Ericsson has announced strategic partnership with Cisco, which will combine the capabilities of both companies: routing, data centre networking, cloud, mobility, management and control, and global services capabilities.
Ericsson will join hands with Cisco in offering offer end-to-end leadership across network architectures for 5G, cloud and IP, and the Internet of Things.
The announcement is supported by multiple agreements including a global service partner agreement, as well as a broad reseller agreement. The parties have also agreed to discuss FRAND policies and enter a licensing agreement for their respective patent portfolios.
Hans Vestberg, President and CEO, Ericsson, said, “This partnership fortifies the IP strategy we have developed over the past several years and it is a key step forward in our company transformation.”
As a result of the partnership, Ericsson will extend its addressable market and is expected to generate $1 billion or more of additional sales by 2018 (full year). The extended addressable market is primarily in professional services, software and resell of Cisco products. The additional sales are expected to be accretive to operating income already in 2016. The partnership is expected to generate full-year effect from synergies, primarily in expenses of SEK 1 billion in 2018.
Both companies have confirmed that they will continue to explore further joint business opportunities as the partnership progresses.