) recently acquired the EVDO business of Airvana Network
Solutions. The software enables data transmission in CDMA
wireless networks. The deal was structured as a stock purchase,
but other financial details were not disclosed.
The acquisition is a strategic move by Ericsson to strengthen
its CDMA line of business. The acquisition also supports the
vertical integration strategy of Ericsson for key CDMA products;
thereby augmenting its product portfolio and having greater
ability to better respond to its customers.
Incidentally, Airvana had filed a lawsuit against Ericsson in
Feb 2012. Airvana had accused Ericsson of violating the terms of
a deal that required Ericsson to ship Airvana-designed products
with Airvana's software and pay royalties. However, post this
acquisition both companies will withdraw their allegations.
Ericsson has been strategically acquiring companies to
strengthen its core areas, and thus have a better market share.
In addition, through these acquisitions, Ericsson intends to
serve its customers better across all areas of telecom
Ericsson recently completed the acquisition of
) Mediaroom business and became the leading provider of IPTV
(Internet Protocol TV) and multi-screen solutions. The
acquisition of the TV business comes at an opportune time when
the global IPTV market is expected to cater to 76 million
subscribers in 2013.
Further, the IPTV market is expected to generate revenues of
$32 billion. Ericsson expects the IPTV market to have 105
million subscribers with revenues of $45 billion by 2015.
Ericsson currently has a Zacks Rank #3 (Hold). Other wireless
equipment companies worth a look are
Ubiquiti Networks Inc
). Ubiquiti Networks has a Zacks Rank #1 (Strong Buy), while
Tellabs Inc. carries a Zacks Rank #2 (Buy).
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