Oracle buys Tekelec to up competition against Ericsson and Huawei

Telecom Lead America: Oracle is set to buy Tekelec, a provider of network signaling, policy control, and subscriber data management solutions.

Oracle is targeting to enhance its presence in the communications software market. Telecom operators such as Bharti Airtel, T-Mobiles, etc. are some of the Tekelec customers.

The # 3 software maker will be in a position to increase its competition against Ericsson and Huawei in the telecom software market by buying Tekelec.

Analysts suggest that the price will be higher than the $780 million a consortium recently paid for the company.

Tekelec’s software, used by over 300 carriers, complements Oracle’s communications software and Acme Packet’s — which was acquired by Oracle recently — VoIP infrastructure hardware/software, and addresses the need for advanced policy management tools.

Oracle CEO Larry Ellison, who was under fire for clocking weak quarterly financial results last week, recently suggested more telecom acquisitions are on the way.

READ What’s happening to Oracle’s software business thanks to rivalry from small companies HERE

“As connected devices and applications become ubiquitous, intelligent network and service control technologies are required to enable service providers to efficiently deploy all-IP networks, and deliver and monetize innovative communication services,” said Bhaskar Gorti, senior vice president and general manager, Oracle Communications.

READ Oracle’s recent acquisitions HERE

Ron de Lange, president and CEO, Tekelec, said: “Together with Oracle, we expect to accelerate the pace of service innovation by helping service providers transform the way they manage and monetize the explosive growth in signaling and data traffic on their networks.”

Tekelec claims that it leads all independent policy management (PCRF) vendors through the first three quarters of 2012. Tekelec exceeded the nearest independent vendor’s revenues by nearly 60 percent.

However, in the third quarter of 2012, Ericsson took the top spot for PCRF market revenues, followed by Tekelec, Huawei, and Openet. According to the report, the introduction and growth of  voice-over-LTE, which is latency sensitive, will reinforce the continued advance of the PCRF market. The PCRF market is forecast to grow on average more than 30 percent annually in each of the next five years, according to Exact Ventures.

In 2012, Tekelec won 12 new policy customers. Tekelec policy solutions now serve more than 60 service providers, including more than 50 Tier 1 providers, in 35 countries. The company also has five Tier 1 LTE policy customers in five countries.

According Exact Ventures’ research, Tekelec has around 75 percent to 85 percent share in the Diameter Signaling Controller (DSC) market. Tekelec has more than 25 DSR customers.

Acme Packet, Huawei, and F5 Networks are the other leading players in the DSC market that grew more than 10-fold in 2012 versus 2011. In future competition in the DSC market will likely intensify as volumes continue to ramp and new vendors enter the market.

The proliferation of smart devices, mobile applications, and connected services has led to an exponential increase in network signaling and data traffic.

Tekelec’s technology enables service providers to deliver, control and monetize innovative and personalized communications services and is utilized by more than 300 service providers in over 100 countries.

Tekelec’s network signaling (Diameter and SS7), policy control and subscriber data management solutions complement Oracle Communications’ mission-critical operational support systems, service delivery platforms, and business support systems, and are expected to help service providers efficiently allocate and monetize network resources.

Recently, Houck Reed, vice president of product management and marketing at Tekelec, said: “The Diameter Signaling Router and Policy Server are a powerful and unique one-two punch for LTE and 3G mobile data networks. The importance of policy and partnerships with over-the-top application providers and mobile advertisers guarantee an increase in Diameter signaling as operators seek new mobile data revenues.”

By combining Tekelec with capabilities from Oracle Communications and Acme Packet, Oracle expects to provide complete communications offering to telecom service providers.

The Tekelec management team and employees are expected to join the Oracle Communications Global Business Unit and continue their focus on delivering excellence to service providers after the transaction closes.

Baburajan K
[email protected]