Birdstep sells assets to key WiFi offload competitor

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Birdstep Technology has announced it will be selling off its software development and marketing arm to one of its competitors in the WiFi offload arena, Smith Micro Software, for $2m.

Sweden-based Birdstep is best known for its always best connected technology, an important area of activity as operators increasingly rely on steering users between WiFi and cellular seamlessly. This capability can be enabled in various ways, but is increasingly strategic for MNOs – for offloading traffic to reduce overall data costs and control customers’ quality of experience – and for non-mobile operators, which may pursue WiFi-first policies.

Birdstep bases its solutions on an implementation of the ANDSF (Access Network Discovery and Selection Function) standard, a method for dynamically selecting the right network, at the right time, based on network conditions and a centralized MNO policy. Its technology can switch devices between 2G, 3G and 4G, as well as different types of WiFi. Smith Micro’s NetWise product works similarly to this, using policy-based algorithms to redirect mobile traffic at the device level when the network is congested.

As part of the agreement, the rump of Birdstep will be given permission to distribute Smith Micro’s products, including those acquired from Birdstep itself, in the Nordics, in collaboration with Teki Solutions. Birdstep and Teki Solutions will evenly split the proceeds from this arrangement. The acquisition is subject to approval of Birdstep shareholders, and is expected to close on April 1.

The company has found itself in a difficult situation after losing its contract with Sprint, which accounted for 87% of its 2015 revenue, in November. It said that, following that blow, its financial situation had become “critical”, and by selling off its software development and marketing business this guarantees a future for its technology and for its employees.

“Birdstep has been our primary competitor in policy-driven solutions designed to optimize the utilization of wireless networks,” said William Smith, CEO of Smith Micro Software. “Birdstep has a presence in APAC and EMEA that will enable us to re-emerge and expand our customer base in these markets. Operators and OEMs that use Birdstep solutions will benefit from a stronger combined portfolio and roadmap, and the confidence of gaining a partner with decades of experience and innovation in wireless software.”

For video optimization, Birdstep offers a smart analytics packages to mobile and fixed broadband operators combining data from the device and from wireless domains – both WiFi and cellular. Here data can be collected about what the user is watching, what the network is and how well the video is being displayed. Operators can observe what impact an app is having on battery life of a device and then take the relevant action to improve that, for example, by implementing intelligent WiFi power management.

Also this week, Birdstep signed a letter of intent with holding and investment firm Middelborg, to investigate a potential merger with an unnamed subsidiary of the latter firm. This is expected to complete during the second quarter.

In January 2015, Birdstep sold its Finland-based subsidiary, Birdstep Technology Oy (Secure Mobility), to Elektrobit Technologies so that it could intensify its focus on Smart Mobile Data. This sale was intended to allow Birdstep to concentrate on growth by expanding geographically, developing its product portfolio and strengthening its position in high growth markets.

Ian Jenks, Chairman of the board of Birdstep, stated: “We are very satisfied that we, as part of the deal with Smith Micro, has managed to create a strong industrial partnership that could create value for Birdstep’s shareholders going forward. Teki Solutions has a number of high quality customer and supplier relationships where Birdstep’s and Smith Micro’s technology has an interesting potential.”

Birdstep had sales of around $6.8m in 2015, and Smith Micro saw sales of $39.5m, up 7% from the previous year.

This article was taken from our weekly wireless watch service. To learn more.

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Caroline has been analyzing and reporting in the hi-tech industries since 1986 and has a huge wealth of experience of technology trends and how they impact on business models. She started her career as a journalist, specializing in enterprise and carrier networks and in silicon technologies. She spent much of her journalistic career at VNU Business Publishing, then Europe’s largest producer of technology publications and information services . She was publishing director for the launch of VNU’s pan-European online content services, and then European editorial director. She then made the move from publishing into technology market analysis and consulting, and in 2002 co-founded Rethink Technology Research with Peter White. Rethink specializes in trends and business models for wireless, converged and quad play operators round the world and the technologies that support them. Caroline’s role is to head up the wireless side of the business, leading the creation of research, newsletters and consulting services focused on mobile platforms and operator models. In this role, she has become a highly recognized authority on 4G systems such as LTE and WiMAX, and a prolific speaker at industry events. Consulting and research clients come from major mobile operators, the wireless supply chain and financial institutions.

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