Swedish multinational networking and telecommunications company, Ericsson in a deft move will be acquiring Vonage, a U.S. cloud communications company in a $6.2 billion deal that would propel the use of wireless services for business customers.
The purchase of Vonage by Ericsson would give the leading U.S 5G network equipment provider accesses to software developers who can create new applications to leverage of features built into new fifth generation high speed wireless networks that the Stockholm-based company is building.
The President and Chief Executive Officer (CEO) of Ericsson, Borje Ekholm affirmed that the acquisition of Vonage is the “next step” on delivering its strategic priority of building leading mobile networks.
“Vonage gives us a platform to help our customers monetize the investments in the network, benefitting developers and businesses,” Ekholm said in a press statement.
With the deal expected to close in the first half of next year, Ericsson agreed to purchase Vonage for $21 a share in the all-cash deal, 28 percent higher than Vonage’s closing share price on Friday.
Founded in 2001, Vonage, a pioneer of internet-based telephone service has now evolved into a platform for application programming interfaces that allow different software applications to communicate with each other.
The New Jersey based company had through a series of acquisitions expanded its business to business marketplace, now offering includes unified communications, contact centre applications and communications APIs.
Ericsson on the other hand founded 145 years ago, is the inventor of Bluetooth technology has been a major contributor to the development of the telecommunications industry and is one of the leaders in the Fifth Generation Technology (5G).
With over 57,000 granted patents, Ericsson currently has in its workforce over 100,000 people and operates in more than 180 countries, a figure that placed it a very vital employer of labour.
Ericsson, which had earlier acquired Polish and Ukrainian operations of software development company Ericpol, had approximately 2,300 employees of the company joining Ericsson will hope to leverage on the Vonage deal to further spread its tentacles in the cloud communications market.
Techbooky had earlier this month reported that Ericsson had partnered with leading Qatar telecommunications company, Ooredo to bring a unique 5G experience for football across the country when the FIFA World Cup holds in 2022.
Ericsson together with Ooredoo will provide network optimization, event management and 5G connectivity in eight stadiums across six cities, while also providing those services in dedicated fan zones, airports, and places of attraction.