November 15, 2012, 9:28 PM — The initial public offering of Ruckus Wireless, set for Friday, will highlight the growing importance of Wi-Fi in mobile networks as service providers try to meet the demands of smartphone and tablet users.
Ruckus, a maker of Wi-Fi network gear based in Sunnyvale, California, focuses on products for carrier-owned networks in public places as well as for enterprises. Though it is dwarfed by its main competitors, Ericsson and Cisco Systems, Ruckus is riding a wave of growth in Wi-Fi for the kinds of mobile services that used to be solely the province of cellular networks, industry analysts say.
Ruckus began operations in 2004 and has about 600 employees, giving it just a fraction of the overall size and experience of rivals Ericsson and Cisco. But in a filing on its planned IPO to the Securities and Exchange Commission, Ruckus said its revenue in the first nine months of this year was 93 percent higher than in 2011's first nine months, reaching $152.5 million. The company said its profit also grew.
In its filing earlier this month, Ruckus said 8.4 million shares would be offered at a range of $13-$15 per share. Sources close to the company said late Thursday that the shares would be priced at the high end of that range. At that price, the sale could realize about $126 million. Ruckus will be listed on the New York Stock Exchange under the ticker symbol RKUS.
Cellular carriers rely mostly on their own licensed frequencies to carry their subscribers' data traffic. But despite the growing efficiency of mobile technologies such as LTE, the service providers foresee such heavy use of mobile data in the coming years that they think their networks may run out of capacity to carry it all. Older 3G networks have already given subscribers maddeningly slow performance in some areas when bandwidth-hungry new devices such as the iPhone became suddenly popular.
Wi-Fi is available to any service provider that wants to supplement its own spectrum, because it's built into almost all mobile devices and runs on frequencies no one owns. Wireless analyst Craig Mathias of Farpoint Research estimates there is about 800MHz of Wi-Fi spectrum available around the world, compared with 20MHz in a typical pair of cellular bands used by a carrier.
Mobile operators such as AT&T have made big investments in Wi-Fi and are likely to turn to it even more with the emergence of standards that let service providers shift their users from cellular to Wi-Fi networks invisibly, Mathias said.
