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LAS VEGAS—No big-time mergers for L.M. Ericsson, said the company’s chief executive, Carl-Henric Svanberg, during a press conference Thursday.
As Svanberg laid out Ericsson’s technology strategy, he explained that the current trend toward vendor consolidations puts pressure on the smaller firms and gives large players an advantageous position. However, he said that while some of the big will get bigger, Ericsson will only acquire small- to medium-sized companies that can add value to its portfolio of products and services.
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“Larger acquisitions for us are questionable. Synergies aren’t so easy because we work on different platforms, etc. … It should be really strong fit.”
Svanberg said that Ericsson is heavily into research and development for the technologies it’s interested in and though there can be good additions, such as the company’s purchase of Marconi’s telecom assets last year, he said Ericsson pursues partnerships conservatively, asking, “how do they fit in, what is their culture?”
Regarding the impact of Lucent Technologies Inc. and Alcatel Inc.’s merger, Svanberg said the combined company will now have a stronger fixed-line offering, but he also sees opportunities for Ericsson in the wireline sector, which Ericsson entered into recently with its purchase of Marconi’s fixed-line assets and doesn’t see the merger as a negative for Ericsson.
Overall, Svanberg said consolidation among vendors is a good thing for carriers since multiple vendor equipment makes for a more complicated network, and one that’s more expensive to operate.
Svanberg also mentioned that rollouts of HSDPA networks in the United States prove that market is quickly catching up to Europe in terms of wireless technology.
“The fundamentals are in place for HSDPA. … In a short period of time, the only wideband we will talk about will be HSDPA, it’s the best technology.”
As far as competition from Chinese vendors, Svanberg said their pressure is easing as they shift their focus from trying to be all things in all places to focusing on product management and support services for their products.
“The Chinese are there, and they will be big, and they will be strong. But on the other hand, we may have seen their strongest offerings.”
Svanberg said Ericsson’s focus is largely on mobile broadband and commented that he wonders if mobile TV’s potential is being underestimated. He pointed out that broadcasters are adjusting to a changing market where consumers view content as they have time, on demand, instead of according to a broadcast schedule.
In addition, Svanberg said Ericsson’s global leadership with Internet Protocol Multimedia Subsystem deployments is leading the way toward all IP networks and he said the company is building up its position with IPTV.
