Ericsson's plan to buy Redback Networks for $2.1 billion is a sign of how the popularity of Internet video is expected to drive demand for broadband network upgrades, an Associated Press report said.
The Associated Press report, quoting analysts, said the acquisition also plugs a key hole in Ericsson's product line as the company girds itself for an increasingly fierce battle with rivals Cisco Systems, Alcatel-Lucent and Juniper Networks.
Network equipment makers are locked in a tooth-and-nail fight to provide the gear that enables service providers to offer greater bandwidth on their networks and faster and cheaper downloads of data, voice and video products, the report said.
One key area of growth is expected to be IPTV, or Internet Protocol television, a form of digital television typically delivered over broadband. Such connections also support high-speed Web surfing and telephone service, the report said.
San Jose-based Redback makes 'edge' routers, a crucial piece of technology for enabling those high-level functions.