Ericsson (NASDAQ: ERIC) has entered into an agreement to acquire Vonage Holdings Corp. (NASDAQ: VG) for USD 21 per share. This represents a total acquisition price of approximately USD 6.2 billion (Enterprise Value).

The merger agreement was approved unanimously by the Board of Vonage. The transaction builds upon Ericsson’s stated intent to expand globally in wireless enterprise, offering existing customers an increased share of a market valued at USD 700 billion by 2030.

THE ACQUISITION UNDERLINES ERICSSON STRATEGY TO EXPAND ITS PRESENCE IN WIRELESS ENTERPRISE AND BROADEN ITS GLOBAL OFFERINGS

Börje Ekholm, President and CEO of Ericsson, says: “The core of our strategy is to build leading mobile networks through technology leadership. This provides the foundation to build an enterprise business. The acquisition of Vonage is the next step in delivering on that strategic priority. Vonage gives us a platform to help our customers monetize the investments in the network, benefitting developers and businesses. Imagine putting the power and capabilities of 5G, the biggest global innovation platform, at the fingertips of developers. Then back it with Vonage’s advanced capabilities, in a world of 8 billion connected devices. Today we are making that possible.”

“Today Network APIs are an established market for messaging, voice and video, but with a significant potential to capitalise on new 4G and 5G capabilities. Vonage’s strong developer ecosystem will get access to 4G and 5G network APIs, exposed in a simple and globally unified way. This will allow them to develop new innovative global offerings. Communication Service Providers will be able to better monetize their investments in network infrastructure by creating new API driven revenues. Finally, businesses will benefit from the 5G performance, impacting operational performance, and share in new value coming from applications on top of the network.”

Rory Read, CEO of Vonage, says: “Ericsson and Vonage have a shared ambition to accelerate our long-term growth strategy. The convergence of the internet, mobility, the cloud and powerful 5G networks are forming the digital transformation and intelligent communications wave, which is driving a secular change in the way businesses operate. The combination of our two companies offers exciting opportunities for customers, partners, developers and team members to capture this next wave.”

“We believe joining Ericsson is in the best interests of our shareholders and is a testament to Vonage’s leadership position in business cloud communications, our innovative product portfolio, and outstanding team.”

For Ericsson, the acquisition builds on the success of the integration of Cradlepoint in September 2020. Cradlepoint has continued to develop strongly under Ericsson’s ownership.

Vonage, a global provider of cloud-based communications, has a strong track record of growth and margin evolution. Sales were USD 1.4 billion in the 12-month period to 30 September 2021, and over the same period, Vonage delivered an adjusted EBITDA margin of 14% and free cash flow of USD 109 million.

The cloud-based Vonage Communications Platform (VCP) serves over 120,000 customers and more than one million registered developers globally. The API (Application Programming Interface) platform within VCP allows developers to embed high quality communications - including messaging, voice and video - into applications and products, without back-end infrastructure or interfaces. Vonage also provides Unified Communications as a Service (UCaaS) and Contact Center as a Service (CCaaS) solutions as part of the Vonage Communications Platform.

VCP accounts for approximately 80% of Vonage’s current revenues and delivered revenue growth in excess of 20% in the three-year period to 2020, with adjusted EBITDA margins moving from -19% in 2018 to break-even in the 12-month period to 30 September 2021. Vonage’s management team projects annual growth of over 20% for VCP in the coming years.

Ericsson and Vonage – creating a winning combination

Vonage’s presence in the Communication Platform as a Service (CPaaS) segment will provide Ericsson with an opportunity to access a complementary, substantial and high growth segment. With increasing investments in 4G and 5G - and a flourishing ecosystem of new applications and use cases leveraging the power of modern networks - demand from enterprises for programmable networks has been accelerating. CPaaS technologies democratize network access by offering API enabled communications services. The CPaaS market is expected to reach USD 22 billion by 2025, growing at 30% annually. In addition, Ericsson’s global leadership in 5G technology is expected to provide access to the developing space for open network APIs, which is expected to reach at least USD 8 billion by the end of the decade with a strong growth profile. CSP customers will also benefit from monetizing their network investments, optimizing the user experience and stimulating additional growth opportunities with new and advanced global network APIs and access to Vonage’s unified communications and contact center solutions.

The combination of Vonage’s customer base and developer community and Ericsson’s deep network expertise, 26,000 R&D specialists and global reach create opportunities to accelerate standalone strategies and innovation in the market. This includes accelerating enterprise digitalization and developing advanced APIs made possible by 5G; putting the power of the wireless network and communications at the finger-tips of the developer. Such APIs can be applied to help ensure the quality of critical services like telemedicine, immersive virtual education and autonomous vehicles as well as experiential performance benefits in gaming, augmented and extended reality, over wireless. 

