Ruckus Wireless Inc., a maker of wireless-networking equipment, is working with Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS) ahead of a possible initial public offering, said a person with knowledge of the matter.
The offering will probably occur this year, said the person, who asked not to be named because the plans aren’t public. Ruckus Chief Executive Officer Selina Lo, when asked about the potential share sale, said the company is exploring options and is in talks with bankers about a possible IPO. She declined to elaborate on plans to choose underwriters.
“We would like to try to go this year,” she said in a phone interview. Pen Pendleton, a spokesman for Morgan Stanley, declined to comment, as did Goldman Sachs’s Michael DuVally.
The Sunnyvale, California-based company is a leader in the market for gear that lets phone companies shunt data traffic from overcrowded cellular networks onto higher-capacity Wi-Fi networks. Carriers are using Ruckus’s small networking devices that can be placed on telephone poles, street lights or roofs to relieve networks swamped by data traffic from smartphones.
Ruckus had sales of $120 million in 2011, up 50 percent from the previous year, the company said. This year, Ruckus has signed deals with Time Warner Cable Inc., Telekom Malaysia Bhd. and Axtel SAB, Lo said. The company plans to announce a partnership at the International CTIA Wireless show in New Orleans on May 7 with equipment maker Nokia Siemens Networks Oy, which will resell Ruckus’s gear as part of network deployments, she said.
“A lot of service providers weren’t really spending much time with us last year, but now they all have requests for proposals to do large Wi-Fi projects,” Lo said.
In London, Lo said she saw Ruckus’s newest products on a lamppost on Exhibition Road, as part of plans by Telefonica SA’s O2 network to offer high-speed wireless service during the 2012 Olympics.
Mike Roudi, senior vice president of mobile services at Time Warner Cable, said the company will use Ruckus gear as part of a plan to build 10,000 Wi-Fi hot spots around Los Angeles, including an 11-mile stretch of beaches.
“The team at Ruckus has built a really good mousetrap,” Roudi said. He cited Ruckus’s antenna design, which helps maintain a clear signal among competing Wi-Fi networks.
When Lo founded Ruckus in 2004, most phone carriers saw Wi- Fi as a threat to revenue, because it had the potential to curb customers’ need to use cellular networks for mobile computing. While they spent billions to license cellular spectrum from the U.S. government, Wi-Fi spectrum was unlicensed and could be used for free.
When the rise of Apple Inc.’s iPhone and other smartphones sent data traffic soaring, carriers struggled to maintain service levels without additional spectrum. Since then, carriers including AT&T Inc. (T) and Verizon Wireless have taken steps to build up their Wi-Fi networks, including in high-traffic areas such as sports stadiums, McDonald’s Corp. restaurants and Starbucks Corp. coffee shops.
Now, carriers are beginning to adopt a generation of devices that include both Wi-Fi and cellular technology, said Infonetics Research co-founder Michael Howard. The goal is for the network to automatically shift as much traffic as possible to Wi-Fi, which usually provides a better signal in crowded urban areas and doesn’t come with per-minute charges.
“We’ve been talking about carrier Wi-Fi since 2008,” Lo said. “We identified this market, and developed it. We’re quite proud.”
Before starting Ruckus, Lo was vice president of marketing at Alteon WebSystems, where she oversaw an IPO and then a sale of the company to Nortel Networks Corp. for $7.8 billion in 2000.
At first, Ruckus focused on making technology to improve Wi-Fi coverage inside consumers’ homes. Then it shifted to helping companies improve their Wi-Fi networks.
“It’s been a long haul for Ruckus, but this is going to be Selina’s biggest hit,” said Infonetics’ Howard.
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