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November 24, 2005

Ericsson buys systems integrator TUSC

Network equipment manufacturer Ericsson has grown its services business with the acquisition of systems integrator TUSC Computer Systems Pty Ltd for AUD 9.5m ($7m) in cash.

By CBR Staff Writer

Melbourne, Australia-based TUSC has 80 employees and provides IT and telecoms integration and management services to clients including Amcor, Telstra, and TRU Energy.

TUSC was acquired in August 2004 by stock market-listed IT services group Allied Technology Group for AUD 6.7m ($5m). However, loss-making Allied said it was selling the operation after just 15 months of ownership, as it believed the group’s current market capitalization undervalues the group’s underlying assets and business operations.

Erik Aldmark VP of strategy at Ericsson Global Services, said TUSC made annual revenue of AUD 15m ($11m).

The takeover represents Ericsson’s third acquisition in the services space in the last 14 months. In July, it bought the systems integration arm of wireless software vendor Teleca AB for an undisclosed sum, and in September 2004, it swooped for French network integrator Audiolog SA.

All these takeovers have been rolled into Ericsson’s Global Services operation, which provides implementation and management services around network and IT infrastructure, including billing, mediation, and charging systems for network operators. The services business has 18,000 employees worldwide and grew 10% to SEK 31.1bn ($3.9bn) in full-year 2004, accounting for 26% of total systems sales.

Aldmark said more consolidation would come in the telecoms services space. He cited a recent Standard & Poors report that claimed that between 65% to 70% of the telecoms services market is currently controlled by local and regional players.

However, Aldmark refused to comment on whether Ericsson was in the running to acquire Belgian network integrator Telindus NV, which is reportedly the subject of interest for five potential suitors.

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