Ericsson (NASDAQ:ERIC) continues to build up its services business, agreeing to acquire Toronto-based consulting company Telcocell, which specializes in business support systems (BSS), Amdocs platforms, custom development and software as a service (SaaS).
Borgklint (Image source: Ericsson)
Ericsson said it will absorb some 200 Telcocell employees when the acquisition closes next quarter. Financial terms of the purchase were not disclosed.
The Telcocell acquisition complements Ericsson's earlier takeover of operational support system (OSS) and BSS vendor Telcordia via a $1.15 billion agreeement announced in June 2011. Further, this most recent deal highlights how Ericsson continues to expand its reach while rival infrastructure providers contract their offerings to focus to a few core competencies. Nokia Siemens Networks, for example, sold off its BSS unit to Toronto-based Redknee in March 2013.
The Telcocell takeover is strategic for Ericsson. Not only is the company building up its software and services offerings as the traditional telecom hardware market continues to slide, but it is also forging a stronger presence in North America. "The acquisition complements Ericsson's offering to telecom and cable customers particularly in North America," said the company.
Also reflecting the growing importance of the region to Ericsson, the vendor announced last week that it will base Per Borgklint, head of its support solutions business unit and a member of the company's executive leadership team, in Silicon Valley. The support solutions unit develops software-based solutions for operations and business support systems (OSS and BSS), real-time enablement, multi-screen and on-demand TV, compression and m-commerce.
"North America is the driver behind much of the innovation in the ongoing convergence of telecom, IT and media. Our operations in Silicon Valley, where the important ecosystem of software developers, media and other key players are present, ensure that we can fully explore the opportunities for Ericsson across our entire business," said Hans Vestberg, company president and CEO.
According to Borgklint, 20 percent of the support solutions business unit's sales came from North America during 2012. "With the acquisitions of ConceptWave, Telcordia and most recently Mediaroom, our overall operations in North America are growing in significance," he added.
Ericsson has some 15,000 employees in North America, with more than 1,100 in Silicon Valley.
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