STOCKHOLM, Sweden As it moves headlong into multimedia content delivery following its acquisition of Tandberg TV earlier this year, Ericsson AB executives said they are seeking to maintain Tandberg's existing cable business while leveraging an emerging IPTV platform.
Company executives, defending their backing of the Long-Term Evolution (LTE) wireless network standard, also questioned the viability of WiMax as a standard in the aftermath of the collapse of a partnership between Sprint Nextel and Clearwire.
Ericsson wants to "take [Tandberg] to the next step with IPTV while strengthening its existing customer base," Joergen Lantto, vice president of system management for Ericsson's new multimedia unit, said in an interview here.
Ericsson acquired Tandberg TV earlier this year for $1.38 billion. The Swedish wireless specialist outbid Arris Group Inc., but was widely seen as paying a premium to buy the cable set-top box vendor.
Lantto said Ericsson can make up for being a late entrant to the multimedia market by leveraging its R&D to scale up Tandberg's cable TV operations and transform it into a global competitor.
Ericsson's strategy is to bring its multimedia technologies to the cable industry through Tandberg, Lantto added. "We have that [platform] with Tandberg. We have what cable operators would like to have."
Ericsson has been demonstrating its IPTV platform, and plans to roll out equipment in the second quarter of 2008.
Lantto and Michael Martinsson, marketing director for Ericsson's broadband business unit, both argued that mobile broadband is a "volume-based business," and that LTE already has a built-in market of an estimated 350 million 3G subscribers. By comparison, the company cites forecasts by WiMax backers of 30 million subscribers by 2011.
Last week (Nov. 16), the GSM Association, as expected, backed LTE for 4G wireless services.
"Scale is the only thing that drives cost, and cost drives adoption," Lantto said.