Ericsson-Synergy stripped but not dead

The Ericsson Synergy mobile commerce joint venture has been stripped of staff following a "general slowdown" in the telecommunications market, but it hasn't been wound up, as reported elsewhere, says Synergy marketing communications manager Desiree Keown

The Ericsson Synergy (ESL) mobile commerce joint venture has been stripped of staff following a “general slowdown” in the telecommunications market, but it has definitely not been wound up, as reported elsewhere in the media, says Synergy marketing communications manager Desiree Keown.

“The company continues as the owner of intellectual property, and as a channel through Ericsson to global markets. That’s too valuable to give away,” she says.

ESL still has a board, but the staff have been moved into the Synergy operation.

ESL head Brian Phillips has been out of cellphone contact and Synergy chief Dave Irving will be uncontactable until later today, says Keown.

Ericsson-Synergy was launched almost two years ago in a fanfare of knowledge-economy and “m-commerce” optimism, and promised a government grant of $1.6m, and arrangement which was delivered last year (see Government confirms Ericsson joint-venture funding). One of the conditions of the finance was that ESL achieved its expectation of employing 120 New Zealanders, mostly in technically skilled jobs.

In the event, the staff level peaked at around 35 and had sunk to 20 by this week, when it was decided to put the company to sleep.

Ericsson Synergy has already received $355,000, mainly from Industry New Zealand but including $55,000 from the Foundation for Research, Science and Technology.

There has been a slowdown in sales, and a lengthening of the sales cycle in telecoms, consequent on a general global downturn, says Keown.

“We decided to transfer the staff across to Synergy, rather than keep two [operational companies] going.”

Economic development minister Jim Anderton was also unavailable yesterday, but a spokesman passed on the essence of comments he had already made, that the demise of the venture had been due to factors in the international market beyond the government’s control, and that for a $335,000 investment, the country had reaped $7m in foreign exchange, valuable intellectual property by way of software and “global networks and contacts.”

The funding was planned from the start as a “smart grant”, says Anderton’s spokesman, with instalments dependent on the achievement of certain milestones, such as the 120 jobs. Those milestones have not eventuated so government, for the time being at least, has invested no more money.

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