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JDS Uniphase Corp. (JDSU - Analyst Report) recently acquired the U.K-based privately held Arieso, a leading provider of location-based intelligent software for global telecom networks. Arieso’s software helps wireless operators to solve bandwidth related problems for their 2G, 3G and 4G-LTE network even under spectrum constraints. This software locates, stores and analyzes data from customer’s devices and enables wireless operators to deploy small cells strategically to avoid network congestion.

The acquisition of Arieso will significantly enhance JDS Uniphase’s mobility software portfolio. The newly acquired technologies predominantly targeting radio access network (RAN) monitoring and optimization to deliver effective network design and performance. The RAN optimization market size is expected to grow to $1 billion by 2015. Most notably, Arieso has a solid list of clientele that includes several global telecom giants, such as AT&T Inc. (T - Analyst Report), Telefonica S.A. (TEF - Analyst Report) and Vodafone Group plc. (VOD - Analyst Report).

JDS Uniphase paid $85 million in cash for this acquisition. We believe this deal will be incrementally positive for the company from the fourth quarter of fiscal 2013. The company already offers an innovative LTE test solution, which encompasses end-to-end, real-time tracing, data assurance and OSS to derive the performance and revenue potential of LTE network.JDS Uniphase currently has a Zacks Rank #3 (Hold).

The marketfor optical networking and test measurement is emerging rapidly in terms of technological innovation and demand.JDS Uniphase’s newly launched differentiated products have gained solid market traction. In the second quarter of fiscal 2013, the newly launched products accounted for 54% of its total revenue in the core network market. The acquisition of Arieso will further boost the company’s top line. 

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