SnL_ayaz_/was_here » ERIC

Ericsson to acquire majority of Nortel’s North American wireless business

SnL_ayaz_/was_here — Mon, 27 Jul 2009 18:53:27 +0000

Ericsson has today entered into an asset purchase agreement to acquire the parts of the Carrier Networks division of Nortel relating to CDMA and LTE technology in North America. The purchase is structured as an asset sale at a cash purchase price of USD 1.13 b. on a cash and debt free basis. This announcement follows the completion of the auction process initiated by Nortel, and the transaction is subject to court and customary regulatory approvals.

Ericsson acquires an installed base and a healthy business that provides major operators CDMA technology and support services. In addition, the acquisition strengthens Ericsson’s ability to serve North America’s leading wireless operators in the evolution to LTE. The acquisition significantly expands Ericsson’s footprint in North America, particularly as this region is emerging as an early adopter of LTE technology. The acquisition also provides Nortel’s customers with a strong and reliable supplier for the future, many of which have expressed support for this acquisition.

“Acquiring Nortel’s North American CDMA business allows us to serve this important region better as we build relationships for the future migration to LTE. Furthermore, by adding some 2,500 highly skilled employees, of which about 400 are focused on LTE research and development, Ericsson reinforces and expands a long-term commitment to North America. This deal, along with our recently announced Sprint service agreement, truly positions Ericsson as a leading telecoms supplier in North America,” said Carl-Henric Svanberg, President and CEO of Ericsson.

The agreement includes important CDMA contracts with North American operators such as Verizon, Sprint, U.S. Cellular, Bell Canada and Leap, as well as LTE assets, certain patents and patent licenses relating to CDMA and LTE. Nortel’s customers will also benefit from the continued support of Nortel’s installed CDMA base and the migration path to LTE.

Nortel’s North American CDMA operations generated approximately USD 2.0 b. in 2008, with robust profitability from a good product mix, which includes a significant amount of services. Going forward, research and development costs are expected to be relatively low in CDMA compared with other technologies.

Ericsson’s North American business generated SEK 17.9 (USD 2.7) b. of sales in 2008, mainly from GSM and WCDMA equipment and associated services. When coupled with the recently announced Sprint services agreement, this acquisition makes North America the largest region within Ericsson and encompasses some 14,000 employees.

The robust financial profile of the acquired operations will contribute significant top- and bottom-line additions to Ericsson. The transaction is expected to have a positive effect on Ericsson’s earnings within a year after closing. Magnus Mandersson, presently head of Ericsson Northern Europe, is appointed President of Ericsson CDMA operations, and Richard Lowe, Nortel, is appointed Chief Operating Officer.

“Our two companies share a long-standing commitment to technological excellence and innovation, and we look forward to welcoming the Nortel employees into Ericsson. We are truly impressed with their continuing outstanding performance during these challenging times,” said Magnus Mandersson, President of Ericsson CDMA operations.

“The agreement with Ericsson provides a strong and stable future for Nortel’s CDMA and LTE business. Customers will enjoy continued strong support from an industry leader as they look to evolve to LTE. Many employees will also have the opportunity to continue their work with Ericsson, bringing their innovation power and creativity to the wireless industry for years to come,” said Richard Lowe, President of Carrier Networks at Nortel.

Consummation of the transaction is subject to approval by the United States and Canadian Bankruptcy Courts and the satisfaction of regulatory and other conditions.

SEB Enskilda is acting as Ericsson’s sole financial advisor in the transaction.

ST-Ericsson reports second quarter 2009 financial results

SnL_ayaz_/was_here — Thu, 23 Jul 2009 14:59:19 +0000

Net sales $666 million; 18.5% sequential increase
Adjusted operating loss $165 million
Strong momentum in China with leading customers
New organization announced to accelerate execution of new product strategy

ST-Ericsson, a joint venture of STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reported financial results for the second quarter 2009.

President and CEO, Alain Dutheil, commented: “During the second quarter our sales performed above normal seasonal patterns. This was due to the destocking phase in the channels being over, to the pick-up of demand in China, and to our steady execution on our commitments towards our customers.

We have kept a strong focus on our restructuring and realignment plans. The $250 million cost synergies program, defined by ST-NXP Wireless in the third quarter 2008, is expected to be completed by year-end according to schedule. The new restructuring plan of $230 million cost synergies, announced at the end of April, has been initiated and is expected to be completed by the second quarter 2010.

