Ericsson and Cisco in network partnership to boost sales

STOCKHOLM, (Reuters): Mobile equipment maker Ericsson and US networking company Cisco Systems Inc said on Monday they had agreed a business and technology partnership that should generate additional revenues of $1 billion for each company by 2018.

Ericsson, whose like-for-like sales are down 7 per cent so far this year and were roughly flat over the previous three years, said the partnership means new areas of revenue as it will boost its addressable market, mainly in professional services, software and the resale of Cisco products.

“We are the wireless number one in the world,” Ericsson Chief Executive Hans Vestberg told Reuters.

“Cisco is by far the number one in the world when it comes to IP routers. Together we can create innovative solutions”

The companies said in a statement they would together offer routing, data centre, networking, cloud, mobility, management and control, and global services capabilities.

“The strategic partnership will be a key driver of growth and value for the next decade, with each company benefiting from incremental revenue in calendar year 2016 and expected to ramp (up) to $1 billion or more for each by 2018,” they said.

Ericsson expects full-year cost synergies of 1 billion Swedish crowns ($115 million) in 2018 due to the partnership and said it would continue to explore further joint business opportunities with Cisco.