Alcatel acquires gateway vendor Watercove

Alcatel said it has finalized an agreement to acquire WaterCove Networks, a move that is reminiscent of Nokia’s acquisition of Tahoe Networks last year, and which could signal further consolidation in the market for mobile network media gateways.

Boston-based WaterCove supplies GPRS Gateway Support Nodes (GGSN), which support the management and distribution of data and other content services. Its carrier customers include U.K. mobile carrier Orange.

Other vendors in the increasingly competitive gateway market include Starent Networks, Sonus Networks, Juniper Networks and Telica, among others. Many market watchers have been expecting consolidation in the wake of the Nokia/Tahoe deal, as well as Motorola’s earlier acquisition of Winphoria.

Alcatel and WaterCove have had an OEM agreement in place since July 2003. For Alcatel, bringing a GGSN product in-house will help the network equipment manufacturer integrate GGSN technology with its own software to better support flexible routing and access of mobile prepaid services, and real-time content charging.

For example, a mobile operator would be able to charge its customers a different price for sports-results multimedia messages than for traffic-warning multimedia messages, or different prices for instantaneous access versus delayed access to the results of a sports event.

"The skill set of WaterCove Networks is highly complementary with that of Alcatel," said Marc Rouanne, chief operating officer of Alcatel's mobile activities, in a statement. "Blending our skills together will allow Alcatel to answer service providers' growing needs for sophisticated user-centric new billing solutions."

With the acquisition, Jayesh Patel, founder and CEO of WaterCove Networks, becomes head of intelligent-GGSN activity within Alcatel.