Ericsson has restructured its business into three “more customer-oriented” units: Networks, Global Services and Multimedia with the main aim being to strengthen its ability to exploit the growing market for the delivery of multimedia services, especially to mobile devices. The new organization will be in effect as of January 1, 2007.
President and CEO, Carl-Henric Svanberg, said the emerging multimedia market was “an area with obvious business opportunities and potentially a powerful driver for increasing network capacity and investments by operators.” Ericsson intends to recruit an additional 500 engineers “to accelerate research, especially in the area of next generation IP-networks and multimedia technology.” Svanberg claimed: “In the multimedia business we have the content and application management, the technical excellence and execution resources as well as strong relationships with content providers and operators.
The company says that, in 2005, the multimedia market – networked TV, music, gaming, video, radio and print over fixed and mobile networks – was valued at just under EUR20 billion and is expected to exceed EUR100 billion by 2011.
“Today, there are some 2.5 billion mobile subscribers of which a growing number is being upgraded to mobile broadband,” according to Ericsson. “Traffic in mobile networks is expected to quadruple in the next five years, primarily driven by continued subscriber growth and fixed to mobile substitution for voice but especially by increased data traffic from mobilized enterprise applications, music down loads, mobile TV and other new multimedia applications.”
Business Unit Networks will include mobile and fixed access, core and transmission networks, as well as next generation IP-networks. The former business units Systems, Access and Broadband networks will be integrated into the new unit as well as Ericsson Power Modules and Ericsson Cables. The unit will be headed by Kurt Jofs, executive vice president and currently head of the Access business unit. The unit will have approximately 21,500 employees.
Business Unit Global Services is unchanged. It includes Ericsson Professional Services and provides services rolling out networks for customers. The unit was created in 1999 and has approximately 23,000 employees worldwide. It manages networks with more than 65 million subscribers and provides support to networks with 725 million subscribers.
Business Unit Multimedia will consist of the Multimedia unit within the former Systems business unit and will combine the former, smaller, business units Enterprise and Ericsson Mobile Platforms as well as Ericsson Consumer and Enterprise Lab. It will have approximately 4,000 employees. A head of this new business unit will be announced shortly.