Speculation over Ericsson's future strategy has intensified following Nokia's announcement this week that it plans to buy Alcatel-Lucent, with some saying the Sweden-based vendor will be forced to expand its fixed-line business.
The combination of the Finnish and French telecoms equipment manufacturers will present much stronger competition to Ericsson, which is currently the world's largest manufacturer of mobile network gear. The "new" Nokia will have a much broader based of both fixed and mobile products, and could prompt Ericsson to buy companies that specialise in fixed-line technology.
Ciena and Juniper Networks have been cited as possible targets for the Swedish vendor.
Bernstein analysts told Reuters that Ericsson could place itself ahead of Nokia and China's Huawei by buying these two U.S. companies.
"If Ericsson wanted to restore the old order and avoid being marginalised over a long period of time by two players with completely credible mobile capabilities and much stronger IP routing and optical ones, the natural route for Ericsson would be to acquire Juniper and Ciena," Bernstein said in a note.
Bengt Nordstrom, founder and CEO of independent mobile strategic consultancy Northstream, told FierceWireless:Europe that the industry as a whole needs to consolidate.
"The macro-level infrastructure market is largely saturated and slowing down globally. Going forward, the focus will be adding capacity to existing networks, delivering indoor coverage and building networks that support the IoT. These sectors deliver much less revenue than macro-level rollouts," he commented.
Nordstrom added that the deal could also be bad news for Samsung, which he said has made no secret of wanting to grow its network infrastructure business. "The Nokia-Alca-Lu deal greatly reduces Samsung's opportunity to enter what is already an ultra-competitive market," he noted.
Alcatel-Lucent CEO Michel Combes said this week that he expected Nokia's purchase of Alcatel-Lucent to force competitors to re-examine their product portfolios, Reuters reported.
In a separate report, the news agency also noted that Singapore-based Flextronics International is in advanced talks to buy part of the Chinese business of Alcatel-Lucent. The French company owns 50 per cent of Shanghai Bell in a joint venture with the Chinese government.
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