In light of new data caps, Netgear acquires AT&T's DSL equipment provider

Network hardware manufacturer Netgear on Friday announced it will be acquiring all the assets of Westell Technologies' customer broadband networking equipment division for $33.5 million in cash.

Netgear will acquire a "select" team of Westell employees (including the CNS engineering and testing team,) most of its customer base, 19 patents and patent applications, as well as all its products completed or in development.

Westell's customer networking equipment line is made up mostly of products related to DSL, ADSL, and ADSL2+ which are sold to residential telecom service providers such as Verizon, and AT&T.

Late last week, AT&T said it will be implementing a 150GB monthly data cap on its DSL customers (and a 250GB cap on its U-Verse customers) beginning on May second. AT&T said the average DSL customer uses only about 18GB per month, and that only about 2% of its customers would be affected by the cap.

This acquisition strengthens Netgear's relationships with these major residential providers, and opens the door for a wider array of its equipment to be sold.

"We're…excited about the opportunity to open up our entire portfolio of products to the customers we are gaining from the CNS customer base and our ability to leverage CNS' proprietary technology to the rest of our service provider customers worldwide," said Michael Clegg, Senior Vice President and General Manager of Netgear's service provider business unit. "We are delighted to welcome their talented people onto our team and look forward to a brighter future together."  

Westell, on the other hand, is shifting the direction of its business.

"The sale of our CNS business completes a major strategic step for Westell," said Rick Gilbert, Westell's chairman and chief executive officer. "It allows us to focus on our more profitable Outside Plant Systems and Conference Plus divisions. We are extremely proud of the remarkable progress that CNS has made over the last two years, and we are confident that the operation will continue to provide outstanding products and customer service as part of Netgear. At the same time, this is clearly the right thing to do for our shareholders."