Ericsson sells network testing business for US169M - Mobile World Live

Ericsson sells network testing business for US169M

26 OCT 2009

Ericsson announced today it is to sell its network testing business – TEMS – to Swiss technology firm Ascom for CHF190 million (US$169 million). The deal will see 300 TEMS employees transfer to Ascom, of which around 180 are based in Ericsson’s home country of Sweden. Ascom will finance the acquisition through a combination of cash (CHF70 million) and a syndicated credit facility (CHF120 million) secured from a consortium of eight Swedish banks led by UBS and Credit Suisse. The deal is expected to close in June this year. Products within the TEMS brand are supplied to the world’s top twenty mobile operators. In 2008, TEMS generated total revenues of CHF165 million and claims to be highly profitable.

In a statement, Ericsson stressed that divestment of its air interface monitoring and radio network planning business will enable it to refine “its leading Professional Services portfolio, to focus more purely on the service business.” The world’s largest mobile infrastructure vendor increased sales of Professional Services 14 percent year-on-year in 2008 to SEK49 billion. However, today’s move, coupled with recent high-profile network outsourcing success, suggests the vendor is now intent on devoting more effort to the Managed Services area of its Professional Services business. Year-on-year growth in sales of Managed Services grew 17 percent in 2008, contributing SEK14.3 billion of sales to the total Professional Services revenue base.

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