Following a Bloomberg column mentioning Ericsson (ERIC +0.2%) is discussing managed services deals with AT&T and Verizon, the company states it's not in "specific discussions" with either carrier about managing their networks.
Ericsson adds it frequently discusses its various services offerings with clients in general. Verizon, meanwhile, says it doesn't "outsource our network management."
Ericsson (ERIC +0.3%) says it's "in discussions" with AT&T and Verizon about deals to manage their mobile infrastructures. Given Ericsson's 7-year managed services deal with Sprint (a smaller carrier) is worth $5B, the size of any contract with AT&T or Verizon could be massive.
Ericsson, hungry to cut its hardware dependence by growing higher-margin software and services sales, forecast last November the telecom services market would show a 5%-7% CAGR through 2016. That's better than the 3%-5% CAGR expected for carrier networking equipment.
Managed services chief Claude Geha argues a broader trend is afoot among carriers to outsource network management, and points to a new 7-year deal with Greek carrier OTE as proof. Geha suggests the deal creates opportunities for Ericsson do more work for Deutsche Telekom, which owns 40% of OTE.
Previous: E-mail suggests Ericsson set to win contract from Neustar
Update: Ericsson says it's not in "specific discussions" with AT&T/Verizon about managed services deals.
An April 28 e-mail (just made public) from an advisory group suggests Ericsson (ERIC) is close to winning a major phone number contract currently held by Neustar (NSR).
The 5-year contract covers the transfer and management of 500M+ phone numbers, and will kick in after the current contract expires on June 30, 2015. The FCC has the final say on who wins it.
Bloomberg observes Neustar has generated $3B+ in revenue from number-switching, which it has exclusively handled since 1997.
Ericsson has been trying hard to grow its telecom software/service exposure, and thus cut its dependence on a slower-growing, relatively low-margin mobile infrastructure market.
Ericsson bought top telecom billing and provisioning (OSS/BSS) software vendor Telcordia in 2011, and has made complementary acquisitions since. This week, it rolled out an analytics platform for its OSS/BSS solutions.
Ciena (CIEN) is partnering with mobile infrastructure giant Ericsson (ERIC) to jointly develop integrated Ethernet/optical networking solutions (i.e. packet-optical), as well as carrier software-defined networking (SDN) offerings.
As part of the deal, Ericsson, which counts most of the world's top mobile carriers among its clients, will resell Ciena's 6500 packet-optical systems and 5400 reconfigurable optical switches. The companies are looking to address carrier needs for more powerful/intelligent back-end infrastructures as mobile data traffic continues soaring.
Ciena's packet-optical sales rose 16% Y/Y in the October quarter, and accounted for 60% of revenue. Its SDN business is still in its early stages - though many see tremendous long-term potential for the technology, large-scale carrier SDN adoption isn't expected before 2016.
Ericsson's (ERIC) swung to a Q4 net profit of 6.41B Swedish kronor ($990M) from a loss of 6.46B kronor a year earlier, when results were hit by a charge related to the ending of the ST-Ericsson joint venture.
This year's Q4 profit missed consensus of 7.22B kronor.
Revenue was flat at 67B kronor vs 66.9B kronor and below forecasts of of 69.1B kronor, hurt by a slump of 19% in North America and lower activity in Japan as large coverage projects peaked in both regions.
A patent-related payout from Samsung boosted profit by 3.3B kronor and sales by 4.2B kronor.
Gross margin edged up to 37.1% from 31.1%.
Ericsson intends to pay a dividend of 3 kronor a share.
Bloomberg reports Ericsson (ERIC -0.9%) CEO Hans Vestburg has told his company's board he has no plans to leave.
Vestburg is one of several names linked in recent months to Microsoft's (MSFT +1.1%) very well-publicized CEO search. Kara Swisher stated last week some sources believe Microsoft's CEO search is finished, and that an announcement will come soon.
Interestingly, Ericsson's shares ticked slightly lower in response to Bloomberg's report.