Today we have also announced our new organization, aligned to our product strategy, to further strengthen our technological leadership and complete the integration.”

Financial results based on US GAAP

Net sales in the second quarter were higher than normal seasonal patterns and showed a progress of 18.5% compared to first quarter 2009 pro-forma sales. This was mainly due to the higher demand in China – driven by TD-SCDMA- and in the rest of Asia-Pacific and to the alignment of inventory to demand levels across the handset supply chain.

The $165 million operating loss, excluding amortization of acquisition-related intangibles and restructuring charges, compares to a $149 million operating loss in the first quarter 2009 pro-forma and it includes approximately $20 million of non-recurring items linked to the start-up of the company.

Inventory declined sequentially by $109 million reaching $325 million at the end of the second quarter 2009, reflecting a tight control of the supply chain.

Net cash was $326 million at the end of second quarter 2009.

Update on restructuring plans

The $250 million cost synergies program defined by ST-NXP Wireless in the third quarter 2008 is in line with plans. The program envisaged a workforce reduction of 500 worldwide.

The $230 million restructuring plan announced on April 29 has been initiated. The associated restructuring charges were $35 million for the second quarter 2009. The plan envisages a reduction in workforce of 1,200 worldwide, upon completion of negotiations and consultations with Work Councils and employee representatives that have already started in all affected sites and organizations.

Market evolution

“While more normal seasonal market trends are likely to be confirmed in the next quarter, primarily driven by Asia, including China, the business environment remains uncertain in the medium term,” said Alain Dutheil. “We will continue to drive the execution of our realignment and restructuring plans with a strong focus on providing our customers with solutions spanning across all existing and next-generation access technologies.”

Q2 2009 highlights – products, technology and wins

In May, ST-Ericsson announced a strategic partnership with China Mobile to drive development of both high-end and low-cost handsets, based on 3G standard TD-SCDMA. Within this agreement, ST-Ericsson will also support four of its customers to commercialize their mobile phones during 2009-2010.

In June, the company strengthened its partnership with Samsung by providing an innovative platform for its first high-end TD-SCDMA/EDGE device for China’s mobile broadband market.

The company also announced mass production of its highly integrated RF transceiver solution to reduce cost and system footprint in 3G handsets. ST-Ericsson’s Aero4228 solution eliminates the need for expensive external filter components typically required to complete today’s mobile handset designs.

Ericsson wins Telefónica O2 UK deal for managed services

SnL_ayaz_/was_here — Thu, 16 Jul 2009 22:39:10 +0000

Ericsson (NASDAQ: ERIC) and Telefónica O2 UK have signed a multi-year managed services agreement. Ericsson will provide field maintenance and other services for the Telefónica O2 UK 2G and 3G networks.

Under the new agreement Ericsson will provide field maintenance services for radio and switch sites, spare parts management logistics support as well as optimisation and drive services and facilities engineering services for Telefónica O2 UK.

Ericsson and Telefónica O2 UK have a multi-year relationship for supply of mobile core network technology. This new agreement marks the first time that Ericsson will undertake day-to-day operations for Telefónica O2 UK. In addition to the new agreement with Telefónica O2 UK, Ericsson has a global relationship with Telefónica in multiple countries.

Mats Granryd, Managing Director, Ericsson UK, says: “We view this as an excellent step in the development of a long-term strategic partnership with Telefónica O2 UK and we are extremely honored to have been chosen by Telefónica O2 UK as its Managed Services partner. Although Ericsson and Telefónica O2 UK have enjoyed a long relationship this agreement has significantly strengthened it, bringing us much closer.”

Through economies of scale, best practice tools, methods, processes and efficient resource allocation, Ericsson’s managed services supports its partners to improve network performance and end-user experience whilst reducing operational costs. With 15 years experience, Ericsson is the global managed services market leader. In the UK, Ericsson holds multiple managed services contracts with fixed and mobile operators.

Ericsson to invest US$1.5B in South Korea

SnL_ayaz_/was_here — Sun, 12 Jul 2009 19:49:25 +0000

Ericcson, the global ICT group based in Sweden will invest a total of US$1.5 billion to Korea for the joint development in green technology area for the next five years. Hans Vestberg, the chairman of Ericcson revealed this plan to President Lee Myung-bak who is currently on state visit to Sweden on Sunday, July 12.

