Ericsson: Networks remain key to growth
By Li Weitao (China Daily)Updated: 2006-11-28 15:37
Q: You have said Ericsson will continue exploring opportunities for mergers and acquisitions (M&As) if necessary. Can you give a hint about the direction of future M&A activities? Ericsson recently restructured its business and formed a new division, the Multimedia Unit. Will future M&As occur in that area? And given the continuing consolidation of the global telecoms market, will Ericsson consider buying some companies in China?
A: First of all, it's always a better alternative if you have the capability to realize organic growth and conduct R&D yourself, because when you acquire a company there is always the integration issue.
On the other hand, if you acquire a company, it gives you a chance to leapfrog a bit. When you have some bolt-on acquisitions, you go faster. That could be an advantage, which is bigger than the regulation challenges.
With that background, mobile infrastructure is an area where we have all the necessary competences and products. So that is not likely (for us) to conduct acquisitions (in that area). For example, in terms of IP technology, we are seeing more convergence of next-generation networks. Those are technologies of competences that we are in the process of developing, but we are also studying if we can accelerate that work by acquiring companies.
Multimedia is also an area where we always believe we can accelerate (business growth) if we can find the right companies and acquire them. Finally, in (professional) services, it could also be an opportunity for us to get quicker access to more skills, such as in system integration.
From a general point of view, acquisitions are not more likely to occur in
China. But neither are they less likely to happen elsewhere. There are always
interesting opportunities in China.
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