BAI on the M&A train, next stop California

BAI Communications has announced the acquisition of Mobilitie, a move that boosts its presence in the US, particularly on the West Coast.

The companies have not disclosed the value of the deal – Mobilitie is privately held, and claims to be the largest private infrastructure provider in the US – but we can safely assume it’s not small change.

The deal brings together two sizeable infrastructure companies, big names in the neutral host space, essentially building some scale in the US. Amongst other things, both have a presence in the transport space: BAI provides mobile and WiFi connectivity in the New York subway, via its Transit Wireless unit, while Mobilitie has public transit system deals in the San Francisco Bay Area and Seattle.

As the companies themselves put it, the deal marries Mobilitie’s outdoor and indoor 5G infrastructure operations, small cell capabilities, and its US transit systems with BAI’s expertise in delivering communications infrastructure in dense urban and transit environments. On that last point, BAI is the company responsible for rolling out a 4G mobile network on the London Underground, but by the time that is fully up and running it’s unlikely to be anything to boast about.  Transport for London’s lack of progress on that front isn’t really something to criticise BAI for though. The firm also provides neutral host infrastructure in the Toronto and Hong Kong subways.

“BAI’s acquisition of Mobilitie establishes us as a leading telecommunications infrastructure provider in the United States and the most relevant provider of public transit wireless connectivity solutions in North America,” said Igor Leprince, Group CEO of BAI Communications – and former Nokia exec – in a statement.

“This reflects our ambitions for the US as well as the other markets in which we operate globally and puts us in the perfect position to capitalise on the growing prioritisation of connected infrastructure in regions such as the UK and Europe,” Leprince said. “The scale and strong relationships with large venue operators and mobile network operators that Mobilitie brings fits perfectly with BAI’s existing leadership in connected transit and infrastructure.”

Specifically, in addition to its public transport contracts, Mobilitie will bring a portfolio of 220 venues across 39 US states; 10,000 small cells in 45 states, and 300 tower sites in 14 states.

Presuming the deal goes ahead, that is. The companies expect it to close in the third quarter of this year, but it will require the usual regulatory approvals first.

The deal clearly makes a lot of sense for both companies giving them additional scale and bringing together some fairly complementary footprints in the US. But it also serves to illustrate the changing shape of the wireless infrastructure market both in the US and further afield.

“BAI’s significance as a 5G player, together with Mobilitie, will enable unprecedented support of US wireless carriers. It puts us on a clear, long-term path to greatly accelerate business and help our customers, especially the mobile network operators,” said Gary Jabara, Founder and Chairman of Mobilitie.

Those US mobile operators are in the process of spending billions of dollars in their race for coverage; BAI/Mobilitie’s timing couldn’t be much better. Meanwhile, the neutral host model is growing in importance on the global stage too, and a larger-scale operator is better positioned to compete.