Cisco and Ericsson said their partnership could generate more than the  additional $1 billion-plus figure touted earlier this week in future years, while declaring their alliance superior to a full-blown merger, according to reports.

The duo previously said their wide-ranging deal will generate additional revenue of $1 billion or more for each company by 2018. However, on stage at the Morgan Stanley TMT conference, Cisco executive chairman John Chambers and Ericsson CEO Hans Vestberg said they had high expectations for future years, according to Reuters.

“We have much higher ambitions,” said Vestberg about revenue targets.

“If we do this right, there are other opportunities as well,”  he added about growth prospects.

Quizzed on the same subject, Chambers said $1 billion in additional revenue would expand Cisco’s top line by just 2 per cent, and add 3 percent to Ericsson’s revenue. However he pointed out this additional revenue would come with little incremental expense, boosting both firms’ profitability.

Chambers also said the partnership with Ericsson is the new model for the once acquisitive US firm. “This will be as important in the next decade as M&A has been in the past two decades,” he said in comments reported by the Financial Times.

A full merger would take longer to be effective since it would involve restructuring and regularity clearance, both processes that are time-consuming.

Nokia/Alcatel-Lucent
Chambers took a sideswipe at Nokia’s proposed merger with Alcatel-Lucent. “The odds are good that [the Alcatel and Nokia merger] will fail,” he said, pointing to previous tech M&A failures.

“By the time you shake out the efficiencies and get regulatory approval, it’s a two- to three-year process. This industry, the winners and losers, will be decided in three years. I’d love to see a lot of our peers tied up with large acquisitions.”

Chambers highlighted the original combination of Alcatel and Lucent in 2006 as a “gift from heaven”.

Some analysts have been critical of the Cisco-Ericsson alliance, arguing it is largely a defensive move in response to Nokia/Alcatel-Lucent’s merger that will not deliver much of a revenue uplift in the short-term beyond some resale benefit, mostly for Cisco.