STOCKHOLM (Reuters) - Mobile equipment maker Ericsson and U.S. networking company Cisco Systems Inc said on Monday they had agreed a business and technology partnership that should generate additional revenues of $1 billion for each company by 2018.
Ericsson, whose like-for-like sales are down 7 percent so far this year and were roughly flat over the previous three years, said the partnership means new areas of revenue as it will boost its addressable market, mainly in professional services, software and the resale of Cisco products.
“We are the wireless No. 1 in the world,” Ericsson Chief Executive Hans Vestberg told Reuters.
“Cisco is by far the No. 1 in the world when it comes to IP routers. Together we can create innovative solutions.”
The companies said in a statement they would together offer routing, data center, networking, cloud, mobility, management and control, and global services capabilities.
“The strategic partnership will be a key driver of growth and value for the next decade, with each company benefiting from incremental revenue in calendar year 2016 and expected to ramp (up) to $1 billion or more for each by 2018,” they said.
Ericsson expects full-year cost synergies of 1 billion Swedish crowns ($115 million) in 2018 due to the partnership and said it would continue to explore further joint business opportunities with Cisco.
Ericsson shares were up 2.8 percent by 0936 GMT, the biggest gainer in the STOXX Europe 600 technology index, which was up 0.4 percent.
Reporting by Olof Swahnberg; Editing by Niklas Pollard and Susan Fenton