Ericsson to shy away from M&A, will focus on services

Ericsson does not plan to take part in any major transactions, the company's chief executive told the Wall Street Journal. Instead it will focus on organic growth and the burgeoning services market.

"Organic growth has been good for us," Ericsson CEO Hans Vestberg said in an interview with the WSJ. He said he expects consolidation in the equipment vendor market, but noted Ericsson will not be looking for a large deal, such as acquiring Motorola's networking business.

Ericsson has predicted there will 50 billion wirelessly connected devices by 2020. To take advantage of this, Vestberg said Ericsson might make small acquisitions to boost its portfolio. Interestingly, he said U.S. carriers are "quite close" to having the proper equipment to handle data growth.

In a separate interview with Bloomberg, Vestberg said Ericsson will focus on the $20 billion mobile services market for growth. He said that two-thirds of the global services market is still run by carriers themselves. "You can gain from that two-thirds," he said. "If you do perform well in the services, they see efficiencies gained."

Ericsson also announced major contract wins in China. The vendor inked a $1 billion deal with China Mobile and an $800 million contract with China Unicom.

For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Reuters article

Related Articles:
Report: Motorola keeping options open for networks business
Ericsson slashing 1,500 more jobs amid restructuring
Ericsson names new services, CDMA chiefs
Ericsson exec confident about growth, managed services
Dell'Oro: Ericsson bounds ahead of rival vendors in Q4

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