North America has become Ericsson’s largest sales region and its second-largest employment region with the just completed acquisition of Nortel Networks assets and the recent outsourcing win from Sprint Nextel Corp.
Ericsson’s $1.13 billion purchase of bankrupt infrastructure vendor Nortel, which was finalized Nov. 13, includes substantially all of Nortel’s CDMA assets and certain LTE assets, as well as more than 2,500 Nortel employees. That, combined with the 6,000 employees Ericsson acquired as part of its network outsourcing deal with Sprint Nextel, gives the infrastructure giant about 14,000 employees and about 2,000 more contract employees in North America, said Angel Ruiz, head of Ericsson’s North American operations.
The acquisition gives Ericsson agreements with some top North American carriers, including Verizon Wireless, Sprint Nextel, U.S. Cellular Corp., Leap Wireless International Inc., Bell Canada and Telus Corp.
“This deal, along with our recently announced services and LTE agreements, demonstrates the importance of the North American market to Ericsson. Our strength in the region proves to our global customers that we are capable of continuing to provide the best equipment and services, in a scalable and efficient way,” said incoming President and CEO Hans Vestberg.
Along with the installed base of CDMA customers, Ericsson will be at the forefront of LTE deployments, and capitalize on the former Nortel employees doing LTE research and development in Ottawa, Ruiz said in an interview with RCR Wireless News. Verizon Wireless and MetroPCS Communications Inc. have already picked Ericsson to build out their LTE networks.
About half of the former Nortel employees are customer focused, in that they live and work where the carriers are located. Ericsson also has a major presence in Plano and Richardson, Texas, and an R&D facility in Silicon Valley, as well as offices in New Jersey, Atlanta, Seattle and San Antonio, Ruiz noted. The company will not be taking over Nortel’s Texas facilities. Former Nortel employees will be integrated on things like payroll and human resources immediately, but Ruiz expects the IT functions will take longer to integrate.
The infrastructure business has been fairly volatile recently. Along with Nortel’s bankruptcy, Alcatel SA and Lucent Technologies Inc. merged as did Nokia Corp. and Siemens SA in response to increased competition from companies like Huawei Technologies Co. Ltd. Nortel Siemens just announced a restructuring that includes cutting nearly 6,000 positions globally.
“We are fortunate to be one of the bright spots,” Ruiz noted.
