Cisco to acquire Telesend Inc - sources
Reuters Story - March 25, 1997 17:49
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NEW YORK, March 25 (Reuter) - Cisco Systems Inc is set to
announce the acquisition of Telesend Inc, a developer of
low-cost digital subscriber line technology used in high-speed
data communications, sources familiar with the deal said.
Cisco agreed to acquire Telesend, a privately-held
Cupertino, Calif.-based firm, in exchange for an unspecified
amount of stock in Cisco, the sources said.
Additional financial terms were not available.
Telesend is the developer of a new technology known as ISDN
DSL, or IDSL for short. The full name is Integrated Services
Digital Network Digital Subscriber Line.
A Cisco spokesman had no comment on the acquisition other
than to say, "Most of our acquisitions are of small,
privately-held firms."
The spokesman, Adam Stein, said Cisco has made 14 mainly
technology-oriented acquisitions in the last three-and-a-half
years.
Officials of Telesend were not available to comment, but an
automated voicemail system answering calls at Telesend's
offices in Cupertino transferred callers directly to a Cisco
switchboard operator.
Cisco is headquartered in nearby San Jose.
Telesend's IDSL is a local-loop modem technology that
allows phone companies to offer Internet access connections
from central office switches to local customers at speeds of up
to 128,000 bits per second.
That's about four times the speed of standard phone lines.
IDSL is a low-cost alternative to other Digital Subscriber
Line (DSL) technologies such as ADSL, or Asynchronous DSL,
Kieran Taylor, an analyst at market research firm TeleChoice
Inc said. Taylor said he was briefed on the acquisition by
Telesend.
ADSL offers data communications links of up to six
megabits, or million bits, per second, far faster than IDSL.
"ISDL is the lowest speed of DSL under development, but
it's also the lowest cost," Taylor said, noting that as such it
gives Cisco a viable transition technology to higher speed ADSL
technology over time.
IDSL is cheaper in part because it relies on semiconductor
circuits used in far more widely available ISDN technology.
The difference between standard ISDN technology and ISDN
DSL technology is that the former is designed to run over voice
networks while IDSL is designed to run on data networks.
He said customers using IDSL might expect to pay anywhere
from $250 to $350 per subscriber line, making it far more
economical than ADSL which runs around $1,200 per line.
The distinction is important because the explosive growth
of Internet has begun to overwhelm the capacity of voice
networks to handle such traffic, creating demand for the IDSL
technology, designed to run on separate data-only networks.
Taylor said buying Telesend is a strategic move by Cisco to
counter IDSL products announced a month and a half ago by rival
equipment maker Ascend Communications Inc .
He said he expected other companies, such as 3Com Corp
to respond in time with similar products.
-- New York newsdesk, 212-859-1736
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