In the longer term, Ericsson intends to offer value benefits to the full ecosystem – telecom operators, developers, and businesses – by creating a global platform for open network innovation, built on Ericsson and Vonage’s complementary solutions. 

Overview of the transaction

The acquisition will be conducted by means of a merger agreement through which Ericsson will acquire all of Vonage’s outstanding shares at an all-cash price of USD 21 per share. The merger consideration represents a premium of 28% to Vonage’s closing share price on 19 November 2021 of USD 16.37 per share, and a premium of 34% to the volume-weighted average share price over the 3 months to 19 November 2021 of USD 15.71 per share. 

The acquisition will be financed through Ericsson’s existing cash resources, which amounted to SEK 88 billion as of 30 September 2021 on a gross basis, and SEK 56 billion on a net basis as of the same date.

The transaction is expected to deliver near-term revenue synergy opportunities, including white-labelling and cross-selling of the combined product portfolio estimated to contribute USD 0.4 billion. by 2025. Ericsson also expects to achieve some cost efficiencies following completion of the transaction.

The transaction is expected to be accretive to EPS (excluding non-cash amortization impacts) and free cash flow before M&A from 2024 onwards.

On completion, Vonage will become a wholly owned subsidiary of Ericsson and will continue to operate under its existing name. It will be reported as a separate segment in Ericsson accounts. Vonage is headquartered in Holmdel, New Jersey in the United States with 2,200 employees throughout the United States, EMEA and APAC. Vonage’s employees will remain with the company and the Vonage CEO Rory Read will join the Executive Team of Ericsson, reporting to CEO, Börje Ekholm. Read joined Vonage as CEO in July 2020. With more than three decades’ global technology industry experience, Read was previously Chief Operating Executive for Dell Technologies and before that, CEO of Advanced Micro Devices (AMD). 

Ericsson remains fully committed to previously communicated financial targets, including long-term EBITA margins of 15-18%; long term FCF before M&A of 9-12% of sales; and a 2022 target EBIT margin of 12-14% for Ericsson Group excluding Vonage. 

Completion of the transaction is subject to Vonage shareholder approval, regulatory approvals and other customary conditions and is expected within the first half of 2022.

Further Reading:

• Read more about Digital Transformation @ www.fieldservicenews.com/digital-transformation
• Read more about Ericsson on Field Service News @ www.fieldservicenews.com/ericsson
• Read more about Telecommunications on FSN @ www.fieldservicenews.com/telecommunications
• Find out more about Ericsson @ www.ericsson.com
• Learn more about Vonage @ www.vonage.co.uk
• Follow Ericsson on Twitter @ twitter.com/Ericsson

Ericsson (NASDAQ: ERIC) is launching its Intelligent Automation Platform, a service management and orchestration product which enables any mobile network to be intelligently automated.

Building on existing offerings, including cloud native dual-mode 5G Core and the Cloud RAN portfolio, the company is adding the Ericsson Intelligent Automation Platform and a suite of rApps as a natural next step to build the networks of the future.

The solution facilitates AI and automation, which improves network performance, operational efficiency and customer experience to help create smarter networks.

ERICSSON INTELLIGENT AUTOMATION PLATFORM IS AN OPEN SERVICE MANAGEMENT PRODUCT THAT WILL HELP COMMUNICATIONS SERVICE PROVIDERS OPTIMIZE NETWORK PERFORMANCE AND DELIVER ENHANCED CUSTOMER EXPERIENCE.

The cloud-native solution will work across new and existing 4G and 5G radio access networks (RAN) and will support diverse vendors and RAN technologies, including purpose-built and Open RAN.

This will create greater choice for communications service providers (CSPs) as they evolve their networks. Ericsson’s investment in this platform is reflective of the company’s contributions to industry development of Open RAN technologies.

Ericsson Intelligent Automation Platform automates the radio access network using AI and radio network applications (rApps) with different functionalities. In a similar way to an operating system that automates operations, resources and identifies improvements to be made across the network, Ericsson Intelligent Automation Platform includes a non-real-time RAN intelligent controller (Non-RT-RIC) that operates rApps.

The platform supports ecosystem innovation by enabling software developers to build products through a software-development toolkit (SDK). A suite of Ericsson rApps with field-proven capabilities will be made available on the platform across four domains: efficient automated deployment; network healing; network evolution; and network optimization. The suite will continue to grow in collaboration with customers.