Vestberg, in his meeting with President Lee explained that his company will open a R&D Center in Korea for joint research with local companies, using Korea as the test-bed in fields of green technology and 4th generation IT technology. The company would also increase the number of employees in Korean branch from current 80 to some 1,000.

The cooperation between Ericsson and Korean companies is likely to further upgrade the broadcasting network of the country and help advance to the world market. The mutual cooperation between Wibro technology headed by Korea and Long Term Evolution Technology (LTE) headed by Ericcson, especially is likely to make the two sides lead the 4th generation (4G) IT market which is only in its birth stage.

The prospect is expected to attract the participation of some of the high-ranking businesses in Korea including Samsung and LG Electronics.

The President Lee, openly welcoming the large scale investment, expressed his wish to see Ericcson’s active cooperation with not only big companies but also with mid and small companies that have potential. Lee stressed that he would make all efforts to realize fair competition between local and overseas companies in Korea.

Prior to his meeting with Lee, Vestberg also met with Choi See-joong the chairman of the Korea Communications Committee whose trip to Sweden coincided with the president. Choi also looked around Kista Science Park known as the Silicon Valley of Europe.

Vestberg lauded Korea for being one of the most wired nations in the world and for its pursue of low carbon green growth policy, thus forming an excellent test-bed for information technology.

After the talks Ericcson and KT (Korea Telecom) signed a Memorandum of Understanding (MOU) with Choi and Sweden’s Vice Minister of Trade Gunnar Wieslander watching. The MOU of the two sides stipulates joint development of green mobile technology, joint establishment and operation of domestic pilot-network to assure quality and improvement and mutual cooperation to advance into the world market.

The latest momentum is also likely to help with other foreign investments in Korea.

Ericsson and Telecom Italia trial innovative solar site solution

SnL_ayaz_/was_here — Fri, 10 Jul 2009 20:30:36 +0000

With this trial, Ericsson and Telecom Italia are at the forefront of solar-powered site development, proving that alternative energy sources represent a viable business case for both emerging and developed markets. The Eco-Smart solution, based on flexible solar panels, can generate up to 100 percent of the energy required to power a site in the same land space as a traditional site.

Environmental issues are high on Ericsson’s agenda and this trial aims to prove that solar solutions represent a sustainable business case for operators in developed countries. As energy costs can account for up to 50 percent of a site’s operating expenses, the Eco-Smart solution can help operators make significant cost savings while reducing CO2 emissions.

The trial is being carried out in the Italian city of L’Aquila, where G8 leaders are meeting this week to discuss, among other topics, the challenges posed by climate change ahead of December’s United Nations conference on climate in Copenhagen.

Stefano Pileri, Head of Technology & Operations at Telecom Italia, says: “With this trial Telecom Italia reaffirms its commitment to technological innovation that will benefit the whole country, as well as to cost-cutting solutions. Using Eco-Smart also confirms our concern for environmental sustainability, one of the main drivers of our development policies.”

Cesare Avenia, President of Ericsson Italy says that Ericsson is at the forefront of energy-efficient solutions development. “The Eco-Smart represents everything telecommunications and Ericsson stand for – using innovative solutions to improve lives. The solution also confirms Ericsson’s leading position as an integrator, as it can be used with any technology, 2G, 3G or LTE, and in multi-vendor environments.”

The result of an agreement signed between Ericsson and Telecom Italia in 2008 to jointly develop sustainable solutions, the Eco-Smart confirms both companies’ commitment to a more innovative and eco-sustainable society.

The Eco-Smart solution features an elliptical support structure coated with flexible solar panels wrapping up the antenna.

The innovative structure, completely designed in Italy, can be easily adapted to all radio base stations shapes and provide operators with significant advantages in terms of operational expenses with an expectation of medium-term amortization, with a very low environmental impact.

Ericsson signs USD 1.7 billion framework agreements with Chinese operators

SnL_ayaz_/was_here — Wed, 08 Jul 2009 15:23:33 +0000

Ericsson today signed framework agreements on 2G/3G mobile communication equipment and related services for 2009 with two major Chinese telecom operators: China Mobile and China Unicom, valued at USD 1 billion and USD 0.7 billion respectively.

