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Ericsson AB - Company Report
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Company Reports are concise reports that provide a review of the company's activities, corporate strategy and recent developments.
Ericsson’s origin dates back to 1876, when it was established as a telegraph equipment repair shop by Lars Magnum Ericsson in Stockholm. With Mr Lars’ focus on improving technical quality of telephones, the company significantly increased the usage of telephony in Stockholm by the late 1800s. Later in August 1918, with the merger of AB LM Ericsson & Co and Allmänna Telefon AB, Ericsson became a registered limited liability company under the name Telefonaktiebolaget LM Ericsson. Today, Ericsson is a provider of telecommunications equipment and related services to mobile and fixed network operators globally. The company predominantly operates in Western Europe and also in Eastern Europe, the Middle East, and Africa; the Asia Pacific region, North America, and Latin America. Over 600 customers in 175 countries utilise the company's network equipment and it is one of a few companies worldwide that can offer end-to-end solutions for all major mobile communications standards. Through its Sony Ericsson Mobile Communications joint venture, the company offers a range of mobile devices, including those supporting multimedia applications and other personal communications services. In addition, Ericsson has products for special applications within enterprise, cables, mobile platforms, and power modules. In January 2006, Ericsson completed the acquisition of the key assets of UK-based Marconi Corporation, which has strengthened Ericsson’s activities in the transmission equipment and converged networks sectors. In January 2007, Ericsson completed the acquisition of Redback Networks, a vendor of edge IP routers, thereby expanding its opportunities in the IPTV market. This was followed in February with the acquisition of Entrisphere, thereby strengthening its position in the North American GPON market. In March 2007, Ericsson moved to acquire the entire assets of Mobeon AB, a provider of IP messaging components for wireless and fixed networks. Ericsson already was a partner of the company with a 21% holding. In April 2007, Ericsson acquired the outstanding shares of Norway-based Tandberg Television for US$1.4 billion, and said it intended to proceed with the acquisition of the remaining shares, in accordance with Norwegian law. Both these acquisitions were designed to strengthen Ericsson in the multimedia sector. Tandberg TV brings expertise and a customer base in video systems technology and applications, a market in which Ericsson hitherto lagged behind. In June 2007, Ericsson moved to acquire LHS, a provider of billing software. Valued at €310 million, the acquisition will enable Ericsson to combine its prepaid solutions with LHS’ post-paid offering to provide a fully integrated convergent charging and billing solution for fixed and mobile operators. It will also expand Ericsson’s customer base and allow cross-sell opportunities. Since January 2007, Ericsson primarily operates in three reportable segments to reflect its new structure announced in January: Networks, Professional Services and Multimedia. Before this date, Ericsson operated in two reportable segments, namely, Systems (including Mobile Networks, Fixed Networks, and Professional Services) and Other Operations. Ericsson's Class A and Class B shares are traded on the Stockholm Stock Exchange and the Class B shares are also traded on the London Stock Exchange. In the US, the Class B shares are traded on NASDAQ in the form of American depository shares (ADSs). As of December 2006, Ericsson had 814,841 shareholders. Investor AB was the largest shareholder with 39.22% of the company's Class A shares and 2% of the company's class B shares, representing 5.02% of Ericsson's capital. The second-largest shareholder was AB Industrivarden with 28.42% of the company's Class A shares and 0.03% of the company's Class B shares, representing 2.34% of the capital.
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