(Reuters) - Swedish telecoms gear maker Ericsson is to buy privately-held WiFi technology firm BelAir Networks as part of its plan to boost its mobile broadband offering.

Demand for wireless connectivity has boomed in the last couple of years with the proliferation of mobile devices, such as smartphones and tablets.

BelAir, which produces indoor and outdoor WiFi systems for telecoms operators that allow people to surf the Internet without a physical coupling to a network, has 120 staff.

With this acquisition Ericsson will be able to add the WiFi functionality to its micro base stations at a low incremental cost, making its emerging small-cell cellular infrastructure offerings more appealing, said Pal Zarandy, partner at telecom consultancy Rewheel.

Telecom operators see WiFi hotspots crucial for offloading wireless data traffic, which is expected to grow 26-fold in the next five years, according to Cisco, as usage of video on mobile devices surges.

For example, China Mobile - the world's largest mobile carrier by subscribers - plans to deploy a million hotspots and Japan's second largest mobile carrier KDDI plans to grow its 10,000 Wi-FI hotspots to 100,000 within six months.

Ericsson will lead the way in the growing converged WiFi and cellular market where improved end-user experience is the driving force, Ericsson CEO Hans Vestberg said in a statement.

By integrating BelAir Networks' market-leading products and competence into Ericsson's existing radio portfolio, we will be able to do this more quickly.

Ericsson did not give any financial details of the deal.

BelAir had raised some $43 million of venture funding.