Ericsson makes $US1b OSS/BSS play, buys Telcordia

Stuart Corner
Tuesday, 14 June 2011 22:44

IT Industry - Deals

Ericsson is to acquire from current owners Providence Equity Partners and Warburg Pincus 100 percent of the shares of Telcordia, a global leader in the development of mobile, broadband and enterprise communications software and services, especially OSS/BSS, for $US1.15b.

Ericsson CEO and president, Hans Vestberg, said: "The importance of operations and business support systems will continue to grow as more and more devices are connected, services become mobile and new business models for mobile broadband are introduced. In this context, Telcordia brings very skilled people and knowledge, a large business in North America and other markets, as well as a good multi vendor product portfolio."

According to Ericsson: "One of the main challenges for operators is how to handle the growth in mobile and fixed broadband traffic, as well as the new types of connected devices, services and applications and the high expectations on user experience, while at the same time increasing the efficiency in business and operations.

"OSS and BSS are critical areas to handle this challenge and to simplify the processes that support the business. They drive the customer experience and serve as the engine to monetising traffic, offerings and products that operators sell. All in all, these systems are crucial to create the experience users expect in a cost efficient manner'¦The deal creates the leader in service fulfilment, service assurance and network optimisation and gives Ericsson a leading position in real-time charging and significant capabilities to support operators end to end."

Telcordia president and CEO, Mark Greenquist, claimed: "Together, we will lead the way into a new era of converged communications, while expanding our offerings to manage the world's most dynamic networks."

The deal is Ericsson's third in as many years aimed at strengthening its OSS/BSS portfolio. In December 2010 Ericsson acquired Optimi Corporation, a US-Spanish telecommunications vendor of OSS-based network optimisation services that it said was "the global leader, providing mobile carriers with automated design, optimisation and management solutions'¦[that enable] operators to improve network performance whilst at the same time reducing capex and opex in 2G, 3G and 4G networks."

The following month Ericsson launched a web site dedicated to promoting its OSS/BSS expertise and announced that it had completed the integration of German software company LHS, a provider of billing and customer care systems. That deal had been announced in June 2007.

Telcordia, headquartered in New Jersey, generated revenues of $US739m in the year to 31 January 2011 and employs more than 2,600 people. The company traces its roots to AT&T Bell Labs, When AT&T was split up in 1984, it retained Bell Labs and the seven 'Baby Bell' regional operating companies formed Bellcore to give themselves an R&D facility to replace Bell Labs. It drew heavily on Bell Labs resources and staff at its formation. The RBOCs sold Bellcore to Science Applications International Corporation (SAIC) in 1996 after which the name was changed to Telcordia. Providence Equity Partners and Warburg Pincus acquired the company in 2004.

According to Wikipedia: "Telcordia is a chief architect of the telecommunications system in the US and has pioneered many of the telecommunications services used today, including Caller ID, Call Waiting, Mobile number portability and Toll-free telephone number (800) service. Telcordia's expertise lies in managing large, complex projects across the operations and communications spectrum."

According to its web site, Telcordia has a sales office in Australia, in the BT Tower in Market Street Sydney.