Ericsson-Cisco Partnership Gets Vodafone Hutchison Australia Contract

By Matthias Verbergt

STOCKHOLM--Ericsson AB (ERIC) and Cisco Systems Inc. (CSCO)on Monday said they will overhaul the telecommunications network of Vodafone Hutchison Australia, which they described as is their largest deal since the two networking giants announced a partnership.

The five-year deal, whose valuation wasn't disclosed, is a sign that Ericsson and Cisco's alliance is starting to bear fruit more than a year after its creation, analysts say.

Ericsson and Cisco will upgrade the Australian service provider's infrastructure by harmonizing hardware and software components and integrating mobile and fixed networking equipment to prepare it for next-generation applications such as virtual reality, autonomous driving and ultra-high-definition video.

Ericsson, a specialist in mobile equipment, in November 2015 said it would partner with Cisco, which dominates the market for fixed internet gear such as routers and switches, to counter mounting competition from Nordic rival Nokia Corp. and China's Huawei Technologies Co., which both offer a broader range of fixed-network equipment in-house.

Ericsson said both companies have jointly started over 250 active customer engagements and more than 60 deals have been closed. Earlier this month, Ericsson and Cisco extended their partnership to include Wi-Fi solutions.

With the Cisco partnership gaining speed, Bengt Nordström, head of Swedish telecom consultancy Northstream, said Ericsson and Cisco seem to be on course to reach their target of 1 billion in additional sales for both companies by 2018.

The telecom-equipment industry suffers from slowing demand as spending by mobile-service providers on latest-generation, or 4G, networks largely has dried up, with most mobile-broadband projects having been completed in 2015.

Monday also marks the first day of Borje Ekholm as Ericsson's chief executive. Mr. Ekholm's appointment was announced in October last year, three months after the company ousted Hans Vestberg.

Ericsson said Jan Frykhammar, the current acting CEO, will be an adviser to Mr. Ekholm.

Write to Matthias Verbergt at [e-mail]

(END) Dow Jones Newswires

January 16, 2017 04:14 ET (09:14 GMT)

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