Ericsson offers $418m to acquire LHS stake

Ericsson has offered 310 million euros ($418 million) to acquire 55.1% of billing firm LHS.

Ericsson CEO Carl-Henric Svanberg said that LHS' billing and customer care solutions would combine well with the Swedish vendor's real-time charging and mediation offerings.

He said operators were quickly moving towards convergent charging and billing solutions to improve cost efficiency and limit financial risk.

"Ericsson and LHS form a strong constellation of prepaid and postpaid solutions ready to immediately capture this opportunity," Svanberg said.

Research firm Ovum said the development would allow LHS to develop additional revenue streams.

 "A few years ago, LHS faced financial difficulties and at the time everyone in the industry thought the company would disappear, one way or another," Ovum analyst Jean-Charles Doineau said. "But LHS survived, building upon a continuous effort to develop additional revenue streams on its own installed base."

Doineau added that service provider consolidation and pressure on costs has in turn put pressure on billing vendors, pushing them into developing different strategies and alliances.

"Overall, we believe this acquisition is a pretty smart move for Ericsson and for LHS, and probably marks the end of a story that has had many ups and downs for the German billing software vendor," Doineau said.