Local Ericsson R&D unit sold to Australia

New Zealand may have lost a promising sapling for one of the $100 million-a-year forest-toppers said by the ICT taskforce to be needed by 2012.

New Zealand may have lost a promising sapling for one of the $100 million-a-year forest-toppers said by the ICT taskforce to be needed by 2012.

Communications company Ericsson plans to sell its Napier-based Data Services division to Melbourne's Tennyson Networks, a business communications products company listed on the Australian Stock Exchange.

In 1997 the division won a New Zealand Electronic Product Excellence Award for innovation and export potential for the Home Internet Solution, a device for providing internet access without tying up the domestic phone line. It has not sold here but did more than $100 million of overseas business over the past three years. Its flagship customer is the Polish government-owned telecommunications company.

Tennyson chairman Harvey Parker says of the planned acquisition: “It is expected that in a single stroke this will turn Tennyson into a significant business operation with annual revenues of approximately $30 million, strong cashflow and profitability, as well as a vastly more diversified product range and revenue stream in aligned businesses.”

The Data Services division has developed technology which includes Ericsson-branded synchronous high-speed digital subscriber line (SHDSL) and ADSL products, which are installed inside local network exchanges by telecommunications companies so they can provide broadband internet services.

As well as a functioning and profitable company, Tennyson gets a research and development team and some of the organisation’s intellectual property, such as patents in integrated digital subscriber line (IDSL) technology, combining some of the characteristics of DSL and ISDN.

Ericsson is selling the Napier division as part of an international strategy to narrow down to its core businesses, says Ericsson NZ spokeswoman Alison Crosbie.

Heads of agreement have been reached on the deal and Tennyson has until late next month to finalise it.

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