25 October 2005
The majority of telecoms firm Marconi has finally been bought by Ericsson – allaying fears of British home telephone users that a rival bidder might not be able to carry out adequate network maintenance work.
There had been concern that Chinese firm Huawei Technologies, inexperienced in the European market, would win out in the battle for Marconi and be faced with the upkeep of BT's networks, among others, that the British company has provided.
Swedish giant Ericsson, however, has agreed a £1.2 billion deal to acquire the firm's telecoms equipment business – about 25 per cent of Marconi's operation - and said that the move will primarily help assist worldwide fixed and mobile broadband provision.
Carl-Henric Svanberg, Ericsson's president and CEO, said: "The acquisition of the Marconi businesses has a compelling strategic logic and is a robust financial case. As fixed and mobile services converge, our customers will substantially benefit from this powerful combination."
Marconi's services business – to be renamed Telent – will remain. Around 6,670 of the firm's staff will join Ericsson, though an estimated 1,000 jobs may also be culled.
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