Jan Karlsson, Senior Vice President and Head of Business Area Digital Services, Ericsson, says: “We embrace the principle of openness and the evolution to open network architectures. Building upon our Cloud RAN offering, we are taking another major step towards building the network for the digital future with the launch of Ericsson Intelligent Automation Platform, which fundamentally enables smarter mobile networks. We look forward to providing our customers with an open platform that enables operational efficiency, enhances customer experience and drives service innovation. I am happy to hear the reactions from our customers already being positive towards our new product and we look forward to future development and innovation.”

Neil McRae, MD Architecture & Strategy, BT Group Chief Architect, says: “At BT we connect for good and continuously innovate to provide the best services for our customers. As we expand and modernize building more reliable networks in more places, managing network complexity via automation is critical to ensure our customers best quality of experience.  I’m pleased to see that Ericsson is launching the Intelligent Automation Platform for automating networks, based on the O-RAN Alliance Service Management and Orchestration (SMO) concept. Ericsson’s vision to extend that SMO concept to support both Open RAN and existing 4G and 5G networks, using a single operational pane-of-glass is an innovative approach.”

Toshikazu Yokai, Executive Officer, Chief Director of Mobile Technology, KDDI, says: “KDDI recognizes the importance of Service Management and Orchestration (SMO) and automation to achieve optimal network operations across multi-vendor, purpose-built RAN and Open RAN environments. SMO combined with an open software-development toolkit (SDK) has the potential to drive application (rApps) innovation and diversity, unleashing CSP, telecommunications vendor and third-party software provider innovation to optimize network performance, improve operational efficiency and drive superior customer experiences. KDDI expects SMO and the Non-Real-Time RAN Intelligent Controller (Non-RT-RIC) to fine-tune RAN behavior and to assure SLAs dynamically based on slice specific service requirements. KDDI looks forward to collaborating with Ericsson to explore the potential of these solutions.”

Sue Rudd, Director Networks and Service Platforms, Strategy Analytics, says: “Ericsson Intelligent Automation Platform brings scalability, performance and operations simplicity to the increasingly complex environment of mobile networks, including purpose-built and Open RAN. Ericsson’s long-demonstrated expertise in radio networking and end-to-end network slicing, in parallel with its active participation in the O-RAN Alliance and leadership in ONAP network automation, have enabled it to create this powerful platform to assist customers to maximize their ROI through smart delivery of high-quality services to their end-customers. Ericsson’s proven record of multi-vendor service orchestration and open operations automation make it an excellent partner for rApps developers and systems integrators who can leverage this unique toolkit and development environment.”

Further Reading:

• Read more about Digital Transformation @ www.fieldservicenews.com/digital-transformation
• Learn more about Ericsson Automation Platform @ www.ericsson.com/intelligent-automation-platform
• Read more about Ericsson on Field Service News @ www.fieldservicenews.com/ericsson
• Find out more about Ericsson @ www.ericsson.com/
• Follow Ericsson on Twitter @ twitter.com/Ericsson

Ericsson (NASDAQ: ERIC) and Belgian Communications Service Provider, Telenet, are extending their managed services partnership through a five-year deal that will see Ericsson take responsibility for planning, design, operations and optimization. The deal also includes the deployment and seamless integration of 5G hardware into Telenet’s mobile network.

he deal will see Telenet deploying Ericsson Operations Engine in 2022, comprising the latest in AI and automation to enhance its mobile network performance and offer improved customer experience. Telenet announced the selection of Ericsson as 5G radio access network (RAN) vendor in a network modernization deal announced in March 2021.

THE DEPLOYMENT OF ERICSSON OPERATIONS ENGINE WILL PROVIDE TELENET'S MOBILE NETWORK WITH DATA-DRIVEN OPERATIONS AND OPTIMIZATION THROUGH AI AND AUTOMATION

Ericsson network optimization services will also be provided under the deal. The solution combines multi-vendor networks expertise with the latest AI-enabled Cognitive Software suite. This functionality will enhance customer experiences and ensure a superior return from Telenet’s deployed network assets. Ericsson will also extend its current Mobile Operation Center with monitoring of the fixed network.

As part the deal, Ericsson will employ 15 of Telenet's mobile network experts while maintaining their current employment conditions.

Micha Berger, Chief Technology Officer, Telenet, says: “We are pleased to reinforce our long-term partnership with Ericsson as part of our vision to build a future-ready 5G network that enables world-class experience for our customers. We are confident that these new technologies will enable us to provide to our customers a state-of-the-art mobile experience.”

