Cisco-style partnerships will fuel Ericsson's push into new markets, strategy chief says

Ericsson will seek further partnerships like the one it recently struck with Cisco in order to achieve its goal of becoming a leader in non-core markets and offset a likely slowdown in telecoms infrastructure sales, chief strategy officer Rima Qureshi revealed.

The equipment vendor will seek to become a market leader in sectors including cloud computing, IP networks, TV and media markets, OSS and BSS, and industry and society sectors, Qureshi told journalists at a briefing in London late last week.

Qureshi said Ericsson would consider relevant partnerships and acquisitions to achieve those leadership positions, Mobile World Live reported. The company will evaluate potential partners and take over targets based on its R&D needs, the news outlet added.

Ericsson is expanding into new fields at a time when Qureshi admits its traditional networking business is likely to see a slowdown in revenues due to currency fluctuations and the broader market cycle that has seen many major LTE deployments completed, Mobile World Live said.

The deal with Cisco highlights why Ericsson is keen on partnerships. Qureshi said the agreement enables the companies to begin working together faster than an acquisition.

Ericsson and Cisco announced in early November that they would collaborate on the development of technologies including 5G, the Internet of Things, cloud and IP. Ericsson CEO Hans Vestberg later explained that the companies had discussed the partnership for a year, as he moved to quash rumours that Cisco had sought to acquire Ericsson.

Analysts told Mobile World Live that a merger would have taken longer to implement because of the need to gain regulatory approvals in relevant markets.

Ericsson and Cisco expect their partnership to generate $1 billion (€945 million) of additional revenues apiece by 2018. The deal was welcomed by analysts and industry players alike, with the mood of the industry perhaps best summed up by Verizon Communications' EVP and chief information and technology architect Roger Gurnani, who noted the partnership "has the potential to reshape the industry."

For more:
- see this Mobile World Live report

Related articles:
Ericsson CEO Vestberg denies Cisco merger was ever on the table
Cisco sees routing revenue dip 8% due to timing of large deals
Ericsson and Cisco: praise for the non-merger
Ericsson and Cisco partner on networks, target $1B in extra sales by 2018
Ericsson misses analyst estimates in Q3 as networks sales decline

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