Ericsson, which has just laid off 2,200 people Sweden and which plans more cost cutting around the world has already started spending the savings by buying the IT business services part of Chinese outfit Sunrise Technology.
The transaction means Ericsson will take on 1,000 employees at the Guangzhou-based IT services provider, and gain a toe-hold in the Chinese market. Sunrise counts the “leading operators” in the Middle Kingdom as its clients for operations and business support systems (OSS/BSS) tech.
Ericsson says that Sunrise Technology will continue to exist as a separate entity, so will continue serving customers in sectors other than telecom.
The deal, subject to the usual i dotting and t crossing, will close in Q2 2015. If approved, Ericsson will emerge with a fattened portfolio of IT consulting, systems integration for charging and billing systems, customer relationship management and business intelligence/analytics solutions. It also stands to gain more application development and maintenance capabilities.
Magnus Mandersson, Executive Vice President and Head of Business Unit Global Services at Ericsson, says: "China is the world's biggest mobile market in terms of number of subscriptions, with 1.285 billion. Most of the country's telecom operators are at the beginning of their IT transformation journeys, and will soon replace their legacy IT systems with next-generation solutions that will enable them to launch digital offerings. The acquisition of Sunrise Technology's telecom business will boost our ability to serve mobile operators' IT transformation needs in China, and is aligned with our strategy of becoming a global ICT leader.".
Selling mobile infrastructure against the home grown solutions from Huawei and ZTE is a tall order for Ericsson so buying a little local help makes sense, although the company demurred when we quizzed it on the value of the deal. "The completion of this acquisition significantly strengthens our position in China and shows our commitment to the market," says Mats H. Olsson, Senior Vice President and Head of Asia-Pacific at Ericsson. "The skills and experience of the Sunrise Technology employees will be key for us to continue providing leading services to our customers in China."
Sunrise isn’t Ericsson’s first OSS/BSS purchase. It has previously acquired companies such as Telcordia (2012), TeleOSS and Telcocell (2013), GEOSS (2014), and just las month, Canadian company TimelessMIND (2015). ®