LM Ericsson Telephone Company
) completed the acquisition of French company Technicolor's
Broadcast Services Division for €19 million. Ericsson intends to
expand its broadcasting area by increasing its current broadcast
operations in terms of channels managed and households reached.
The acquired Broadcast Services business will bring with it
about 900 highly experienced professionals along with playout
operations located in France, the U.K. and the Netherlands.
Ericsson is already the leading provider of managed services for
telecom operators and has invested in processes and tools in this
Currently, the TV industry is undergoing fundamental changes
with the transition to multi-platform, on-demand television.
Therefore, teaming up with a trusted partner enables broadcasters
to meet up with the increasing commercial and technological
complexity and competition in the TV broadcasting market.
Ericsson applies the managed services business model to improve
efficiency, introduce innovation and increase revenues for
broadcasters. Its managed services comprise solutions for network
design and planning, network operations (the day to day operations
of customer networks), field operations and site maintenance,
network sharing solutions, as well as shared solutions like hosting
of platforms and applications.
The acquisition of Technicolor's Broadcast Services Division is
a strategic move by Ericsson to become a leading provider in
managed services for broadcasters.
In the recently reported quarter, Managed services revenue
increased 16% year over year to SEK 5.7 billion ($0.8 billion) but
declined 6% sequentially, the year-over-year increase was primarily
driven by 23 new contracts accrued by the company during the fourth
quarter of fiscal 2012.
Ericsson currently holds a Zacks Rank #3 which implies a
short-term Hold rating on the stock.
ERICSSON LM ADR (ERIC): Free Stock Analysis
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