Ericsson acquires Envivio to bolster its exposure in telecommunication market

Ericsson acquires Envivio to bolster its exposure in telecommunication market

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Ericsson (ADR) (NASDAQ:ERIC) settled a merger deal with video encoding firm Envivio in an attempt to bolster its exposure in telecommunication market. The acquisition would also assist the firm to use Envivio’s skillful expertise in improving AT&T Inc’s (NYSE:T)TV platform, as AT&T has given task to Ericsson to enhance and integrate its TV platform.

The procurement also calls for the company’s support solutions segment, which includes OSS (operations support system)& BSS (business support system), television and media solutions as well as mobile commerce.

Envivio doesn’t mark as the first acquisition of Ericsson to bolster its position in OSS & BSS, TV and media and mobile commerce businesses. For improving its support solutions business, the firm acquired Telcordiafor $1.15 billion in 2012 which proved good for the firm as the acquisition poured in SEK 2.1 billion in sales for the year. Earlier this year, it bought Sunrise Technology to further strengthen in support solutions market.

In order to prop up in the media and television segments the firm acquired Microsoft’s Mediaroom,which had an IPTV platform serving close to 13 million customers worldwide with a market share of 25%. This acquisition put Ericsson on top of the IPTV market, which is expected to touch $80 billion by 2020, with most growth coming from the APAC region.  Last year the firm acquired Azuki Systems, which in addition to boosting its “TV Anywhere” services, offered Ericsson important technologies in adaptive bitrate and content protection.

The support solutions business doesn’t attribute much to the firm’s revenue figures over the past few years. But the firm’s increasing focus on improving its OSS & BSS and mobile commerce portfolios, this segment can clinches the top position in market.

Envivio will guide firm’s ambitions in expanding its reach over market. Currently more than 400 TV service providers and content owners useEnvivio services, which will be a bonus point for the firm. The acquisition would also draw a large tank of revenue reserves to firm, thereby also increasing its earnings margins.

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I am a lecturer at the University of Economics in Bratislava, department of Banking and International Finance. I have a Ph.D. academic degree, my dissertation was focused on major markets. Commodities and stock markets are also the main focus of my research and publication activities. I have approximately 10 years of investing experiences. My investments mostly focus on small- to mid-cap companies of energy sector, financial and technology.

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