Franck Bouétard, Head of Ericsson Belgium, Luxembourg, France, Algeria and Tunisia, says: “Prolonging and expanding our managed services contract is the recognition of our operational performance as Telenet’s trusted partner and is complementing our 5G RAN contract. As Belgium is continuing its shift toward 5G, we are honored to extend our partnership with a key actor such as Telenet to deliver leading 5G services to Belgian consumers.”

Further Reading:

• Read more about Digital Transformation @ www.fieldservicenews.com/digital-transformation 
• Read more about 5G @ www.fieldservicenews.com/5G
• Read more about Ericsson on Field Service News @ www.fieldservicenews.com/ericsson
• Read more about Telenet on Field Service News @ www.fieldservicenews.com//telenet
• Find out more about Ericsson 5G @ https://www.ericsson.com/en/5g
• Follow Ericsson on Twitter @ twitter.com/Ericsson

Scandinavian telecoms and networking giant partner with a number of Chinese companies and Swedish telecoms provider Telia to deliver significant 5G roll out in major field service operations across both regions.

5G roll-out paves way for enhanced field service mobility

China Telecom and China Unicom have selected Ericsson as a 5G radio access network (RAN) vendor as part of the Communication Service Providers’ (CSP) joint nationwide 5G network. China Telecom has also selected Ericsson as a 5G Core vendor.

Ericsson will provide outdoor and indoor site solutions to build capacity and coverage in the 3.5GHz and 2.1GHz bands. Network services including provisioning, installation and testing will be provided to meet the CSPs’ technical needs and enable them to build and share 5G networks.

China Telecom has also selected Ericsson 5G Core portfolio solutions. These include Cloud Packet Core, Cloud Unified Data Management and Policy products, built on cloud-native technology for operational efficiency and agility to launch new 5G services.

In Europe, Swedish communications service provider Telia Company has launched commercial 5G in Stockholm with Ericsson (RAN) products and. Initial services on the 700Mhz band will cover most of central Stockholm by mid-June.

Telia aims to enhance and supplement its low-band 5G commercial services with additional nationwide 5G coverage, including mid and high-bands, following the auction of the related spectrum by the Swedish government later this year. For this launch Telia is using its existing 700MHz spectrum, boosted by LTE and New Radio (NR) carrier aggregation.

Having already partnered successfully on 5G in Sweden including the country’s first industrial 5G network, Telia selected Ericsson as its partner for the launch network. Earlier this month Telia’s sister company Telia Norway also launched its first commercial 5G services, with Ericsson as its 5G RAN supplier.

The service sector is set to take advantage of global 5G coverage as increased speed of mobile connectivity offers further enhancement to mobile computing in the field.

Commenting Allison Kirkby, CEO, Telia Company, said: “As we roll-out 5G across Sweden, we will open up new user experiences and accelerated innovation in areas such as entertainment, healthcare, manufacturing and transport, that will collectively strengthen and protect everyone living and working in Sweden, and Swedish competitiveness in the world.

Further Reading:

• Read more about 5G usage in service @ www.fieldservicenews.com/5g
• Read more about mobile computing in service @ www.fieldservicenews.com/mobility
• Read more about more about empowering field workers @ www.fieldservicenews.com/blog/tag/managing-the-mobile-workforce
• Read more about digital transformation @ www.fieldservicenews.com/blog/tag/digital-transformation
• Read more about Ericcson from their blog @ https://www.ericsson.com/en/blog/2020/5/the-key-to-mobility-robustness-5g-networks 

Ericsson's smart factory in Lewisville, Texas, has produced its first 5G base station. Announced last year, the factory will be one of the most advanced manufacturing facilities in the industry when it is fully operational later this year.

The first product manufactured at the factory is the millimeter-wave Street Macro solution, which is key to Ericsson’s 5G portfolio for its North American customers. All radio access components are housed in one lightweight enclosure, allowing service providers to rapidly grow 5G coverage in complex city environments.

The Street Macro solution, part of the Ericsson Radio System portfolio, is also helping to provide Ericsson’s 5G-enabled connectivity in the smart factory.

Erik Simonsson, Head of the USA 5G Smart Factory, Ericsson, says: “We’re excited to produce advanced 5G radio products for our U.S. customers, to meet the demand for next-generation 5G networks across the country. It’s also exciting to use our own 5G products in the factory for wireless connectivity to increase production efficiency. With the first 5G base stations now rolling off the production line, we are on target this year to have the most fully automated, sustainable 5G smart factory in the U.S.”

