NEC beefs up 5G portfolio with U.S.-based Blue Danube acquisition

Japan’s NEC is looking to enhance its open RAN and 5G ambitions by acquiring privately-held Blue Danube Systems, a U.S.-based provider of massive MIMO beamforming tech and software.

NEC expects the deal, announced Friday, to close around March 2022. Financial terms were not disclosed.  

Santa Clara, California-based Blue Danube touts patented Coherent Massive MIMO beamforming technology it says delivers up to a 3X capacity boost, which has been demonstrated in several trials around the world. It works in combination with autonomous AI/machine learning beam optimization software to improve overall multi-site performance in both FDD and TDD bands.

RELATED: NEC, with big open RAN ambitions, helps NTT Docomo trial 5G SA

The company’s products have been used commercially for over five years and support 4G and 5G baseband processing. In addition to capacity, it promises improved coverage in a range of deployment scenarios.

"Blue Danube's 5G products complement our Open 5G solutions portfolio, enabling us to meet growing market demands and accommodate diversified use cases," said Shigeru Okuya, SVP at NEC, in a press release. "This acquisition is a great opportunity for us to expand our 5G offerings and will bring substantial value to our customers. NEC has committed to a leadership position in Open RAN network development and this move extends our physical reach and innovation roadmap to deliver on that commitment."

In announcing the deal, NEC said Blue Danube will expand customer support capability in North America and its beamforming technologies will enhance NEC’s 4G and 5G radio units based on O-RAN specifications. Blue Danube will also bolster NEC’s RAN software assets to address operator needs related to spectrum efficiency, RAN optimization and reducing network operating expenditures.

Investors in Blue Danube include Sequoia Capital, Northgate, AT&T, and Silver Lake. Its advisory board includes former executives from Verizon and Qualcomm.

Blue Danube completed the first commercial trials of its massive MIMO technology with AT&T back in 2017 in FDD LTE spectrum.

RELATED: Qualcomm, NEC team up on open vRAN units

“Becoming part of NEC enables Blue Danube to expand our 5G product offerings, and together we will bring ever more powerful hardware and software products based on O-RAN specifications to customers worldwide,” said Mark Pinto, CEO of Blue Danube in a statement.

NEC for its part has been making a bigger push in the open RAN and 5G space, counting Japan operators Rakuten Mobile and NTT Docomo among partners. Rakuten itself acquired the remaining stake of U.S.-based open RAN vendor Altiostar last summer.

In Europe, NEC is leading integration and validation, as well as providing open 5G massive MIMO radio units, for open RAN pilots with Telefónica. And last year Vodafone named NEC as a vendor for its large-scale open RAN deployment in the U.K. It's also collaborated with Qualcomm to build 5G open virtualized distributed units (vDU).  

And recent preliminary findings from Dell’Oro Group suggest open RAN is doing well even in early years as revenues surprised on the upside both in 2020 and 2021, with the Asia Pacific region dominating the open RAN market in its initial phase. Dell’Oro expects the region to account for more than 40% of total 2021-2026 open RAN revenues.

RELATED: Open RAN revenue looks better than ever: Dell’Oro

As NEC competes in the infrastructure space, Patrick Lopez, global VP of product management for 5G, told Fierce in December that the vendor likes to think it has the best of both worlds – bringing greater scale and capacity than emerging open RAN vendors but without the weight of legacy product investments from traditional vendors like Huawei, Ericsson and Nokia.

“We’re a large telecom equipment manufacturer at scale. At the same time, we’re radically open, which allows for much more rapid pace of innovation. If you look at open RAN, we are still the only vendor in the world with a massive MIMO product deployed commercially at scale that is open RAN in an urban environment,” Lopez said.