Ericsson looks to deals to tap new markets - Mobile World Live

Ericsson looks to deals to tap new markets

27 NOV 2015

Ericsson is open to more strategic partnerships and acquisitions as it looks for growth in markets away from its traditional telecoms business, revealed Rima Qureshi, the company’s chief strategy officer.

With the company having targeted new areas such as cloud, IP networks, TV/media, OSS/BSS and the so-called Industry & Society segment, she said Ericsson goes into these emerging spaces as “challengers”, which could lead to further partnerships or acquisitions.

Speaking at an event in London today, Qureshi (pictured), who is also the company’s head of M&A, said: “We are not a leader yet. We see a lot more competition from IT and media but we have the objective to create a leadership position. The way we do that is to look at specific R&D, make strategic partnerships and acquire companies.”

“We need to look at how to create critical mass as we develop these new businesses. We can’t do everything ourselves, and more and more it’s going to be about the ecosystems we create,” she continued.

Slowdown
While placing a big focus on non-telecom services like TV/Media, the company sees much slower growth for its traditional network businesses, despite the ongoing evolution of infrastructure.

Qureshi said: “Partly it’s due to currency, partly it’s because of where we are in the cycle of deployments and partly it’s because we need to do a better job of monetising data. That’s part of what we are trying to leverage.”

“We need to focus on the quality and performance of the network to create growth, along with data growth. The strong US dollar also plays a factor, given that deployments of LTE in specific markets have been completed.”

Cisco deal
The executive also discussed the company’s recently announced partnership with Cisco, reiterating that partnering enabled it to begin collaborating “straight away”, instead of facing a drawn out process of a merger or acquisition.

“We are already working towards the synergies for what we announced with the partnership, and that is why we opted to move down this route instead of other solutions,” she said.

She also talked up both companies’ commitment to the development of IoT, which will come hand in hand as it moves to focus on 5G solutions.

Speaking on the sidelines at the event, Paolo Pescatore, director, multiplay and media at CCS Insight, agreed that Qureshi’s presentation largely represents a change in strategy from the company to offset the effects of slow growth in its core business.

“I think it shows Ericsson can’t rely solely on its core business today. It’s in a state of transformation and the business will look radically different in five to ten years to what it is today,” he said.

“Fundamentally the Cisco partnership is key, and it’s a far cheaper alternative and one that doesn’t require regulatory approval as it would have done with an acquisition, which would have faced approval issues.”

Author

Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

Read more

Related

Tags