Ericsson’s fast and secure 5G connectivity will enable the smart factory with agile operations and flexible production, utilizing industrial solutions such as automated warehouses, connected logistics, automated assembly, packing, product handling and autonomous carts. Ericsson will initially employ approximately 100 people at the facility.

The new USA 5G Smart Factory complements Ericsson’s global supply strategy, which ensures the company is working close to its customers through its American, European and Asian operations, securing fast and agile deliveries to meet customer requirements.

Ericsson and Japanese communications service provider KDDI have successfully demonstrated cloud-native CI/CD (Continuous Integration/Continuous Delivery) pipeline delivery for KDDI’s standalone 5G Core network – a breakthrough in delivering software features speedily and efficiently.

The container-based technology enables automatic deployment of new software and functionalities, while maintaining the high quality and availability of the 5G Core network.

Communications service providers need faster and more efficient software delivery models to reduce time-to-market for new features. Given the complexity of telecommunications networks - where solutions are often comprised of multivendor products with real time applications - legacy delivery mechanisms will be insufficient to cope with the demands of 5G networks. Ericsson’s cloud-native CI/CD delivery model addresses this challenge.  

Ericsson and KDDI partnered to create a cross-organizational end-to-end 5G CI/CD pipeline – moving from native to virtualized and cloud-native network functions.  The pipeline seamlessly deploys software from Ericsson’s product development units into the KDDI’s environment without human intervention.

The CI/CD pipeline speeds up the software acceptance process through the advanced automation of software distribution, deployment, validation and feedback, while reducing human-error risks.

It shortens time to market of new software from months to weeks. Ericsson’s CI/CD pipeline enabled KDDI to deploy complicated sliced and distributed network functions more easily through simplified workflows.

Jan Karlsson, Head of Business Area Digital Services, Ericsson, says: “Our market-leading 5G core and unique CI/CD capabilities mean faster time-to-market, higher performance and cost efficiency. Agile delivery of services while maintaining high quality and availability is a must in 5G Core networks. Our CI/CD end-to-end software pipeline achieves this. We are happy to continue to work with KDDI to automate their network operation.”

Ericsson has launched two new artificial intelligence (AI)-powered offerings in its Network Services portfolio, enabling communications service providers to secure always-on networks and deliver optimal user experiences.

The two new portfolio additions — Network Intelligence and Omni Network Channel – are part of  Ericsson’s Network Services offering. They employ AI, automation and predictive analytics to address the complex reality faced by communications service providers: exponential data growth and the continuous introduction of new technologies such as 5G, digital transformation, and scattered information sources and insights.

Network Intelligence is an AI-driven preemptive support service that allows issues to be identified and resolved before they impact network performance. The service prevents critical outages and delivers the network stability needed for service continuity and optimal end-to-end performance.  Ericsson research shows that Network Intelligence reduces critical incidents by up to 35 percent by carrying out selective data collection, and automatically resolves issues within an average of five minutes from data collection.

Omni Network Channel is a unified digital workspace for interaction between the communications service provider and Ericsson, providing easy navigation, self-help and smooth collaboration. The workspace enhances network performance and consumer satisfaction through faster resolution of both the communications service provider and Ericsson operations’ issues. It also facilitates the adoption of new technologies such as 5G and supports communications service providers with the competence development of their personnel.

Roger O’ Hargan, Head of Service Area Networks, Ericsson, says: “Our core value is ‘Technology enhanced by people’ where people, framework and technology are our main assets. These new offerings are all about putting the service provider in the center by enabling self-help as well as smooth collaboration, co-creation, and easy access to data – all of which will help secure an always-on network experience.”

Justin van der Lande, Principal Analyst at Analysys Mason, says: “There is a demand among service providers for a more transparent interaction with their vendors when dealing with network issues. Ericsson’s intelligent workplace technology, boosted by the expertise of their people, addresses this well. This approach leverages the scale of Ericsson’s operations, its well-established frameworks and its wealth of industry knowledge to bring significant benefits to the service provider. Ericsson’s AI-powered Network Services are now readily accessible with shared data insights that put the customer experience front and center.”

Network Intelligence is built for product-near use as a natural extension of the Network Services portfolio. It is complementary to the Ericsson Operations Engine, Ericsson’s offering for managed operations, design and optimization launched in January 2019.

Data call connects Bern, Switzerland and Gold Coast, Australia using Ericsson Spectrum Sharing over live commercial 5G networks and commercial form factor 5G smartphones.

Ericsson to deploy 3GPP standards-based 5G New Radio (NR) and core network.