vehicles (EVs) are steadily growing their market share at the expense of internal combustion engine vehicles. The growth is fuelled by several factors. Perhaps most importantly, prices for EVs have started to drop as competition in the industry is intensifying. New players and models are emerging, prompting several established EV makers to lower their

Read more
FEATURED IoT STORIES

What is IoT? A Beginner’s Guide

Posted on: April 5, 2023

What is IoT? IoT, or the Internet of Things, refers to the connection of everyday objects, or “things,” to the internet, allowing them to collect, transmit, and share data. This interconnected network of devices transforms previously “dumb” objects, such as toasters or security cameras, into smart devices that can interact with each other and their

Read more

The IoT Adoption Boom – Everything You Need to Know

Posted on: September 28, 2022

In an age when we seem to go through technology boom after technology boom, it’s hard to imagine one sticking out. However, IoT adoption, or the Internet of Things adoption, is leading the charge to dominate the next decade’s discussion around business IT. Below, we’ll discuss the current boom, what’s driving it, where it’s going,

Read more

9 IoT applications that will change everything

Posted on: September 1, 2021

Whether you are a future-minded CEO, tech-driven CEO or IT leader, you’ve come across the term IoT before. It’s often used alongside superlatives regarding how it will revolutionize the way you work, play, and live. But is it just another buzzword, or is it the as-promised technological holy grail? The truth is that Internet of

Read more

Which IoT Platform 2021? IoT Now Enterprise Buyers’ Guide

Posted on: August 30, 2021

There are several different parts in a complete IoT solution, all of which must work together to get the result needed, write IoT Now Enterprise Buyers’ Guide – Which IoT Platform 2021? authors Robin Duke-Woolley, the CEO and Bill Ingle, a senior analyst, at Beecham Research. Figure 1 shows these parts and, although not all

Read more

CAT-M1 vs NB-IoT – examining the real differences

Posted on: June 21, 2021

As industry players look to provide the next generation of IoT connectivity, two different standards have emerged under release 13 of 3GPP – CAT-M1 and NB-IoT.

Read more

IoT and home automation: What does the future hold?

Posted on: June 10, 2020

Once a dream, home automation using iot is slowly but steadily becoming a part of daily lives around the world. In fact, it is believed that the global market for smart home automation will reach $40 billion by 2020.

Read more

5 challenges still facing the Internet of Things

Posted on: June 3, 2020

The Internet of Things (IoT) has quickly become a huge part of how people live, communicate and do business. All around the world, web-enabled devices are turning our world into a more switched-on place to live.

Read more