China Mobile and China Unicom have received 3G licenses of TD-SCDMA and WCDMA standards respectively at the beginning of 2009. Together the two operators are currently serving more than 620 million mobile subscribers in China. The newly signed 2009 framework agreements will allow both operators to further improve the capacity and performance of their 2G networks and accelerate the initial build-up of their 3G networks, and consequently ensure richer and more innovative mobile communication services to hundreds of millions of Chinese consumers as 3G takes off in China.

Under the framework agreement signed between Ericsson and China Mobile, Ericsson continues to deliver green solutions to support China Mobile’s network energy optimization and CO2 emission reduction target. Ericsson will also expand GSM/GPRS network coverage and capacity in 18 provinces in China with related services. In addition, Ericsson also supports China Mobile’s 3G network build-out by providing a wide range of innovative TD-SCDMA products and solutions.

Under the framework agreement signed between Ericsson and China Unicom, Ericsson will not only become the main supplier to upgrade China Unicom’s GSM networks in 10 provinces, but also provide the operator with GSM/WCDMA core network and/or wireless access system in 15 provinces, including transmission, IP and value-added service platform. Ericsson’s strong local support team with global experience plays a key role in supporting China Unicom in launching the world’s largest WCDMA commercial networks.

Mats H Olsson, President of Ericsson Greater China, says, “China’s 3G market is growing rapidly and the world is watching closely. As the world’s undisputed leader of mobile communications technology, Ericsson will spare no efforts in supporting the development of China’s telecom industry with our global expertise and technology leadership.”

“Ericsson has been devoted to supporting the development of China’s telecom industry. The signing of the 2009 framework agreements today further enhances the position of Ericsson as the leading mobile communications supplier in China market. Ericsson will work together with China’s operators to ensure rewarding new user experience for Chinese consumers in the 3G era and we are fully confident that we can achieve this objective,” says Olsson.

Ericsson provides fixed-broadband access to all 3 operators in China

SnL_ayaz_/was_here — Fri, 03 Jul 2009 19:02:29 +0000

Ericsson (NASDAQ: ERIC) has been awarded contracts with the three telecom operators in China to provide fixed broadband access. Millions of people in an initial nine Chinese provinces will now be able to enjoy high-definition TV, as well as high-speed broadband and quality voice services.

China Mobile, China Unicom and China Telecom are upgrading their networks with the latest available technology to provide the enhanced services to subscribers in Anhui, Guangdong, Hebei, Heilongjiang, Hubei, Liaoning, Shandong, Shanghai and Sichuan provinces to enjoy services such as quality voice, high-speed broadband and high-definition IPTV.

For these projects, Ericsson is to roll out what are known as FTTH networks for all three operators, using state-of-the-art broadband fiber-access technology (GPON or Gigabit Passive Optical Network), and its patented air-blown fiber solution. Ericsson will also provide a range of professional services including competence development, network design and optimization, support services and consultancy.

Mats H Olsson, President of Ericsson Greater China, says: “It is exciting to see all three Chinese telecom operators deploying fiber networks across the country to deliver data-thirsty, high-quality services. These initial rollouts in China, as well as the endorsements from around the world, have demonstrated yet again that cost-effective optical fiber solutions are becoming the leading technology for fixed deployment.”

Ericsson is the leading supplier of GPON systems across the globe. Over the years, Ericsson has been one of the top contributors to numerous industry standardization organizations, including the Full Service Access Network (FSAN) and Broadband Forum. An FSAN-driven roadmap and industry standards ensure the complete Optical Line Terminal /Optical Network Terminal interoperability of Ericsson’s GPON solution.

Ericsson acquires more than 95 percent of LHS shares

SnL_ayaz_/was_here — Fri, 03 Jul 2009 17:52:25 +0000

Ericsson (NASDAQ:ERIC) has recently, through a wholly owned subsidiary, purchased shares in LHS AG (XETRA:LHS) that together with currently held shares represents more than 95 percent of the outstanding shares in LHS.

Today, Ericsson informed LHS that it requests a squeeze-out resolution to be passed at LHS’ next shareholders’ meeting. The date for the next shareholders’ meeting has not yet been set.

Back in 2007, Ericsson announced a cash offer to acquire LHS, aimed at strengthening its leading offering in revenue management with a fully integrated convergent charging and billing solution.

SnL_ayaz_/was_here » ERIC

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