Nokia Siemens acquires carrier Ethernet vendor

Nokia Siemens Networks announced plans to acquire carrier Ethernet equipment vendor Atrica today, in what would be the joint venture’s first acquisition.

Terms of the deal weren’t disclosed.

Seven-year-old Atrica has raised a total of nearly $180 million in funding, including a $28 million round last year that included AT&T as a new investor as well as Innovacom, the venture capital arm of France Telecom, which is an Atrica customer.

Atrica sells carrier Ethernet equipment for metro, edge, aggregation and access networks. Last year, the company added an active-electronics Ethernet access switch designed for outside deployment. The box can be used in Ethernet-based fiber-to-the-curb and fiber-to-the-building applications, though it was originally developed for (and with) Cox Communications for a variety of applications, including potential use for WiMax backhaul.

Atrica’s customers also include Orange, Optimum Lightpath and American Fiber Systems. In North America, Atrica’s products are sold by Fujitsu Network Communications.

Earlier this summer, NSN was rumored to have discussed acquiring Tellabs, another fiber access equipment vendor. Atrica, a smaller company, is more tightly focused on access than Tellabs and focuses more on Ethernet access for business customers rather than passive optical networking for residential broadband.

In an interview with Telephony this morning, Umesh Kukreja, Atrica’s director of product marketing, said Atrica’s focus on edge and access networks would effectively complement NSN’s focus on carrier Ethernet transport in the core and metro core. And Atrica’s focus on business and wireless applications would complement NSN’s activities in residential markets.

It doesn’t hurt, he added, that most of Atrica’s 180 employees (including customer support and research and development) are based in Israel, along with NSN’s own carrier switching assets.

Atrica will be integrated into NSN's IP Transport division under the direction of Bernd Schumacher. Kukreja called Atrica's network management system, Aspen, the "crown jewel" of the Atrica portfolio, adding, "We expect it to be the mainstay network management solution within NSN's portfolio."

The Atrica acquisition signals a shift into a more aggressive M&A posture for the young joint venture. This month, NSN’s new Chief Executive Officer Peter Loescher voiced dissatisfaction with the collaboration. After struggling somewhat in its first full quarter of operations as a joint venture, NSN’s revenue grew 7% in the third quarter to 3.7 billion euros ($5.3 billion), representing nearly a third of Nokia’s overall revenue. But it also reported an operating loss of 120 million euros ($172 million).