Lucent buys Switchmaker, Cisco buys Net Technology

Rival networking giants Lucent Technologies and Cisco Systems both continued on their growth-through-acquisition paths yesterday, with Lucent announcing that it has agreed to pick up Excel Switching, and Cisco disclosing plans to buy Internet technology developer MaxComm Technologies.

In its acquisition of Massachusetts-based Excel Switching, valued at around $US1.7 billion, Lucent obtains programmable switches, which serve as bridges between circuit and packet networks.

The Excel switches, the functionality of which is controlled by software, enable service providers to get to the market faster with new voice and Internet applications such as unified messaging, Lucent officials said. The company expects nearly 1000 new service providers to enter the telecommunications market over the next few years, resulting in an annual growth of 20 per cent in the demand for programmable switches.

Excel Switching in Hyannis as of yesterday had 4300 systems installed in 70 countries. The company, founded in 1988, currently has about 460 employees. The acquisition is subject to the approval of Excel's shareholders.

Meanwhile, Cisco, based in San Jose, California, said it plans to pay $US143 million in common stock for one-year-old MaxComm Technologies Inc, a developer of broadband internet technology that brings multiple voice and data lines into homes. Privately held MaxComm, in Chelmsford, Massachusetts, currently employs 35.

The MaxComm technology will enable service providers to offer additional voice lines and high-speed internet access without installing new wiring in subscribers' homes, Cisco officials said.

MaxComm's hardware and software uses broadband access technologies such as ADSL (Asymmetric Digital Subscriber Line) and cable to connect residential customers to public networks.

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