Ericsson in strategic partnership with Cisco to generate sales and synergies
Nov 9, 2015
November 9, 2015, 08:31 (CET)
Expected to generate USD 1 billion or more of additional sales by 2018
Full-year effect from synergies of SEK 1 billion expected in 2018
Accretive to operating income already in 2016
Ericsson (NASDAQ:ERIC) today announced a next-generation strategic partnership with Cisco (NASDAQ:CSCO) to create the networks of the future. The partnership will combine the best of both companies: routing, data center, networking, cloud, mobility, management and control, and global services capabilities. Ericsson will together with Cisco, leader in IP-networking, offer end-to-end leadership across network architectures for 5G, cloud and IP, and the Internet of Things.
Today's announcement is supported by multiple agreements including a global service partner agreement, as well as a broad reseller agreement. The parties have also agreed to discuss FRAND policies and enter a licensing agreement for their respective patent portfolios.
Hans Vestberg, President and CEO, Ericsson, says: "This partnership fortifies the IP strategy we have developed over the past several years and it is a key step forward in our company transformation."
Details of the partnership have been announced separately in a joint announcement and can be found on www.ericsson.com .
As a result of the partnership, Ericsson will extend its addressable market and is expected to generate USD 1 billion or more of additional sales by 2018 (full year). The extended addressable market is primarily in professional services, software and resell of Cisco products. The additional sales are expected to be accretive to operating income already in 2016. The partnership is expected to generate full-year effect from synergies, primarily in expenses of SEK 1 billion in 2018.
Ericsson and Cisco will continue to explore further joint business opportunities as the partnership progresses.
A media and analyst call with Hans Vestberg, President and CEO of Ericsson and Chuck Robbins, CEO of Cisco, will be held today at 14.15 CET. Details can be found at www.ericsson.com/press and www.ericsson.com/investors.
Ericsson is hosting its Capital Markets Day November 10 in Kista, Sweden. At this event Ericsson CEO Hans Vestberg and John Chambers, Executive Chairman, Cisco, will discuss the partnership and answer questions. The event will be presented in live webcast - more details can be found at www.ericsson.com/investors.
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