Ericsson closes the acquisition of Nortel’s Multiservice Switch business
Ericsson has completed the asset purchase agreement to acquire Nortel’s Multiservice Switch business. This acquisition gives Ericsson access to a strong product portfolio and installed base in the data segment while ensuring the supply of the platform for the recently acquired CDMA and GSM units.
“We are gaining a solid business with a significant installed base and technology that complements our existing Ericsson portfolio. In key locations around the globe, we grow our data capability with experienced and talented people” said Rima Qureshi, senior vice president and head of business unit CDMA Mobile Systems.
An important part of the CDMA ecosystem, the Multiservice Switch business offers the sale and support of data networks and switching platforms for core networks within the wireless and carrier voice divisions, previously acquired from Nortel. The Multiservice switches, to be called PPX henceforth, serve a valuable need for a multiplicity of services that the backbone network provides today for our customers.
Today’s closing follows the announcement on September 25, 2010, that Ericsson was entering into an asset purchase agreement for substantially all of the assets of Nortel’s Multiservice Switch Business.
The former Nortel Multiservice Switch staff will be integrated into the Ericsson group in business unit CDMA Mobile Systems over the coming months and will work under the Ericsson brand effective today. Former Nortel customers gain a stable partner committed to the ongoing evolution of their networks and the assurance of a seamless business transition.
SEB Enskilda acted as Ericsson’s sole financial advisor in the transaction.
US orders Huawei to clear acquisition of domestic start-up
US authorities have taken the bizarre step by ordering Huawei to clear the acquisition of a domestic start-up, despite the deal closing in May.
Security officials at the Pentagon consider that the purchase of 3Leaf should have been cleared by the Committee on Foreign Investment in the US (Cfius), which taxes the national security implications of acquisitions by overseas firms.
According to reports, Huawei paid $2 million for 3Leaf’s staff and IP, but didn’t seek approval because the deal didn’t cover all of the start-up’s assets.
3Leaf is a Bay area startup whose technology combines servers together to allow them to scale.
As per reports, the committee could order Huawei to sell 3Leaf or place restrictions on its use of the US firm’s technology if it finds the deal compromises national security.
Security fears over Huawei’s links to the PLA have hampered the Chinese vendor’s efforts to crack the US market. It has repeatedly denied any military links beyond the fact that CEO and co-founder Ren Zhengfei is a former PLA officer.
The vendor has hired lobbyists in Washington to help win government backing for its equipment, but has yet to win a major contract with any tier-one carriers in the country. Rival ZTE has been similarly hindered by security concerns in the US.
The firms were excluded from Sprint Nextel’s $7 billion 4G equipment tender earlier this month, despite submitting the lowest bids.
Microsoft in talks to Acquire Adobe to unite against Apple
If rumors are to be believed, Microsoft CEO Steve Ballmer and Adobe CEO Shantanu Narayen were in a meeting to discuss over Apple and its control of the mobile phone market and how the two companies could collaborate in the battle against Apple. A possible acquisition of Adobe by Microsoft was among the options.
Formally, Adobe and Microsoft have been opponents with challenging software and the companies became really aggressive in 2007 when Microsoft began promoting Silverlight, its software plug-in for the Web that directly competes with Adobe Flash.
According to sources, the two companies had talked about the obstruction that Apple’s chief executive, Steven P. Jobs, had placed on Adobe’s Flash software for its hand-held devices and whether a partnership by Adobe and Microsoft could fend off Apple, which continues to grow at juggernaut speeds. Microsoft had courted Adobe several years ago. But the deal never moved past informal talks as Microsoft feared that the Justice Department would most likely block the acquisition on antitrust grounds.
The source noted that Microsoft was the dominant force in technology, Google and Apple were not the giants they are today.
Telefónica captures Vivo in US$6.11 billion
Telef³nica has acquired 50% stake in Brasilcel, owned by Portugal Telecom. As part of possession, Telef³nica has gained control of Vivo, which is almost 60% owned by Brasilcel.
As per the agreement with Portugal Telecom, Telef³nica paid the first installment of US$6.11 billion for the 50% stake acquisition. The remaining amount, up to US$10.18 billion, will be made under a schedule of payments, including US$1.35 billion on December 30 2010 and US$2.71 billion on October 31 2011.
Portugal Telecom can ask for the last payment to be paid on July 29 2011. Telef³nica will reveal a tender offer over the voting shares of Vivo, for a price equal to 80% of the price paid by Telef³nica to Portugal Telecom for each voting share of Vivo owned by Brasilcel.
France Telecom dismisses TeliaSonera acquisition rumors
France Telecom SA once again made it clear that it has no plans to acquire Swedish telecoms operator TeliaSonera AB.
According to the spokesperson for the company, there are rumors on the market that France Telecom is interested in a merger with TeliaSonera. They are totally unfounded. France Telecom showed interest in acquiring the Swedish operator in 2008, but no agreement was reached. The French company no longer has such plans.
Vodafone challenges IT order again in the Indian High court
www.WirelessFederation.com/news: India’s second largest operator by subscriber, Vodafone has filed a petition in the Bombay High Court to challenge the Indian Income-Tax department’s claim that it has jurisdiction to levy tax on Vodafone’s $11-billion acquisition of Indian company Hutchison Essar three years ago.
