Ericsson Claims Dominance in North America
"Let's just say that it's a significant addition to our overall business and gives a dominant position in North America," Angel Ruiz, president and CEO of Ericsson North America, tells Unstrung.
Nortel's North American CDMA operations generated around $2 billion in sales in 2008. Ericsson's American operations made about $2.7 billion in sales in the same period. The acquisition will add around 2,600 new employees to Ericsson's roster, bring the total number of employees in North America to 14,000.
Ruiz says that about 450 Nortel employees are working on Long Term Evolution (LTE) research and development -- 400 of them in Ottawa, and 50 in Texas. "Nortel had done quite a bit of LTE work; they were quite a way along with it."
Ericsson has already inked two major LTE deals in the U.S. The company is one of the infrastructure providers for Verizon Wireless 's deployment, and Ericsson is the primary infrastructure vendor for MetroPCS Inc. (NYSE: PCS)'s upcoming network. (See Ericsson Lands LTE Gig at MetroPCS and Verizon Makes LTE Connection in Boston & Seattle .)
On the CDMA side, there are around 1,000 Nortel employees that work on the network management side of the house, while another 1,100 will have more "customer-facing roles," according to Ruiz.
He says that Nortel's CDMA resources will combine with Ericsson's to form "a better anchor" for current customer requirements. The deal also brings to Ericsson the Nortel CDMA contracts with Leap Wireless International Inc. (Nasdaq: LEAP) and U.S. Cellular Corp. (NYSE: USM) (See Nortel Wireless Winner: It's Ericsson!) One thing Ruiz doesn't expect to happen soon is any major cuts in the new employee base. "I thank if we do that, it will not be in the short-term," he says.
— Dan Jones, Site Editor, Unstrung