Cisco buys mobile broadband firm

Cisco is banking on the growing popularity of smart phones

The world's largest maker of network equipment, Cisco Systems, has agreed to buy mobile broadband equipment-maker Starent Networks for $2.9bn (£1.8bn).

The price represents a premium of 21% over Monday's closing share price.

Cisco is banking on the growing popularity of smartphones, which need fast internet access.

Starent will form Cisco's new Mobile Internet Technology Group and will continue to be led by its current chief executive, Ashraf Dahod.

'More aggressive'

The deal is expected to be completed in the first half of 2010.

It is Cisco's second major acquisition this month.

On 1 October it agreed to buy the Norwegian video conferencing company Tandberg for $3bn.

At the time, Cisco chief executive John Chambers said the firm would be "more aggressive" over the next 12 months in pursuing other acquisitions.