The disputed tax payable in India amounts to over Rs 12,000 crore. The matter is expected to be heard by a division bench of the high court, comprising Justice D Y Chandrachud and J P Devadhar on Tuesday. The tax war was ignited after a show cause notice was sent to Vodafone’s Netherlands office, asking it to explain why tax was not deducted, as it paid $11 billion to Hutchison International, Hong Kong to acquire Indian company Hutch- Essar.
The Indian I-T department has claimed that India has the right to claim tax on the profit generated in India, even if the sale of shares of the Indian company took place outside India. The High Court was moved by Vodafone last year to challenge the jurisdiction of the I-T department to levy tax on the transaction that took place outside India between two overseas parties. As per the company, all transactions related to the sale of shares took place outside India and therefore Indian tax regime has no right to levy tax on the transaction.
Failing to get any support from the High Court, Vodafone moved the Supreme Court which had asked the company to return to the I-T department to sort out the issue of tax jurisdiction. Vodafone got liberty from SC to move the High Court directly, bypassing the lower appellate forum, if it disagrees with the I-T order.
An order was again issued by the I-T department on May 31 reiterating its original stand. This is the second time Vodafone is moving the high court on the same issue.
Bharti’s ‘affordable tariffs’ expected to ignite tariff war in Africa
www.WirelessFederation.com/news: Introduction of the concept of ‘affordable tariffs’ has been announced by Bharti Airtel a day after closing the deal for acquisition of Zain Telecom’s Africa assets for USD 10.7 billion. The move by India largest telco is expected to ignite a tariff war in the continent. Bharti Airtel is already a part of the tariff war in India where cheaper call rates and multiple tariff plans have pushed up the country’s mobile subscriber base, where a minimum of 13-15 million users are added every month.
According to Bharti Airtel CEO and In-Charge for International Operations Manoj Kohli, the company will not go for tariff cut but for a long-term affordability strategy which is good for the customer and for the company and added that the monthly usage is 60-70 minutes per customer in Africa against 450-500 minutes in India, so, there is a pent-up demand with high tariffs in Africa and the objective is not to introduce low tariffs in Africa but affordability. Bharti will see what the level of affordability normal customer wants is.
Introduction of more tariff plans suiting the customer profile and pay capability in each of the 15 African countries has been announced. Investment of USD 800-1,000 million this fiscal in Africa for network roll out and services has also been announced however, this figure is yet to be finalized. Integrating systems, processing, networks, people, IT and getting these 15 countries completely stable are some of the priorities of the company.
Nokia, Ericsson, Alacatel, IBM and Wipro which are the partners of Bharti have been invited while the telco is also in talk with Huawei and HP for partnership. Any big bang acquisition in the near future has been denied by Manoj Kohli who is in charge of the company’s acquisition strategy and will shift to Nairobi this week to head Bharti Airtel’s Africa business.
MTS revenue rises 23.2% in Q1 (Russia)
www.WirelessFederation.com/news: 23.2% year-on-year rise in the revenue has been announced by Russian telecoms group MTS for the three months ended March 31, 2010 with USD 2.614 billion. The positive currency effects can be attributed as the reason behind the rise in the revenues.
Revenues from the mobile segment rose 17.9% to USD2.07 billion and from the fixed line segment, it increased 22.1% to USD408 million. Increased usage, greater adoption of data products, higher handset sales, subscriber additions and its move into the fixed market with the acquisition of Comstar UTS are some of the other factors contributing to the growth.
20.4% rise in the OIBDA of USD1.154 billion has been recorded while the OIBDA margin fell one percentage point to 44.1%.
Net profit of USD381.3 million has also been reported by the company when compared to a loss of USD53.5 million in the year-earlier period, helped by refinancing of much of its borrowing.
MegaFon completes USD745 million Synterra purchase (Russia)
www.WirelessFederation.com/news: USD745 million acquisition of long-distance operator Synterra has been completed by Russian cellco MegaFon following several months of negotiations with owner PromSvyazCapital.
The deal also follows the rumors of a counter bid from Rostelecom.
Both Mobile TeleSystems (MTS) and Vimpelcom, MegaFon’s two larger cellular rivals own extensive long-distance infrastructure which they are in the process of expanding.
Bakrie & Telkom in talk to merge CDMA business (Indonesia)
www.WirelessFederation.com/news: Bakrie Telecom and Telekomunikasi Indonesia (Telkom), Indonesian state-owned telecommunications company, is in talks with each other over a potential merger of CDMA business units.
The talk has been confirmed by Telkom president Rinaldi Firmansyah, according to whom the companies are in talks about merging Telkom’s Flexi unit and Bakrie’s Esia unit, which provide CDMA services and the consolidation of the CDMA businesses could be a merger or an acquisition. Telkom is also in talks with other local operators about Flexi and is open to a variety of options.
However, Rahmat Djunaidi who is Bakrie Telecom director of corporate services has denied any kind of talk between the two companies over the consolidation of the CDMA businesses.
