After weeks of speculation on a possible WiMAX acquisition, Cisco Systems today announced it would buy Navini Networks and its adaptive beamforming technology for $330 million. The decision marks Cisco’s entrance into the burgeoning WiMAX space and comes days after a major International Telecommunication Union decision that broadens WiMAX’s potential global market.

After the deal closes in next year’s second quarter, Cisco will be in a unique position as the largest vendor of consumer and business Wi-Fi equipment with a WiMAX portfolio. Motorola, too, has sought to complement its WiMAX portfolio with Wi-Fi technologies by purchasing Symbol, but Cisco’s scale and scope in the networking business extends far beyond the access point. Cisco is a giant in the networking world, supplying the core equipment that routes packets throughout public and private networks, and WiMAX is the first wireless technology built on a flat IP architecture, emulating today’s data networks. Cisco will likely be very comfortable playing in the WiMAX space.

Several media outlets reported that Cisco was investigating several options for a WiMAX acquisition, including fixed WiMAX pioneer Alvarion and Navini, but recently analysts had settled on Navini as the most likely candidate. Navini is a long-time broadband wireless company that several years ago shifted development from its proprietary CDMA-based nomadic platform to today’s Mobile WiMAX platform. What may have been most attractive to Cisco, however, is the work that Navini has done in adaptive beamforming that steers paired signals to customer premises equipment (CPE) or devices on the network. The intended result is greater capacity on the cell edge, optimal for fixed deployments using stand-alone wireless gateways or PC cards. WiMAX CPE receiving a beamformed signal and redistributing its capacity via Wi-Fi could be the type of architecture Cisco is targeting to fit into its overall end-to-end networking strategy.

“As part of Cisco's normal due diligence in acquiring a company, we carefully evaluated a number of possibilities before selecting Navini Networks,” Cisco senior vice president Tony Bates said in a Q&A posted on Cisco’s Website today. “We believed that Navini Networks best met our key requirements for successful acquisitions. Specifically, the two companies share a common vision, and there is good compatibility of technologies, people and culture.”

Last week, the ITU said it would adopt WiMAX as a 3G technology along with CDMA2000 and UMTS technologies. The decision could open up spectrum around the world for WiMAX usage, creating a much bigger potential business for Cisco and its competitors.